[Federal Register Volume 84, Number 86 (Friday, May 3, 2019)]
[Proposed Rules]
[Pages 19158-19677]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2019-08330]



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Vol. 84

Friday,

No. 86

May 3, 2019

Part II

Book 2 of 2 Books

Pages 19157-19682





 Department of Health and Human Services





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Centers for Medicare & Medicaid Services



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42 CFR Parts 412, 413, and 495



 Medicare Program; Hospital Inpatient Prospective Payment Systems for 
Acute Care Hospitals and the Long-Term Care Hospital Prospective 
Payment System and Proposed Policy Changes and Fiscal Year 2020 Rates; 
Proposed Quality Reporting Requirements for Specific Providers; 
Medicare and Medicaid Promoting Interoperability Programs Proposed 
Requirements for Eligible Hospitals and Critical Access Hospitals; 
Proposed Rule

Federal Register / Vol. 84 , No. 86 / Friday, May 3, 2019 / Proposed 
Rules

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DEPARTMENT OF HEALTH AND HUMAN SERVICES

Centers for Medicare & Medicaid Services

42 CFR Parts 412, 413, and 495

[CMS-1716-P]
RIN 0938-AT73


Medicare Program; Hospital Inpatient Prospective Payment Systems 
for Acute Care Hospitals and the Long-Term Care Hospital Prospective 
Payment System and Proposed Policy Changes and Fiscal Year 2020 Rates; 
Proposed Quality Reporting Requirements for Specific Providers; 
Medicare and Medicaid Promoting Interoperability Programs Proposed 
Requirements for Eligible Hospitals and Critical Access Hospitals

AGENCY: Centers for Medicare & Medicaid Services (CMS), HHS.

ACTION: Proposed rule.

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SUMMARY: We are proposing to revise the Medicare hospital inpatient 
prospective payment systems (IPPS) for operating and capital-related 
costs of acute care hospitals to implement changes arising from our 
continuing experience with these systems for FY 2020 and to implement 
certain recent legislation. We also are proposing to make changes 
relating to Medicare graduate medical education (GME) for teaching 
hospitals and payments to critical access hospital (CAHs). In addition, 
we are proposing to provide the market basket update that would apply 
to the rate-of-increase limits for certain hospitals excluded from the 
IPPS that are paid on a reasonable cost basis, subject to these limits 
for FY 2020. We are proposing to update the payment policies and the 
annual payment rates for the Medicare prospective payment system (PPS) 
for inpatient hospital services provided by long-term care hospitals 
(LTCHs) for FY 2020. In this proposed rule, we are including proposals 
to address wage index disparities between high and low wage index 
hospitals; to provide for an alternative IPPS new technology add-on 
payment pathway for certain transformative new devices; and to revise 
the calculation of the IPPS new technology add-on payment. In addition, 
we are requesting public comments on the substantial clinical 
improvement criterion used for evaluating applications for both the 
IPPS new technology add-on payment and the OPPS transitional pass-
through payment for devices, and we discuss potential revisions that we 
are considering adopting as final policies related to the substantial 
clinical improvement criterion for applications received beginning in 
FY 2020 for IPPS (that is, for FY 2021 and later new technology add-on 
payments) and beginning in CY 2020 for the OPPS.
    We are proposing to establish new requirements or revise existing 
requirements for quality reporting by specific Medicare providers 
(acute care hospitals, PPS-exempt cancer hospitals, and LTCHs). We also 
are proposing to establish new requirements and revise existing 
requirements for eligible hospitals and critical access hospitals 
(CAHs) participating in the Medicare and Medicaid Promoting 
Interoperability Programs. We are proposing to update policies for the 
Hospital Value-Based Purchasing (VBP) Program, the Hospital 
Readmissions Reduction Program, and the Hospital-Acquired Condition 
(HAC) Reduction Program.

DATES: To be assured consideration, comments must be received at one of 
the addresses provided in the ADDRESSES section, no later than 5 p.m. 
EDT on June 24, 2019.

ADDRESSES: In commenting, please refer to file code CMS-1716-P. Because 
of staff and resource limitations, we cannot accept comments by 
facsimile (FAX) transmission.
    Comments, including mass comment submissions, must be submitted in 
one of the following three ways (please choose only one of the ways 
listed):
    1. Electronically. You may (and we encourage you to) submit 
electronic comments on this regulation to http://www.regulations.gov. 
Follow the instructions under the ``submit a comment'' tab.
    2. By regular mail. You may mail written comments to the following 
address ONLY: Centers for Medicare & Medicaid Services, Department of 
Health and Human Services, Attention: CMS-1716-P, P.O. Box 8013, 
Baltimore, MD 21244-1850.
    Please allow sufficient time for mailed comments to be received 
before the close of the comment period.
    3. By express or overnight mail. You may send written comments via 
express or overnight mail to the following address ONLY: Centers for 
Medicare & Medicaid Services, Department of Health and Human Services, 
Attention: CMS-1716-P, Mail Stop C4-26-05, 7500 Security Boulevard, 
Baltimore, MD 21244-1850.
    For information on viewing public comments, we refer readers to the 
beginning of the SUPPLEMENTARY INFORMATION section.

FOR FURTHER INFORMATION CONTACT: Donald Thompson, (410) 786-4487, and 
Michele Hudson, (410) 786-4487, Operating Prospective Payment, MS-DRGs, 
Wage Index, New Medical Service and Technology Add-On Payments, 
Hospital Geographic Reclassifications, Graduate Medical Education, 
Capital Prospective Payment, Excluded Hospitals, Medicare 
Disproportionate Share Hospital (DSH) Payment Adjustment, Medicare-
Dependent Small Rural Hospital (MDH) Program, Low-Volume Hospital 
Payment Adjustment, and Critical Access Hospital (CAH) Issues.
    Michele Hudson, (410) 786-4487, Mark Luxton, (410) 786-4530, and 
Emily Lipkin, (410) 786-3633, Long-Term Care Hospital Prospective 
Payment System and MS-LTC-DRG Relative Weights Issues.
    Siddhartha Mazumdar, (410) 786-6673, Rural Community Hospital 
Demonstration Program Issues.
    Jeris Smith, (410) 786-0110, Frontier Community Health Integration 
Project Demonstration Issues.
    Erin Patton, (410) 786-2437, Hospital Readmissions Reduction 
Program Administration Issues.
    Lein Han, 410-786-0205, Hospital Readmissions Reduction Program--
Readmissions--Measures Issues.
    Michael Brea, (410) 786-4961, Hospital-Acquired Condition Reduction 
Program Issues.
    Annese Abdullah-Mclaughlin, (410) 786-2995, Hospital-Acquired 
Condition Reduction Program--Measures Issues.
    Grace Snyder, (410) 786-0700 and James Poyer, (410) 786-2261, 
Hospital Inpatient Quality Reporting and Hospital Value-Based 
Purchasing--Program Administration, Validation, and Reconsideration 
Issues.
    Cindy Tourison, (410) 786-1093, Hospital Inpatient Quality 
Reporting and Hospital Value-Based Purchasing--Measures Issues Except 
Hospital Consumer Assessment of Healthcare Providers and Systems 
Issues.
    Elizabeth Goldstein, (410) 786-6665, Hospital Inpatient Quality 
Reporting and Hospital Value-Based Purchasing--Hospital Consumer 
Assessment of Healthcare Providers and Systems Measures Issues.
    Nekeshia McInnis, (410) 786-4486 and Ronique Evans, (410) 786-1000, 
PPS-Exempt Cancer Hospital Quality Reporting Issues.
    Mary Pratt, (410) 786-6867, Long-Term Care Hospital Quality Data 
Reporting Issues.
    Elizabeth Holland, (410) 786-1309, Dylan Podson (410) 786-5031, and 
Bryan Rossi (410) 786-065l, Promoting Interoperability Programs.

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    Benjamin Moll, (410) 786-4390, Provider Reimbursement Review Board 
Appeals Issues.

SUPPLEMENTARY INFORMATION: Inspection of Public Comments: All comments 
received before the close of the comment period are available for 
viewing by the public, including any personally identifiable or 
confidential business information that is included in a comment. We 
post all comments received before the close of the comment period on 
the following website as soon as possible after they have been 
received: http://www.regulations.gov/. Follow the search instructions 
on that website to view public comments.

Electronic Access

    This Federal Register document is available from the Federal 
Register online database through Federal Digital System (FDsys), a 
service of the U.S. Government Printing Office. This database can be 
accessed via the internet at: http://www.gpo.gov/fdsys.

Tables Available Through the Internet on the CMS Website

    In the past, a majority of the tables referred to throughout this 
preamble and in the Addendum to the proposed rule and the final rule 
were published in the Federal Register as part of the annual proposed 
and final rules. However, beginning in FY 2012, the majority of the 
IPPS tables and LTCH PPS tables are no longer published in the Federal 
Register. Instead, these tables, generally, will be available only 
through the internet. The IPPS tables for this FY 2020 proposed rule 
are available through the internet on the CMS website at: http://www.cms.hhs.gov/Medicare/Medicare-Fee-for-Service-Payment/AcuteInpatientPPS/index.html. Click on the link on the left side of the 
screen titled, ``FY 2020 IPPS Proposed Rule Home Page'' or ``Acute 
Inpatient--Files for Download.'' The LTCH PPS tables for this FY 2020 
proposed rule are available through the internet on the CMS website at: 
http://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/LongTermCareHospitalPPS/index.html under the list item for Regulation 
Number CMS-1716-P. For further details on the contents of the tables 
referenced in this proposed rule, we refer readers to section VI. of 
the Addendum to this proposed rule.
    Readers who experience any problems accessing any of the tables 
that are posted on the CMS websites identified above should contact 
Michael Treitel at (410) 786-4552.

Table of Contents

I. Executive Summary and Background
    A. Executive Summary
    B. Background Summary
    C. Summary of Provisions of Recent Legislation Implemented in 
This Proposed Rule
    D. Summary of the Provisions of This Proposed Rule
    E. Advancing Health Information Exchange
II. Proposed Changes to Medicare Severity Diagnosis-Related Group 
(MS-DRG) Classifications and Relative Weights
    A. Background
    B. MS-DRG Reclassifications
    C. Adoption of the MS-DRGs in FY 2008
    D. Proposed FY 2020 MS-DRG Documentation and Coding Adjustment
    E. Refinement of the MS-DRG Relative Weight Calculation
    F. Proposed Changes to Specific MS-DRG Classifications
    G. Recalibration of the Proposed FY 2020 MS-DRG Relative Weights
    H. Proposed Add-On Payments for New Services and Technologies 
for FY 2020
III. Proposed Changes to the Hospital Wage Index for Acute Care 
Hospitals
    A. Background
    B. Worksheet S-3 Wage Data for the Proposed FY 2020 Wage Index
    C. Verification of Worksheet S-3 Wage Data
    D. Method for Computing the Proposed FY 2020 Unadjusted Wage 
Index
    E. Proposed Occupational Mix Adjustment to the Proposed FY 2020 
Wage Index
    F. Analysis and Implementation of the Proposed Occupational Mix 
Adjustment and the Proposed FY 2020 Occupational Mix Adjusted Wage 
Index
    G. Proposed Application of the Rural Floor, Expired Imputed 
Floor Policy, and Proposed Application of the State Frontier Floor
    H. Proposed FY 2020 Wage Index Tables
    I. Proposed Revisions to the Wage Index Based on Hospital 
Redesignations and Reclassifications
    J. Proposed Out-Migration Adjustment Based on Commuting Patterns 
of Hospital Employees
    K. Reclassification from Urban to Rural Under Section 
1886(d)(8)(E) of the Act Implemented at 42 CFR 412.103
    L. Process for Requests for Wage Index Data Corrections
    M. Proposed Labor-Related Share for the FY 2020 Wage Index
    N. Proposals to Address Wage Index Disparities Between High and 
Low Wage Index Hospitals
IV. Other Decisions and Proposed Changes to the IPPS for Operating 
Costs
    A. Proposed Changes to MS-DRGs Subject to Postacute Care 
Transfer and MS-DRG Special Payment Policies
    B. Proposed Changes in the Inpatient Hospital Updates for FY 
2020 (Sec.  412.64(d))
    C. Proposed Rural Referral Centers (RRCs) Annual Updates to 
Case-Mix Index and Discharge Criteria (Sec.  412.96)
    D. Proposed Payment Adjustment for Low-Volume Hospitals (Sec.  
412.101)
    E. Proposed Indirect Medical Education (IME) Payment Adjustment 
(Sec.  412.105)
    F. Proposed Payment Adjustment for Medicare Disproportionate 
Share Hospitals (DSHs) for FY 2020 (Sec.  412.106)
    G. Hospital Readmissions Reduction Program: Proposed Updates and 
Changes (Sec. Sec.  412.150 through 412.154)
    H. Hospital Value-Based Purchasing (VBP) Program: Proposed 
Policy Changes
    I. Hospital-Acquired Condition (HAC) Reduction Program
    J. Payments for Indirect and Direct Graduate Medical Education 
Costs (Sec. Sec.  412.105 and 413.75 through 413.83)
    K. Rural Community Hospital Demonstration Program
V. Proposed Changes to the IPPS for Capital-Related Costs
    A. Overview
    B. Additional Provisions
    C. Proposed Annual Update for FY 2020
VI. Proposed Changes for Hospitals Excluded From the IPPS
    A. Proposed Rate-of-Increase in Payments to Excluded Hospitals 
for FY 2020
    B. Request for Public Comments on Methodologies and Requirements 
for Adjustments to Rate-of-Increase Ceiling
    C. Critical Access Hospitals (CAHs)
VII. Proposed Changes to the Long-Term Care Hospital Prospective 
Payment System (LTCH PPS) for FY 2019
    A. Background of the LTCH PPS
    B. Proposed Medicare Severity Long-Term Care Diagnosis-Related 
Group (MS-LTC-DRG) Classifications and Relative Weights for FY 2020
    C. Proposed Payment Adjustment for LTCH Discharges That Do Not 
Meet the Applicable Discharge Payment Percentage
    D. Proposed Changes to the LTCH PPS Payment Rates and Other 
Proposed Changes to the LTCH PPS for FY 2020
VIII. Proposed Quality Data Reporting Requirements for Specific 
Providers and Suppliers
    A. Hospital Inpatient Quality Reporting (IQR) Program
    B. PPS-Exempt Cancer Hospital Quality Reporting (PCHQR) Program
    C. Long-Term Care Hospital Quality Reporting Program (LTCH QRP)
    D. Proposed Changes to the Medicare and Medicaid Promoting 
Interoperability Programs
IX. MedPAC Recommendations
X. Other Required Information
    A. Publicly Available Data
    B. Collection of Information Requirements
    C. Response to Public Comments
XI. Provider Reimbursement Review Board (PRRB) Appeals

Regulation Text

Addendum--Proposed Schedule of Standardized Amounts, Update Factors, 
and Rate-of-Increase Percentages Effective With Cost Reporting Periods 
Beginning on or After October 1, 2019 and Proposed Payment Rates for 
LTCHs Effective With Discharges Occurring on or After October 1, 2019

I. Summary and Background
II. Proposed Changes to the Prospective Payment Rates for Hospital 
Inpatient

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Operating Costs for Acute Care Hospitals for FY 2020
    A. Calculation of the Proposed Adjusted Standardized Amount
    B. Proposed Adjustments for Area Wage Levels and Cost-of-Living
    C. Calculation of the Proposed Prospective Payment Rates
III. Proposed Changes to Payment Rates for Acute Care Hospital 
Inpatient Capital-Related Costs for FY 2020
    A. Determination of Proposed Federal Hospital Inpatient Capital-
Related Prospective Payment Rate Update
    B. Calculation of the Proposed Inpatient Capital-Related 
Prospective Payments for FY 2020
    C. Capital Input Price Index
IV. Proposed Changes to Payment Rates for Excluded Hospitals: Rate-
of-Increase Percentages for FY 2020
V. Proposed Updates to the Payment Rates for the LTCH PPS for FY 
2020
    A. Proposed LTCH PPS Standard Federal Payment Rate for FY 2020
    B. Proposed Adjustment for Area Wage Levels Under the LTCH PPS 
for FY 2020
    C. Proposed LTCH PPS Cost-of-Living Adjustment (COLA) for LTCHs 
Located in Alaska and Hawaii
    D. Proposed Adjustment for LTCH PPS High-Cost Outlier (HCO) 
Cases
    E. Proposed Update to the IPPS Comparable/Equivalent Amounts to 
Reflect the Statutory Changes to the IPPS DSH Payment Adjustment 
Methodology
    F. Computing the Proposed Adjusted LTCH PPS Federal Prospective 
Payments for FY 2020
VI. Tables Referenced in This Proposed Rule and Available Through 
the Internet on the CMS Website

Appendix A--Economic Analyses

I. Regulatory Impact Analysis
    A. Statement of Need
    B. Overall Impact
    C. Objectives of the IPPS and the LTCH PPS
    D. Limitations of Our Analysis
    E. Hospitals Included in and Excluded From the IPPS
    F. Effects on Hospitals and Hospital Units Excluded From the 
IPPS
    G. Quantitative Effects of the Proposed Policy Changes Under the 
IPPS for Operating Costs
    H. Effects of Other Proposed Policy Changes
    I. Effects of Proposed Changes in the Capital IPPS
    J. Effects of Proposed Payment Rate Changes and Policy Changes 
Under the LTCH PPS
    K. Effects of Proposed Requirements for Hospital Inpatient 
Quality Reporting (IQR) Program
    L. Effects of Proposed Requirements for the PPS-Exempt Cancer 
Hospital Quality Reporting (PCHQR) Program
    M. Effects of Proposed Requirements for the Long-Term Care 
Hospital Quality Reporting Program (LTCH QRP)
    N. Effects of Proposed Requirements Regarding the Medicare 
Promoting Interoperability Program
    O. Alternatives Considered
    P. Reducing Regulation and Controlling Regulatory Costs
    Q. Overall Conclusion
    R. Regulatory Review Costs
II. Accounting Statements and Tables
    A. Acute Care Hospitals
    B. LTCHs
III. Regulatory Flexibility Act (RFA) Analysis
IV. Impact on Small Rural Hospitals
V. Unfunded Mandate Reform Act (UMRA) Analysis
VI. Executive Order 13175
VII. Executive Order 12866

Appendix B: Recommendation of Update Factors for Operating Cost Rates 
of Payment for Inpatient Hospital Services

I. Background
II. Proposed Inpatient Hospital Update for FY 2020
    A. Proposed FY 2020 Inpatient Hospital Update
    B. Proposed Update for SCHs and MDHs for FY 2020
    C. Proposed FY 2020 Puerto Rico Hospital Update
    D. Proposed Update for Hospitals Excluded From the IPPS
    E. Proposed Update for LTCHs for FY 2020
III. Secretary's Recommendation
IV. MedPAC Recommendation for Assessing Payment Adequacy and 
Updating Payments in Traditional Medicare

I. Executive Summary and Background

A. Executive Summary

1. Purpose and Legal Authority
    This proposed rule would make payment and policy changes under the 
Medicare inpatient prospective payment systems (IPPS) for operating and 
capital-related costs of acute care hospitals as well as for certain 
hospitals and hospital units excluded from the IPPS. In addition, it 
would make payment and policy changes for inpatient hospital services 
provided by long-term care hospitals (LTCHs) under the long-term care 
hospital prospective payment system (LTCH PPS). This proposed rule also 
would make policy changes to programs associated with Medicare IPPS 
hospitals, IPPS-excluded hospitals, and LTCHs. In this proposed rule, 
we are including proposals to address wage index disparities between 
high and low wage index hospitals; to provide for an alternative IPPS 
new technology add-on payment pathway for certain transformative new 
devices; and to revise the calculation of the IPPS new technology add-
on payment. In addition, we are requesting public comments on the 
substantial clinical improvement criterion for evaluating applications 
for both the IPPS new technology add-on payment and the OPPS 
transitional pass-through payment for devices, and we discuss potential 
revisions that we are considering adopting as final policies related to 
the substantial clinical improvement criterion for FY 2020 for IPPS and 
CY 2020 for the OPPS.
    We are proposing to establish new requirements and revise existing 
requirements for quality reporting by specific providers (acute care 
hospitals, PPS-exempt cancer hospitals, and LTCHs) that are 
participating in Medicare. We also are proposing to establish new 
requirements and revise existing requirements for eligible hospitals 
and CAHs participating in the Medicare and Medicaid Promoting 
Interoperability Programs. We are proposing to update policies for the 
Hospital Value-Based Purchasing (VBP) Program, the Hospital 
Readmissions Reduction Program, and the Hospital-Acquired Condition 
(HAC) Reduction Program.
    Under various statutory authorities, we are proposing to make 
changes to the Medicare IPPS, to the LTCH PPS, and to other related 
payment methodologies and programs for FY 2020 and subsequent fiscal 
years. These statutory authorities include, but are not limited to, the 
following:
     Section 1886(d) of the Social Security Act (the Act), 
which 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 that, instead of paying for capital-related costs of inpatient 
hospital services on a reasonable cost basis, the Secretary use a 
prospective payment system (PPS).
     Section 1886(d)(1)(B) of the Act, which specifies that 
certain hospitals and hospital units are excluded from the IPPS. These 
hospitals and units are: Rehabilitation hospitals and units; LTCHs; 
psychiatric hospitals and units; children's hospitals; cancer 
hospitals; extended neoplastic disease care hospitals, and hospitals 
located outside the 50 States, the District of Columbia, and Puerto 
Rico (that is, hospitals located in the U.S. Virgin Islands, Guam, the 
Northern Mariana Islands, and American Samoa). Religious nonmedical 
health care institutions (RNHCIs) are also excluded from the IPPS.
     Sections 123(a) and (c) of the BBRA (Pub. L. 106-113) and 
section 307(b)(1) of the BIPA (Pub. L. 106-554) (as codified under 
section 1886(m)(1) of the Act), which provide for the development and 
implementation of a prospective payment system for payment for 
inpatient hospital services of LTCHs described in section 
1886(d)(1)(B)(iv) of the Act.

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     Sections 1814(l), 1820, and 1834(g) of the Act, which 
specify that payments are made to critical access hospitals (CAHs) 
(that is, rural hospitals or facilities that meet certain statutory 
requirements) for inpatient and outpatient services and that these 
payments are generally based on 101 percent of reasonable cost.
     Section 1866(k) of the Act, which establishes a quality 
reporting program for hospitals described in section 1886(d)(1)(B)(v) 
of the Act, referred to as ``PPS-exempt cancer hospitals.''
     Section 1886(a)(4) of the Act, which specifies that 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.
     Section 1886(b)(3)(B)(viii) of the Act, which requires the 
Secretary to reduce the applicable percentage increase that would 
otherwise apply to the standardized amount applicable to a subsection 
(d) hospital for discharges occurring in a fiscal year if the hospital 
does not submit data on measures in a form and manner, and at a time, 
specified by the Secretary.
     Section 1886(o) of the Act, which requires the Secretary 
to establish a Hospital Value-Based Purchasing (VBP) Program, under 
which value-based incentive payments are made in a fiscal year to 
hospitals meeting performance standards established for a performance 
period for such fiscal year.
     Section 1886(p) of the Act, which establishes a Hospital-
Acquired Condition (HAC) Reduction Program, under which payments to 
applicable hospitals are adjusted to provide an incentive to reduce 
hospital-acquired conditions.
     Section 1886(q) of the Act, as amended by section 15002 of 
the 21st Century Cures Act, which establishes the Hospital Readmissions 
Reduction Program. Under the program, payments for discharges from an 
applicable hospital as defined under section 1886(d) of the Act will be 
reduced to account for certain excess readmissions. Section 15002 of 
the 21st Century Cures Act requires the Secretary to compare hospitals 
with respect to the number of their Medicare-Medicaid dual-eligible 
beneficiaries (dual-eligibles) in determining the extent of excess 
readmissions.
     Section 1886(r) of the Act, as added by section 3133 of 
the Affordable Care Act, which provides for a reduction to 
disproportionate share hospital (DSH) payments under section 
1886(d)(5)(F) of the Act and for a new uncompensated care payment to 
eligible hospitals. Specifically, section 1886(r) of the Act requires 
that, for fiscal year 2014 and each subsequent fiscal year, subsection 
(d) hospitals that would otherwise receive a DSH payment made under 
section 1886(d)(5)(F) of the Act will receive two separate payments: 
(1) 25 percent of the amount they previously would have received under 
section 1886(d)(5)(F) of the Act for DSH (``the empirically justified 
amount''), and (2) an additional payment for the DSH hospital's 
proportion of uncompensated care, determined as the product of three 
factors. These three factors are: (1) 75 percent of the payments that 
would otherwise be made under section 1886(d)(5)(F) of the Act; (2) 1 
minus the percent change in the percent of individuals who are 
uninsured; and (3) a hospital's uncompensated care amount relative to 
the uncompensated care amount of all DSH hospitals expressed as a 
percentage.
     Section 1886(m)(6) of the Act, as added by section 
1206(a)(1) of the Pathway for Sustainable Growth Rate (SGR) Reform Act 
of 2013 (Pub. L. 113-67) and amended by section 51005(a) of the 
Bipartisan Budget Act of 2018 (Pub. L. 115-123), which provided for the 
establishment of site neutral payment rate criteria under the LTCH PPS, 
with implementation beginning in FY 2016, and provides for a 4-year 
transitional blended payment rate for discharges occurring in LTCH cost 
reporting periods beginning in FYs 2016 through 2019. Section 51005(b) 
of the Bipartisan Budget Act of 2018 amended section 1886(m)(6)(B) by 
adding new clause (iv), which specifies that the IPPS comparable amount 
defined in clause (ii)(I) shall be reduced by 4.6 percent for FYs 2018 
through 2026.
     Section 1886(m)(5)(D)(iv) of the Act, as added by section 
1206(c) of the Pathway for Sustainable Growth Rate (SGR) Reform Act of 
2013 (Pub. L. 113-67), which provides for the establishment of a 
functional status quality measure in the LTCH QRP for change in 
mobility among inpatients requiring ventilator support.
     Section 1899B of the Act, as added by section 2(a) of the 
Improving Medicare Post-Acute Care Transformation Act of 2014 (IMPACT 
Act) (Pub. L. 113-185), which provides for the establishment of 
standardized data reporting for certain post-acute care providers, 
including LTCHs.
2. Summary of the Major Provisions
    Below we provide a summary of the major provisions in this proposed 
rule. In general, these major provisions are being proposed as part of 
the annual update to the payment policies and payment rates, consistent 
with the applicable statutory provisions. A general summary of the 
proposed changes in this proposed rule is presented in section I.D. of 
the preamble of this proposed rule.
a. Proposed MS-DRG Documentation and Coding Adjustment
    Section 631 of the American Taxpayer Relief Act of 2012 (ATRA, Pub. 
L. 112-240) amended section 7(b)(1)(B) of Public Law 110-90 to require 
the Secretary to make a recoupment adjustment to the standardized 
amount of Medicare payments to acute care hospitals to account for 
changes in MS-DRG documentation and coding that do not reflect real 
changes in case-mix, totaling $11 billion over a 4-year period of FYs 
2014, 2015, 2016, and 2017. The FY 2014 through FY 2017 adjustments 
represented the amount of the increase in aggregate payments as a 
result of not completing the prospective adjustment authorized under 
section 7(b)(1)(A) of Public Law 110-90 until FY 2013. Prior to the 
ATRA, this amount could not have been recovered under Public Law 110 
90. Section 414 of the Medicare Access and CHIP Reauthorization Act of 
2015 (MACRA) (Pub. L. 114-10) replaced the single positive adjustment 
we intended to make in FY 2018 with a 0.5 percent positive adjustment 
to the standardized amount of Medicare payments to acute care hospitals 
for FYs 2018 through 2023. (The FY 2018 adjustment was subsequently 
adjusted to 0.4588 percent by section 15005 of the 21st Century Cures 
Act.) Therefore, for FY 2020, we are proposing to make an adjustment of 
+ 0.5 percent to the standardized amount.
b. Request for Information on the New Technology Add-On Payment and 
Transitional Device Pass-Through Payment Substantial Clinical 
Improvement Criterion and Discussion of Potential Revisions to the New 
Technology Add-On Payment and Transitional Device Pass-Through Payment 
Substantial Clinical Improvement Criterion
    The substantial clinical improvement criterion that is used to 
evaluate a technology that is the subject of an application for the new 
technology add-on payment under the IPPS or an application for the 
transitional pass-through payment for additional costs of innovative 
devices under the OPPS is the subject of the request for information 
and the discussion of potential revisions included in this proposed 
rule.

[[Page 19162]]

    We understand that greater clarity regarding what would 
substantiate the requirements of this criterion would help the public, 
including innovators, better understand how CMS evaluates new 
technology applications for add-on payments and provide greater 
predictability about which applications will meet the criterion for 
substantial clinical improvement. We are considering potential 
revisions to the substantial clinical improvement criterion under the 
IPPS new technology add-on payment policy and the OPPS transitional 
pass-through payment policy for devices policy, and are seeking public 
comments on the type of additional detail and guidance that the public 
and applicants for new technology add-on payments would find useful. 
The comments we receive in response to those general questions will 
inform future rulemaking after the FY 2020 IPPS/LTCH PPS final rule. 
This request for public comments is intended to be broad in scope and 
provide a foundation for potential rulemaking in future years.
    In addition to this broad request for public comments for potential 
rulemaking in future years, in order to respond to stakeholder feedback 
requesting greater understanding of CMS' approach to evaluating 
substantial clinical improvement, we are soliciting public comments on 
specific changes or clarifications to the IPPS and OPPS substantial 
clinical improvement criterion that CMS might consider making in the FY 
2020 IPPS/LTCH PPS final rule for applications received beginning in FY 
2020 for the IPPS and CY 2020 for the OPPS to provide greater clarity 
and predictability.
c. Proposed Alternative Inpatient New Technology Add-On Payment Pathway 
for Transformative New Devices
    After consideration of the issues discussed in section III.H.8. of 
the preamble of this proposed rule relating to the Food and Drug 
Administration's (FDA's) expedited programs, and consistent with the 
Administration's commitment to addressing barriers to health care 
innovation and ensuring that Medicare beneficiaries have access to 
critical and life-saving new cures and technologies that improve 
beneficiary health outcomes, we concluded that it would be appropriate 
to develop an alternative pathway for the inpatient new technology add-
on payment for transformative medical devices. In situations where a 
new medical device is part of the FDA's Breakthrough Devices Program 
and has received FDA marketing authorization (that is, the device has 
received pre-market approval (PMA); 510(k) clearance; or the granting 
of a De Novo classification request), we are proposing an alternative 
inpatient new technology add-on payment pathway to facilitate access to 
this technology for Medicare beneficiaries.
    Specifically, we are proposing that, for applications received for 
IPPS new technology add-on payments for FY 2021 and subsequent fiscal 
years, if a medical device is part of the FDA's Breakthrough Devices 
Program and received FDA marketing authorization, such a device would 
be considered new and not substantially similar to an existing 
technology for purposes of new technology add-on payment under the 
IPPS. In light of the criteria applied under the FDA's Breakthrough 
Devices Program, and because the technology may not have a sufficient 
evidence base to demonstrate substantial clinical improvement at the 
time of FDA marketing authorization, we also are proposing that the 
medical device would not need to meet the requirement under 42 CFR 
412.87(b)(1) that it represent an advance that substantially improves, 
relative to technologies previously available, the diagnosis or 
treatment of Medicare beneficiaries.
d. Proposed Revision of the Calculation of the Inpatient Hospital New 
Technology Add-On Payment
    The current calculation of the new technology add-on payment is 
based on the cost to hospitals for the new medical service or 
technology. Under Sec.  412.88, if the costs of the discharge 
(determined by applying cost-to-charge ratios (CCRs) as described in 
Sec.  412.84(h)) exceed the full DRG payment (including payments for 
IME and DSH, but excluding outlier payments), Medicare will make an 
add-on payment equal to the lesser of: (1) 50 percent of the costs of 
the new medical service or technology; or (2) 50 percent of the amount 
by which the costs of the case exceed the standard DRG payment. Unless 
the discharge qualifies for an outlier payment, the additional Medicare 
payment is limited to the full MS-DRG payment plus 50 percent of the 
estimated costs of the new technology or medical service.
    After consideration of the concerns raised by commenters and other 
stakeholders, we agree that there may be merit to the recommendations 
to increase the maximum add-on amount, and that capping the add-on 
payment amount at 50 percent could, in some cases, no longer provide a 
sufficient incentive for the use of new technology. To address this 
issue, we believe it would be appropriate to modify the current payment 
mechanism to increase the amount of the maximum add-on payment amount 
to 65 percent. Therefore, we are proposing that, beginning with 
discharges occurring on or after October 1, 2019, if the costs of a 
discharge involving a new medical service or technology exceed the full 
DRG payment (including payments for IME and DSH, but excluding outlier 
payments), Medicare would make an add-on payment equal to the lesser 
of: (1) 65 percent of the costs of the new medical service or 
technology; or (2) 65 percent of the amount by which the costs of the 
case exceed the standard DRG payment.
e. Proposals To Address Wage Index Disparities Between High and Low 
Wage Index Hospitals
    In the FY 2019 IPPS/LTCH PPS proposed rule (83 FR 20372), we 
invited the public to submit further comments, suggestions, and 
recommendations for regulatory and policy changes to the Medicare wage 
index. Many of the responses received from this request for information 
(RFI) reflect a common concern that the current wage index system 
perpetuates and exacerbates the disparities between high and low wage 
index hospitals. Many respondents also expressed concern that the 
calculation of the rural floor has allowed a limited number of States 
to manipulate the wage index system to achieve higher wages for many 
urban hospitals in those States at the expense of hospitals in other 
States, which also contributes to wage index disparities.
    To help mitigate these wage index disparities, including those 
resulting from the inclusion of hospitals with rural reclassifications 
under 42 CFR 412.103 in the rural floor, we are proposing to reduce the 
disparity between high and low wage index hospitals by increasing the 
wage index values for certain hospitals with low wage index values and 
decreasing the wage index values for certain hospitals with high wage 
index values for budget neutrality purposes, as well as changing the 
calculation of the rural floor. We also are proposing a transition for 
hospitals experiencing significant decreases in their wage index values 
as a result of these proposed changes. We are proposing to make these 
changes in a budget neutral manner.
    In this proposed rule, we are proposing to increase the wage index 
for hospitals with a wage index value below the 25th percentile wage 
index value for a fiscal year by half the difference between the 
otherwise applicable final wage index value for a year for that 
hospital and the 25th percentile wage index value for that year across 
all hospitals. Furthermore, we are

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proposing that this policy would be effective for at least 4 years, 
beginning in FY 2020, in order to allow employee compensation increases 
implemented by these hospitals sufficient time to be reflected in the 
wage index calculation. Under our proposal, in order to offset the 
estimated increase in IPPS payments to hospitals with wage index values 
below the 25th percentile wage index value, we are proposing to 
decrease the wage index values for certain hospitals with high wage 
index values (that is, hospitals with wage index values above the 75th 
percentile wage index value), but preserve the rank order among those 
values.
    In addition, we are proposing to remove urban to rural 
reclassifications from the calculation of the rural floor, such that, 
beginning in FY 2020, the rural floor would be calculated without 
including the wage data of hospitals that have reclassified as rural 
under section 1886(d)(8)(E) of the Act (as implemented in the 
regulations at Sec.  412.103). Also, for the purposes of applying the 
provisions of section 1886(d)(8)(C)(iii) of the Act, we are proposing 
to remove urban to rural reclassifications from the calculation of 
``the wage index for rural areas in the State in which the county is 
located'' as referred to in the statute.
    Lastly, for FY 2020, we are proposing to place a 5-percent cap on 
any decrease in a hospital's wage index from the hospital's final wage 
index in FY 2019. We are proposing to apply a budget neutrality 
adjustment to the standardized amount so that our proposed transition 
for hospitals that could be negatively impacted is implemented in a 
budget neutral manner.
f. Proposed DSH Payment Adjustment and Additional Payment for 
Uncompensated Care
    Section 3133 of the Affordable Care Act modified the Medicare 
disproportionate share hospital (DSH) payment methodology beginning in 
FY 2014. Under section 1886(r) of the Act, which was added by section 
3133 of the Affordable Care Act, starting in FY 2014, DSHs receive 25 
percent of the amount they previously would have received under the 
statutory formula for Medicare DSH payments in section 1886(d)(5)(F) of 
the Act. The remaining amount, equal to 75 percent of the amount that 
otherwise would have been paid as Medicare DSH payments, is paid as 
additional payments after the amount is reduced for changes in the 
percentage of individuals that are uninsured. Each Medicare DSH will 
receive an additional payment based on its share of the total amount of 
uncompensated care for all Medicare DSHs for a given time period.
    In this FY 2020 IPPS/LTCH PPS proposed rule, we are proposing to 
update our estimates of the three factors used to determine 
uncompensated care payments for FY 2020. We are proposing to continue 
to use uninsured estimates produced by CMS' Office of the Actuary 
(OACT) as part of the development of the National Health Expenditure 
Accounts (NHEA) in the calculation of Factor 2. We also are proposing 
to use a single year of data on uncompensated care costs from Worksheet 
S-10 for FY 2015 to determine Factor 3 for FY 2020. We also are seeking 
public comments on whether we should, due to changes in the reporting 
instructions that became effective for FY 2017, alternatively use a 
single year of Worksheet S-10 data from the FY 2017 cost reports, 
instead of the FY 2015 Worksheet S-10 data, to calculate Factor 3 for 
FY 2020. In addition, we are proposing to continue to use only data 
regarding low-income insured days for FY 2013 to determine the amount 
of uncompensated care payments for Puerto Rico hospitals, and Indian 
Health Service and Tribal hospitals. We are not proposing specific 
Factor 3 polices for all-inclusive rate providers for FY 2020. In this 
proposed rule, we also are proposing to continue to use the following 
established policies: (1) For providers with multiple cost reports, 
beginning in the same fiscal year, to use the longest cost report and 
annualize Medicaid data and uncompensated care data if a hospital's 
cost report does not equal 12 months of data; (2) in the rare case 
where a provider has multiple cost reports beginning in the same fiscal 
year, but one report also spans the entirety of the following fiscal 
year, such that the hospital has no cost report for that fiscal year, 
to use the cost report that spans both fiscal years for the latter 
fiscal year; and (3) to apply statistical trim methodologies to 
potentially aberrant cost-to-charge ratios (CCRs) and potentially 
aberrant uncompensated care costs reported on the Worksheet S-10.
g. Proposed Changes to the LTCH PPS
    In this proposed rule, we set forth proposed changes to the LTCH 
PPS Federal payment rates, factors, and other payment rate policies 
under the LTCH PPS for FY 2020. We also are proposing the payment 
adjustment for LTCH discharges when the LTCH does not meet the 
applicable discharge payment percentage and a proposed reinstatement 
process, as required by section 1886(m)(6)(C) of the Act. An LTCH would 
be subject to this payment adjustment if, for cost reporting periods 
beginning in FY 2020 and subsequent fiscal years, the LTCH's percentage 
of Medicare discharges that meet the criteria for exclusion from the 
site neutral payment rate (that is, discharges paid the LTCH PPS 
standard Federal payment rate) of its total number of Medicare FFS 
discharges paid under the LTCH PPS during the cost reporting period is 
not at least 50 percent.
h. Reduction of Hospital Payments for Excess Readmissions
    We are proposing to make changes to policies for the Hospital 
Readmissions Reduction Program, which was established under section 
1886(q) of the Act, as amended by section 15002 of the 21st Century 
Cures Act. The Hospital Readmissions Reduction Program requires a 
reduction to a hospital's base operating DRG payment to account for 
excess readmissions of selected applicable conditions. For FY 2017 and 
subsequent years, the reduction is based on a hospital's risk-adjusted 
readmission rate during a 3-year period for acute myocardial infarction 
(AMI), heart failure (HF), pneumonia, chronic obstructive pulmonary 
disease (COPD), elective primary total hip arthroplasty/total knee 
arthroplasty (THA/TKA), and coronary artery bypass graft (CABG) 
surgery. In this proposed rule, we are proposing the following 
policies: (1) A measure removal policy that aligns with the removal 
factor policies previously adopted in other quality reporting and 
quality payment programs; (2) an update to the Program's definition of 
``dual-eligible'' beginning with the FY 2021 program year to allow for 
a 1-month lookback period in data sourced from the State Medicare 
Modernization Act (MMA) files to determine dual-eligible status for 
beneficiaries who die in the month of discharge; (3) a subregulatory 
process to address any potential future nonsubstantive changes to the 
payment adjustment factor components; and (4) an update to the 
Program's regulations at 42 CFR 412.152 and 412.154 to reflect proposed 
policies and to codify additional previously finalized policies.
i. Hospital Value-Based Purchasing (VBP) Program
    Section 1886(o) of the Act requires the Secretary to establish a 
Hospital VBP Program under which value-based incentive payments are 
made in a fiscal year to hospitals based on their performance on 
measures established for a performance period for such fiscal year. In 
this proposed rule, we are proposing that the Hospital VBP

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Program will use the same data used by the HAC Reduction Program for 
purposes of calculating the Centers for Disease Control and Prevention 
(CDC) National Health Safety Network (NHSN) Healthcare-Associated 
Infection (HAI) measures beginning with CY 2020 data collection, when 
the Hospital IQR Program will no longer collect data on those measures, 
and will rely on HAC Reduction Program validation to ensure the 
accuracy of CDC NHSN HAI measure data used in the Hospital VBP Program. 
We also are newly establishing certain performance standards.
j. Hospital-Acquired Condition (HAC) Reduction Program
    Section 1886(p) of the Act establishes an incentive to hospitals to 
reduce the incidence of hospital-acquired conditions by requiring the 
Secretary to make an adjustment to payments to applicable hospitals 
effective for discharges beginning on October 1, 2014. This 1-percent 
payment reduction applies to hospitals that rank in the worst-
performing quartile (25 percent) of all applicable hospitals, relative 
to the national average, of conditions acquired during the applicable 
period and on all of the hospital's discharges for the specified fiscal 
year. As part of our agency-wide Patients over Paperwork and Meaningful 
Measures Initiatives, discussed in section I.A.2. of the FY 2019 IPPS/
LTCH PPS final rule (83 FR 41147 and 41148), we are proposing to: (1) 
Adopt a measure removal policy that aligns with the removal factor 
policies previously adopted in other quality reporting and quality 
payment programs; (2) clarify administrative policies for validation of 
the CDC NHSN HAI measures; (3) adopt the data collection periods for 
the FY 2022 program year; and (4) update 42 CFR 412.172(f) to reflect 
policies finalized in the FY 2019 IPPS/LTCH PPS final rule.
k. Hospital Inpatient Quality Reporting (IQR) Program
    Under section 1886(b)(3)(B)(viii) of the Act, subsection (d) 
hospitals are required to report data on measures selected by the 
Secretary for a fiscal year in order to receive the full annual 
percentage increase that would otherwise apply to the standardized 
amount applicable to discharges occurring in that fiscal year.
    In this proposed rule, we are proposing to make several changes. We 
are proposing to: (1) Adopt two opioid-related eCQMs (Safe Use of 
Opioids--Concurrent Prescribing eCQM (NQF #3316e) and Hospital Harm--
Opioid-Related Adverse Events eCQM) beginning with the CY 2021 
reporting period/FY 2023 payment determination; (2) adopt the Hybrid 
Hospital-Wide All-Cause Readmission (Hybrid HWR) measure (NQF #2879) in 
a stepwise fashion, beginning with two voluntary reporting periods 
which would run from July 1, 2021 through June 30, 2022, and from July 
1, 2022 through June 30, 2023, before requiring reporting of the 
measure for the reporting period that would run from July 1, 2023 
through June 30, 2024, impacting the FY 2026 payment determination and 
for subsequent years; and (3) remove the Claims-Based Hospital-Wide 
All-Cause Unplanned Readmission Measure (NQF #1789) (HWR claims-only 
measure) beginning with the FY 2026 payment determination. We also are 
proposing reporting and submission requirements for eCQMs, including 
proposals to: (1) Extend current eCQM reporting and submission 
requirements for both the CY 2020 reporting period/FY 2022 payment 
determination and CY 2021 reporting period/FY 2023 payment 
determination; (2) change eCQM reporting and submission requirements 
for the CY 2022 reporting period/FY 2024 payment determination, such 
that hospitals would be required to report one, self-selected calendar 
quarter of data for three self-selected eCQMs and the proposed Safe Use 
of Opioids--Concurrent Prescribing eCQM (NQF #3316e), for a total of 
four eCQMs; and (3) continue requiring that EHRs be certified to all 
available eCQMs used in the Hospital IQR Program for the CY 2020 
reporting period/FY 2022 payment determination and subsequent years. 
These proposals are in alignment with proposals under the Promoting 
Interoperability Program. We also are proposing reporting and 
submission requirements for the Hybrid HWR measure. In addition, we are 
seeking public comments on three measures for potential future 
inclusion in the Hospital IQR Program.
l. Long-Term Care Hospital Quality Reporting Program (LTCH QRP)
    The LTCH QRP is authorized by section 1886(m)(5) of the Act and 
applies to all hospitals certified by Medicare as long-term care 
hospitals (LTCHs). Under the LTCH QRP, the Secretary must reduce by 2 
percentage points the annual update to the LTCH PPS standard Federal 
rate for discharges for an LTCH during a fiscal year if the LTCH fails 
to submit data in accordance with the LTCH QRP requirements specified 
for that fiscal year. As discussed in section VIII.C. of the preamble 
of this proposed rule, we are proposing to adopt two measures that meet 
the requirements of section 1899B(c)(1)(E) of the Act, modify an 
existing measure, and adopt new standardized patient assessment data 
elements that satisfy section 1899B(b) of the Act. We also are 
proposing to move the implementation date of the LTCH Continuity 
Assessment Record and Evaluation Data Set (LTCH CARE Data Set or LCDS) 
from April to October to align with other post-acute care programs 
beginning October 1, 2020. Lastly, we are proposing updates related to 
the system used for the submission of data and related regulations.
m. Medicare and Medicaid Promoting Interoperability Programs
    For purposes of an increased level of stability, reducing the 
burden on eligible hospitals and CAHs, and clarifying certain existing 
policies, we are proposing several changes to the Medicare Promoting 
Interoperability Program. Specifically, we are proposing to: (1) 
Eliminate requirement that, for the FY 2020 payment adjustment year, 
for an eligible hospital that has not successfully demonstrated it is a 
meaningful EHR user in a prior year, the EHR reporting period in CY 
2019 must end before and the eligible hospital must successfully 
register for and attest to meaningful use no later than the October 1, 
2019 deadline; (2) establish an EHR reporting period of a minimum of 
any continuous 90-day period in CY 2021 for new and returning 
participants (eligible hospitals and CAHs) in the Medicare Promoting 
Interoperability Program attesting to CMS; (3) require that the 
Medicare Promoting Interoperability Program measure actions must occur 
within the EHR reporting period beginning with the EHR reporting period 
in CY 2020; (4) revise the Query of PDMP measure to make it an optional 
measure worth 5 bonus points in CY 2020, remove the exclusions 
associated with this measure in CY 2020, require a yes/no response 
instead of a numerator and denominator for CY 2019 and CY 2020, and 
clearly state our intended policy that the measure is worth a full 5 
bonus points in CY 2019 and CY 2020; (5) change the maximum points 
available for the e-Prescribing measure to 10 points beginning in CY 
2020, in the event we finalize the proposed changes to the Query of 
PDMP measure; (6) remove the Verify Opioid Treatment Agreement measure 
beginning in CY 2020 and clearly state our intended policy that this 
measure is worth a full 5 bonus points in CY 2019; and (7) revise the 
Support Electronic Referral Loops by Receiving and Incorporating Health 
Information measure to more clearly

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capture the previously established policy regarding CEHRT use. We are 
also proposing to amend our regulations to incorporate several of these 
proposals.
    For CQM reporting under the Medicare and Medicaid Promoting 
Interoperability Programs, we are generally proposing to align our 
requirements with requirements under the Hospital IQR Program. 
Specifically, we are proposing to: (1) Adopt two opioid-related eCQMs 
(Safe Use of Opioids--Concurrent Prescribing eCQM (NQF #3316e) and 
Hospital Harm--Opioid-Related Adverse Events eCQM) beginning with the 
reporting period in CY 2021; (2) extend current CQM reporting and 
submission requirements for the reporting periods in CY 2020 and CY 
2021; and (3) establish CQM reporting and submission requirements for 
the reporting period in CY 2022, which would require all eligible 
hospitals and CAHs to report on the proposed Safe Use of Opioids--
Concurrent Prescribing eCQM (NQF #3316e) beginning with the reporting 
period in CY 2022.
    We are seeking public comments on whether we should consider 
proposing to adopt in future rulemaking the Hybrid Hospital-Wide All-
Cause Readmission (Hybrid HWR) measure beginning with the reporting 
period in CY 2023, a measure which we are proposing to adopt under the 
Hospital IQR Program, and we are seeking information on a variety of 
issues regarding the future direction of the Medicare and Medicaid 
Promoting Interoperability Programs.
3. Summary of Costs and Benefits
     Proposed Adjustment for MS-DRG Documentation and Coding 
Changes. Section 414 of the MACRA replaced the single positive 
adjustment we intended to make in FY 2018 once the recoupment required 
by section 631 of the ATRA was complete with a 0.5 percentage point 
positive adjustment to the standardized amount of Medicare payments to 
acute care hospitals for FYs 2018 through 2023. (The FY 2018 adjustment 
was subsequently adjusted to 0.4588 percentage point by section 15005 
of the 21st Century Cures Act.) For FY 2020, we are proposing to make 
an adjustment of +0.5 percentage point to the standardized amount 
consistent with the MACRA.
     Proposed Alternative Inpatient New Technology Add-On 
Payment Pathway for Transformative New Devices: In this proposed rule, 
we are proposing an alternative inpatient new technology add-on payment 
pathway for a new medical device that is part of the FDA Breakthrough 
Devices Program and has received FDA marketing authorization, that is, 
received PMA approval, 510(k) clearance, or the granting of De Novo 
classification request.
    Given the relatively recent introduction of FDA's Breakthrough 
Devices Program, there have not been any medical devices that were part 
of the Breakthrough Devices Program and received FDA marketing 
authorization and for which the applicant applied for a new technology 
add-on payment under the IPPS and was not approved. Therefore, it is 
not possible to quantify the impact of this proposal.
     Proposed Changes to the Calculation of the 
Inpatient Hospital New Technology Add-On Payment: The current 
calculation of the new technology add-on payment is based on the cost 
to hospitals for the new medical service or technology. Under existing 
Sec.  412.88, if the costs of the discharge exceed the full DRG payment 
(including payments for IME and DSH, but excluding outlier payments), 
Medicare makes an add-on payment equal to the lesser of: (1) 50 percent 
of the estimated costs of the new technology or medical service; or (2) 
50 percent of the amount by which the costs of the case exceed the 
standard DRG payment. In this proposed rule, we are proposing to modify 
the current payment mechanism to increase the amount of the maximum 
add-on payment amount to 65 percent. Therefore, we are proposing that 
if the costs of a discharge involving a new technology exceed the full 
DRG payment (including payments for IME and DSH, but excluding outlier 
payments), Medicare would make an add-on payment equal to the lesser 
of: (1) 65 percent of the costs of the new medical service or 
technology; or (2) 65 percent of the amount by which the costs of the 
case exceed the standard DRG payment.
    We estimate that if we finalize our proposals for the 9 
technologies for which we are proposing to continue to make new 
technology add-on payments in FY 2020 and if we determine that all 17 
of the FY 2020 new technology add-on payment applications meet the 
specified criteria for new technology add-on payments for FY 2020, this 
proposal, if finalized, would increase IPPS spending by approximately 
$110 million in FY 2020.
     Proposed Changes to Address Wage Index Disparities Between 
High and Low Wage Index Hospitals. As discussed in section III.N. of 
the preamble of this proposed rule, to help mitigate wage index 
disparities, including those resulting from the inclusion of hospitals 
with rural reclassifications under 42 CFR 412.103 in the rural floor, 
we are proposing to reduce the disparity between high and low wage 
index hospitals by increasing the wage index values for certain 
hospitals with low wage index values and decreasing the wage index 
values of certain hospitals with high wage index values for budget 
neutrality purposes, as well as changing the calculation of the rural 
floor. We also are proposing a transition for hospitals experiencing 
significant decreases in their wage index values as a result of these 
proposed changes. We are proposing to make these changes in a budget 
neutral manner.
    We are proposing to apply a budget neutrality adjustment to the 
standardized amount so that our proposed transition for hospitals that 
could be negatively impacted is implemented in a budget neutral manner.
     Proposed Medicare DSH Payment Adjustment and Additional 
Payment for Uncompensated Care. For FY 2020, we are proposing to update 
our estimates of the three factors used to determine uncompensated care 
payments. We are proposing to continue to use uninsured estimates 
produced by OACT as part of the development of the NHEA in the 
calculation of Factor 2. We also are proposing to use a single year of 
data on uncompensated care costs from Worksheet S-10 for FY 2015 to 
determine Factor 3 for FY 2020. In addition, we are seeking public 
comments on whether we should, due to changes in the reporting 
instructions that became effective for FY 2017, alternatively use a 
single year of Worksheet S-10 data from the FY 2017 cost reports, 
instead of the FY 2015 Worksheet S-10 data, to calculate Factor 3 for 
FY 2020. To determine the amount of uncompensated care for purposes of 
calculating Factor 3 for Puerto Rico hospitals and Indian Health 
Service and Tribal hospitals, we are proposing to continue to use only 
data regarding low-income insured days for FY 2013.
    We project that the amount available to distribute as payments for 
uncompensated care for FY 2020 would increase by approximately $216 
million, as compared to our estimate of the uncompensated care payments 
that will be distributed in FY 2019. The payments have redistributive 
effects, based on a hospital's uncompensated care amount relative to 
the uncompensated care amount for all hospitals that are projected to 
be eligible to receive Medicare DSH payments, and the calculated 
payment amount is not directly tied to a hospital's number of 
discharges.

[[Page 19166]]

     Proposed Update to the LTCH PPS Payment Rates 
and Other Payment Policies. Based on the best available data for the 
384 LTCHs in our database, we estimate that the proposed changes to the 
payment rates and factors that we present in the preamble of and 
Addendum to this proposed rule, which reflect the end of the transition 
of the statutory application of the site neutral payment rate and the 
proposed update to the LTCH PPS standard Federal payment rate for FY 
2020, would result in an estimated increase in payments in FY 2020 of 
approximately $37 million.
     Proposed Changes to the Hospital Readmissions Reduction 
Program. For FY 2020 and subsequent years, the reduction is based on a 
hospital's risk-adjusted readmission rate during a 3-year period for 
acute myocardial infarction (AMI), heart failure (HF), pneumonia, 
chronic obstructive pulmonary disease (COPD), elective primary total 
hip arthroplasty/total knee arthroplasty (THA/TKA), and coronary artery 
bypass graft (CABG) surgery. Overall, in this proposed rule, we 
estimate that 2,599 hospitals would have their base operating DRG 
payments reduced by their determined proxy FY 2020 hospital-specific 
readmission adjustment. As a result, we estimate that the Hospital 
Readmissions Reduction Program would save approximately $550 million in 
FY 2020.
     Value-Based Incentive Payments Under the Hospital VBP 
Program. We estimate that there would be no net financial impact to the 
Hospital VBP Program for the FY 2020 program year in the aggregate 
because, by law, the amount available for value-based incentive 
payments under the program in a given year must be equal to the total 
amount of base operating MS-DRG payment amount reductions for that 
year, as estimated by the Secretary. The estimated amount of base 
operating MS-DRG payment amount reductions for the FY 2020 program year 
and, therefore, the estimated amount available for value-based 
incentive payments for FY 2020 discharges is approximately $1.9 
billion.
     Proposed Changes to the HAC Reduction Program. A 
hospital's Total HAC score and its ranking in comparison to other 
hospitals in any given year depend on several different factors. The FY 
2020 program year is the first year in which we will implement our 
equal measure weights scoring methodology. Any significant impact due 
to the HAC Reduction Program proposed changes for FY 2020, including 
which hospitals will receive the adjustment, would depend on the actual 
experience of hospitals in the Program. We also are proposing to update 
the hourly wage rate associated with burden for CDC NHSN HAI validation 
under the HAC Reduction Program.
     Proposed Changes to the Hospital Inpatient Quality 
Reporting (IQR) Program. Across 3,300 IPPS hospitals, we estimate that 
our proposed changes for the Hospital IQR Program in this proposed rule 
would result in changes to the information collection burden compared 
to previously adopted requirements. The only proposal that would affect 
the information collection burden for the Hospital IQR Program is the 
proposal to adopt the Hybrid Hospital-Wide All-Cause Readmission 
(Hybrid HWR) measure (NQF #2879) in a stepwise fashion, beginning with 
two voluntary reporting periods which would run from July 1, 2021 
through June 30, 2022, and from July 1, 2022 through June 30, 2023, 
before requiring reporting of the measure for the reporting period that 
would run from July 1, 2023 through June 30, 2024, impacting the FY 
2026 payment determination and for subsequent years. We estimate that 
the impact of this proposed change is a total collection of information 
burden increase of 2,211 hours and a total cost increase of 
approximately $83,266 for all participating IPPS hospitals annually.
     Proposed Changes to the Medicare and Medicaid Promoting 
Interoperability Programs. We believe that, overall, the proposals in 
this proposed rule would reduce burden, as described in detail in 
section X.B.9. of the preamble and Appendix A, section I.N. of this 
proposed rule.

B. Background 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 use a prospective payment system (PPS) to pay for the 
capital-related costs of inpatient hospital services for these 
``subsection (d) hospitals.'' 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. 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 certain 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 varies based on the 
outcome of the statutory calculations. The Affordable Care Act revised 
the Medicare DSH payment methodology and provides for a new additional 
Medicare payment beginning on October 1, 2013, that considers the 
amount of uncompensated care furnished by the hospital relative to all 
other qualifying hospitals.
    If the hospital is training residents in an approved residency 
program(s), 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 or medical services that have been approved for special 
add-on payments. To qualify, a new technology or medical service must 
demonstrate that it is a substantial clinical improvement over 
technologies or services 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 eligible outlier payment is added to the DRG-adjusted base payment 
rate, plus any DSH, IME, and new technology or medical service 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 in whole or in part based on their hospital-specific rate, which 
is determined from their costs in a base year. For example, sole 
community hospitals (SCHs)

[[Page 19167]]

receive the higher of a hospital-specific rate based on their costs in 
a base year (the highest of FY 1982, FY 1987, FY 1996, or FY 2006) or 
the IPPS Federal rate based on the standardized amount. SCHs are the 
sole source of care in their areas. Specifically, section 
1886(d)(5)(D)(iii) of the Act defines an SCH as a hospital that is 
located more than 35 road miles from another hospital or that, by 
reason of factors such as an isolated location, weather conditions, 
travel conditions, or absence of other like hospitals (as determined by 
the Secretary), is the sole source of hospital inpatient services 
reasonably available to Medicare beneficiaries. In addition, certain 
rural hospitals previously designated by the Secretary as essential 
access community hospitals are considered SCHs.
    Under current law, the Medicare-dependent, small rural hospital 
(MDH) program is effective through FY 2022. Through and including FY 
2006, an MDH received the higher of the Federal rate or the Federal 
rate plus 50 percent of the amount by which the Federal rate was 
exceeded by the higher of its FY 1982 or FY 1987 hospital-specific 
rate. For discharges occurring on or after October 1, 2007, but before 
October 1, 2022, an MDH receives the higher of the Federal rate or the 
Federal rate plus 75 percent of the amount by which the Federal rate is 
exceeded by the highest of its FY 1982, FY 1987, or FY 2002 hospital-
specific rate. MDHs are a major source of care for Medicare 
beneficiaries in their areas. Section 1886(d)(5)(G)(iv) of the Act 
defines an MDH as a hospital that is located in a rural area (or, as 
amended by the Bipartisan Budget Act of 2018, a hospital located in a 
State with no rural area that meets certain statutory criteria), has 
not more than 100 beds, is not an SCH, and has a high percentage of 
Medicare discharges (not less than 60 percent of its inpatient days or 
discharges in its cost reporting year beginning in FY 1987 or in two of 
its three most recently settled Medicare cost reporting years).
    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 
IPPS, payments are adjusted by the same DRG for the case as they are 
under the operating IPPS. Capital IPPS payments are also adjusted for 
IME and DSH, similar to the adjustments made under the operating IPPS. 
In addition, hospitals may receive outlier payments 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 
hospitals and hospital units are excluded from the IPPS. These 
hospitals and units are: Inpatient rehabilitation facility (IRF) 
hospitals and units; long-term care hospitals (LTCHs); psychiatric 
hospitals and units; children's hospitals; cancer hospitals; extended 
neoplastic disease care hospitals, and hospitals located outside the 50 
States, the District of Columbia, and Puerto Rico (that is, hospitals 
located in the U.S. Virgin Islands, Guam, the Northern Mariana Islands, 
and American Samoa). Religious nonmedical health care institutions 
(RNHCIs) are also excluded from the IPPS. Various sections of the 
Balanced Budget Act of 1997 (BBA, Pub. L. 105-33), the Medicare, 
Medicaid and SCHIP [State Children's Health Insurance Program] Balanced 
Budget Refinement Act of 1999 (BBRA, Pub. L. 106-113), and the 
Medicare, Medicaid, and SCHIP Benefits Improvement and Protection Act 
of 2000 (BIPA, Pub. L. 106-554) provide for the implementation of PPSs 
for IRF hospitals and units, LTCHs, and psychiatric hospitals and units 
(referred to as inpatient psychiatric facilities (IPFs)). (We note that 
the annual updates to the LTCH PPS are included along with the IPPS 
annual update in this document. Updates to the IRF PPS and IPF PPS are 
issued as separate documents.) Children's hospitals, cancer hospitals, 
hospitals located outside the 50 States, the District of Columbia, and 
Puerto Rico (that is, hospitals located in the U.S. Virgin Islands, 
Guam, the Northern Mariana Islands, and American Samoa), and RNHCIs 
continue to be paid solely under a reasonable cost-based system, 
subject to a rate-of-increase ceiling on inpatient operating costs. 
Similarly, extended neoplastic disease care hospitals are paid on a 
reasonable cost basis, subject to a rate-of-increase ceiling on 
inpatient operating costs.
    The existing regulations governing payments to excluded hospitals 
and hospital units are located in 42 CFR parts 412 and 413.
3. Long-Term Care Hospital Prospective Payment System (LTCH PPS)
    The Medicare prospective payment system (PPS) for LTCHs applies to 
hospitals described in section 1886(d)(1)(B)(iv) of the Act, effective 
for cost reporting periods beginning on or after October 1, 2002. The 
LTCH PPS was established under the authority of sections 123 of the 
BBRA and section 307(b) of the BIPA (as codified under section 
1886(m)(1) of the Act). During the 5-year (optional) transition period, 
a LTCH's payment under the PPS was based on an increasing proportion of 
the LTCH Federal rate with a corresponding decreasing proportion based 
on reasonable cost principles. Effective for cost reporting periods 
beginning on or after October 1, 2006 through September 30, 2015 all 
LTCHs were paid 100 percent of the Federal rate. Section 1206(a) of the 
Pathway for SGR Reform Act of 2013 (Pub. L. 113-67) established the 
site neutral payment rate under the LTCH PPS, which made the LTCH PPS a 
dual rate payment system beginning in FY 2016. Under this statute, 
based on a rolling effective date that is linked to the date on which a 
given LTCH's Federal FY 2016 cost reporting period begins, LTCHs are 
generally paid for discharges at the site neutral payment rate unless 
the discharge meets the patient criteria for payment at the LTCH PPS 
standard Federal payment rate. The existing regulations governing 
payment under the LTCH PPS are located in 42 CFR part 412, subpart O. 
Beginning October 1, 2009, we issue the annual updates to the LTCH PPS 
in the same documents that update the IPPS (73 FR 26797 through 26798).
4. Critical Access Hospitals (CAHs)
    Under sections 1814(l), 1820, and 1834(g) of the Act, payments made 
to critical access hospitals (CAHs) (that is, rural hospitals or 
facilities that meet certain statutory requirements) for inpatient and 
outpatient services are generally based on 101 percent of reasonable 
cost. Reasonable cost is determined under the provisions of section 
1861(v) of the Act and existing regulations under 42 CFR part 413.
5. Payments for Graduate Medical Education (GME)
    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

[[Page 19168]]

various types of hospitals are located in 42 CFR part 413.

C. Summary of Provisions of Recent Legislation That Would Be 
Implemented in This Proposed Rule

1. Pathway for SGR Reform Act of 2013 (Pub. L. 113-67)
    The Pathway for SGR Reform Act of 2013 (Pub. L. 113-67) introduced 
new payment rules in the LTCH PPS. Under section 1206 of this law, 
discharges in cost reporting periods beginning on or after October 1, 
2015, under the LTCH PPS, receive payment under a site neutral rate 
unless the discharge meets certain patient-specific criteria. In this 
proposed rule, we are proposing to continue to update certain policies 
that implemented provisions under section 1206 of the Pathway for SGR 
Reform Act.
2. Improving Medicare Post-Acute Care Transformation Act of 2014 
(IMPACT Act) (Pub. L. 113-185)
    The Improving Medicare Post-Acute Care Transformation Act of 2014 
(IMPACT Act) (Pub. L. 113-185), enacted on October 6, 2014, made a 
number of changes that affect the Long-Term Care Hospital Quality 
Reporting Program (LTCH QRP). In this proposed rule, we are proposing 
to continue to implement portions of section 1899B of the Act, as added 
by section 2(a) of the IMPACT Act, which, in part, requires LTCHs, 
among other post-acute care providers, to report standardized patient 
assessment data, data on quality measures, and data on resource use and 
other measures.
3. The Medicare Access and CHIP Reauthorization Act of 2015 (Pub. L. 
114-10)
    Section 414 of the Medicare Access and CHIP Reauthorization Act of 
2015 (MACRA, Pub. L. 114-10) specifies a 0.5 percent positive 
adjustment to the standardized amount of Medicare payments to acute 
care hospitals for FYs 2018 through 2023. These adjustments follow the 
recoupment adjustment to the standardized amounts under section 1886(d) 
of the Act based upon the Secretary's estimates for discharges 
occurring from FYs 2014 through 2017 to fully offset $11 billion, in 
accordance with section 631 of the ATRA. The FY 2018 adjustment was 
subsequently adjusted to 0.4588 percent by section 15005 of the 21st 
Century Cures Act.
4. The 21st Century Cures Act (Pub. L. 114-255)
    The 21st Century Cures Act (Pub. L. 114-255), enacted on December 
13, 2016, contained the following provision affecting payments under 
the Hospital Readmissions Reduction Program, which we are proposing to 
continue to implement in this proposed rule:
     Section 15002, which amended section 1886(q)(3) of the Act 
by adding subparagraphs (D) and (E), which requires the Secretary to 
develop a methodology for calculating the excess readmissions 
adjustment factor for the Hospital Readmissions Reduction Program based 
on cohorts defined by the percentage of dual-eligible patients (that 
is, patients who are eligible for both Medicare and full-benefit 
Medicaid coverage) cared for by a hospital. In this proposed rule, we 
are proposing to continue to implement changes to the payment 
adjustment factor to assess penalties based on a hospital's 
performance, relative to other hospitals treating a similar proportion 
of dual-eligible patients.

D. Summary of the Provisions of This Proposed Rule

    In this proposed rule, we set forth proposed payment and policy 
changes to the Medicare IPPS for FY 2020 operating costs and capital-
related costs of acute care hospitals and certain hospitals and 
hospital units that are excluded from IPPS. In addition, we set forth 
proposed changes to the payment rates, factors, and other payment and 
policy-related changes to programs associated with payment rate 
policies under the LTCH PPS for FY 2020.
    Below is a general summary of the changes that we are proposing to 
make in this proposed rule.
1. Proposed Changes to MS-DRG Classifications and Recalibrations of 
Relative Weights
    In section II. of the preamble of this proposed rule, we include--
     Proposed changes to MS-DRG classifications based on our 
yearly review for FY 2020.
     Proposed adjustment to the standardized amounts under 
section 1886(d) of the Act for FY 2020 in accordance with the 
amendments made to section 7(b)(1)(B) of Public Law 110-90 by section 
414 of the MACRA.
     Proposed recalibration of the MS-DRG relative weights.
     A discussion of the proposed FY 2020 status of new 
technologies approved for add-on payments for FY 2019 and a 
presentation of our evaluation and analysis of the FY 2020 applicants 
for add-on payments for high-cost new medical services and technologies 
(including public input, as directed by Pub. L. 108-173, obtained in a 
town hall meeting).
     A request for public comments on the substantial clinical 
improvement criterion used to evaluate applications for both the IPPS 
new technology add-on payments and the OPPS transitional pass-through 
payment for devices, and a discussion of potential revisions that we 
are considering adopting as final policies related to the substantial 
clinical improvement criterion for applications received beginning in 
FY 2020 for the IPPS (that is, for FY 2021 and later new technology 
add-on payments) and beginning in CY 2020 for the OPPS.
     A proposed alternative IPPS new technology add-on payment 
pathway for certain transformative new devices.
     Proposed changes to the calculation of the IPPS new 
technology add-on payment.
2. Proposed Changes to the Hospital Wage Index for Acute Care Hospitals
    In section III. of the preamble to this proposed rule, we are 
proposing to make revisions to the wage index for acute care hospitals 
and the annual update of the wage data. Specific issues addressed 
include, but are not limited to, the following:
     The proposed FY 2020 wage index update using wage data 
from cost reporting periods beginning in FY 2016.
     Proposals to address wage index disparities between high 
and low wage index hospitals.
     Calculation, analysis, and implementation of the proposed 
occupational mix adjustment to the wage index for acute care hospitals 
for FY 2020 based on the 2016 Occupational Mix Survey.
     Proposed application of the rural floor and the frontier 
State floor.
     Proposed revisions to the wage index for acute care 
hospitals, based on hospital redesignations and reclassifications under 
sections 1886(d)(8)(B), (d)(8)(E), and (d)(10) of the Act.
     Proposed change to Lugar county assignments.
     Proposed adjustment to the wage index for acute care 
hospitals for FY 2020 based on commuting patterns of hospital employees 
who reside in a county and work in a different area with a higher wage 
index.
     Proposed labor-related share for the proposed FY 2020 wage 
index.
3. Other Decisions and Proposed Changes to the IPPS for Operating Costs
    In section IV. of the preamble of this proposed rule, we discuss 
proposed changes or clarifications of a number of the provisions of the 
regulations in 42

[[Page 19169]]

CFR parts 412 and 413, including the following:
     Proposed changes to MS-DRGs subject to the postacute care 
transfer policy and special payment policy.
     Proposed changes to the inpatient hospital update for FY 
2020.
     Proposed conforming changes to the regulations for the 
low-volume hospital payment adjustment policy.
     Proposed updated national and regional case-mix values and 
discharges for purposes of determining RRC status.
     The statutorily required IME adjustment factor for FY 
2020.
     Proposed changes to the methodologies for determining 
Medicare DSH payments and the additional payments for uncompensated 
care.
     A request for public comments on PRRB appeals related to a 
hospital's Medicaid fraction in the DSH payment adjustment calculation.
     Proposed changes to the policies for payment adjustments 
under the Hospital Readmissions Reduction Program based on hospital 
readmission measures and the process for hospital review and correction 
of those rates for FY 2020.
     Proposed changes to the requirements and provision of 
value-based incentive payments under the Hospital Value-Based 
Purchasing Program.
     Proposed requirements for payment adjustments to hospitals 
under the HAC Reduction Program for FY 2020.
     Proposed changes related to CAHs as nonproviders for 
direct GME and IME payment purposes.
     Discussion of and proposals relating to the implementation 
of the Rural Community Hospital Demonstration Program in FY 2020.
4. Proposed FY 2020 Policy Governing the IPPS for Capital-Related Costs
    In section V. of the preamble to this proposed rule, we discuss the 
proposed payment policy requirements for capital-related costs and 
capital payments to hospitals for FY 2020.
5. Proposed Changes to the Payment Rates for Certain Excluded 
Hospitals: Rate-of-Increase Percentages
    In section VI. of the preamble of this proposed rule, we discuss--
     Proposed changes to payments to certain excluded hospitals 
for FY 2020.
     Proposed change related to CAH payment for ambulance 
services.
     Proposed continued implementation of the Frontier 
Community Health Integration Project (FCHIP) Demonstration.
6. Proposed Changes to the LTCH PPS
    In section VII. of the preamble of this proposed rule, we set 
forth--
     Proposed changes to the LTCH PPS Federal payment rates, 
factors, and other payment rate policies under the LTCH PPS for FY 
2020.
     Proposed payment adjustment for discharges of LTCHs that 
do not meet the applicable discharge payment percentage.
7. Proposed Changes Relating to Quality Data Reporting for Specific 
Providers and Suppliers
    In section VIII. of the preamble of this proposed rule, we 
address--
     Proposed requirements for the Hospital Inpatient Quality 
Reporting (IQR) Program.
     Proposed changes to the requirements for the quality 
reporting program for PPS-exempt cancer hospitals (PCHQR Program).
     Proposed changes to the requirements under the LTCH 
Quality Reporting Program (LTCH QRP).
     Proposed changes to requirements pertaining to eligible 
hospitals and CAHs participating in the Medicare and Medicaid Promoting 
Interoperability Programs.
8. Provider Reimbursement Review Board Appeals
    In section XI. of the preamble of this proposed rule, we discuss 
the growing number of Provider Reimbursement Review Board appeals made 
by providers and the action initiatives that are being implemented with 
the goal to: decrease the number of appeals submitted; decrease the 
number of appeals in inventory; reduce the time to resolution; and 
increase customer satisfaction.
9. Determining Prospective Payment Operating and Capital Rates and 
Rate-of-Increase Limits for Acute Care Hospitals
    In sections II. and III. of the Addendum to this proposed rule, we 
set forth the proposed changes to the amounts and factors for 
determining the proposed FY 2020 prospective payment rates for 
operating costs and capital-related costs for acute care hospitals. We 
are proposing to establish the threshold amounts for outlier cases, 
including a proposed change to the methodology for calculating those 
threshold amounts for FY 2020 to incorporate a projection of outlier 
payment reconciliations. In addition, in section IV. of the Addendum to 
this proposed rule, we address the update factors for determining the 
rate-of-increase limits for cost reporting periods beginning in FY 2020 
for certain hospitals excluded from the IPPS.
10. Determining Prospective Payment Rates for LTCHs
    In section V. of the Addendum to this proposed rule, we set forth 
proposed changes to the amounts and factors for determining the 
proposed FY 2020 LTCH PPS standard Federal payment rate and other 
factors used to determine LTCH PPS payments under both the LTCH PPS 
standard Federal payment rate and the site neutral payment rate in FY 
2020. We are proposing to establish the adjustments for wage levels, 
the labor-related share, the cost-of-living adjustment, and high-cost 
outliers, including the applicable fixed-loss amounts and the LTCH 
cost-to-charge ratios (CCRs) for both payment rates.
11. Impact Analysis
    In Appendix A of this proposed rule, we set forth an analysis of 
the impact the proposed changes would have on affected acute care 
hospitals, CAHs, LTCHs, and PCHs.
12. Recommendation of Update Factors for Operating Cost Rates of 
Payment for Hospital Inpatient Services
    In Appendix B of this proposed rule, as required by sections 
1886(e)(4) and (e)(5) of the Act, we provide our recommendations of the 
appropriate percentage changes for FY 2020 for the following:
     A single average standardized amount for all areas for 
hospital inpatient services paid under the IPPS for operating costs of 
acute care hospitals (and hospital-specific rates applicable to SCHs 
and MDHs).
     Target rate-of-increase limits to the allowable operating 
costs of hospital inpatient services furnished by certain hospitals 
excluded from the IPPS.
     The LTCH PPS standard Federal payment rate and the site 
neutral payment rate for hospital inpatient services provided for LTCH 
PPS discharges.
13. Discussion of Medicare Payment Advisory Commission Recommendations
    Under section 1805(b) of the Act, MedPAC is required to submit a 
report to Congress, no later than March 15 of each year, in which 
MedPAC reviews and makes recommendations on Medicare payment policies. 
MedPAC's March 2019 recommendations concerning hospital inpatient 
payment policies addressed the update factor for hospital inpatient 
operating costs and capital-related costs for hospitals under the IPPS. 
We address these

[[Page 19170]]

recommendations in Appendix B of this proposed rule. For further 
information relating specifically to the MedPAC March 2019 report or to 
obtain a copy of the report, contact MedPAC at (202) 220-3700 or visit 
MedPAC's website at: http://www.medpac.gov.

E. Advancing Health Information Exchange

    The Department of Health and Human Services (HHS) has a number of 
initiatives designed to encourage and support the adoption of 
interoperable health information technology and to promote nationwide 
health information exchange to improve health care. The Office of the 
National Coordinator for Health Information Technology (ONC) and CMS 
work collaboratively to advance interoperability across settings of 
care, including post-acute care.
    To further interoperability in post-acute care, we developed a Data 
Element Library (DEL) to serve as a publicly available centralized, 
authoritative resource for standardized data elements and their 
associated mappings to health IT standards. The DEL furthers CMS' goal 
of data standardization and interoperability, which is also a goal of 
the IMPACT Act. These interoperable data elements can reduce provider 
burden by allowing the use and exchange of health care data, support 
provider exchange of electronic health information for care 
coordination, person-centered care, and support real-time, data driven, 
clinical decision making. Standards in the Data Element Library 
(https://del.cms.gov/) can be referenced on the CMS website and in the 
ONC Interoperability Standards Advisory (ISA). The 2019 ISA is 
available at: https://www.healthit.gov/isa.
    The 21st Century Cures Act (the Cures Act) (Pub. L. 114-255, 
enacted December 13, 2016) requires HHS to take new steps to enable the 
electronic sharing of health information ensuring interoperability for 
providers and settings across the care continuum. In an important 
provision, Congress defined ``information blocking'' as practices 
likely to interfere with, prevent, or materially discourage access, 
exchange, or use of electronic health information, and established new 
authority for HHS to discourage these practices. In March 2019, ONC and 
CMS published the proposed rules, ``21st Century Cures Act: 
Interoperability, Information Blocking, and the ONC Health IT 
Certification Program'' (84 FR 7424 through 7610) and 
``Interoperability and Patient Access'' (84 FR 7610 through 7680), to 
promote secure and more immediate access to health information for 
patients and health care providers through the implementation of 
information blocking provisions of the Cures Act and the use of 
standardized application programming interfaces (APIs) that enable 
easier access to electronic health information. These two proposed 
rules are open for public comments at: www.regulations.gov.
    We invite providers to learn more about these important 
developments and how they are likely to affect hospitals paid under the 
IPPS and the LTCH PPS.

II. Proposed Changes to Medicare Severity Diagnosis-Related Group (MS-
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 diagnosis-related 
groups (DRGs)) for inpatient discharges and adjust payments under the 
IPPS based on appropriate weighting factors assigned to each DRG. 
Therefore, under the IPPS, Medicare pays 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 resources used to treat cases in all DRGs.
    Section 1886(d)(4)(C) of the Act requires that the Secretary adjust 
the DRG classifications and relative weights at least annually to 
account for changes in resource consumption. These adjustments are made 
to reflect changes in treatment patterns, technology, and any other 
factors that may change the relative use of hospital resources.

B. MS-DRG Reclassifications

    For general information about the MS-DRG system, including yearly 
reviews and changes to the MS-DRGs, we refer readers to the previous 
discussions in the FY 2010 IPPS/RY 2010 LTCH PPS final rule (74 FR 
43764 through 43766) and the FYs 2011 through 2019 IPPS/LTCH PPS final 
rules (75 FR 50053 through 50055; 76 FR 51485 through 51487; 77 FR 
53273; 78 FR 50512; 79 FR 49871; 80 FR 49342; 81 FR 56787 through 
56872; 82 FR 38010 through 38085, and 83 FR 41158 through 41258, 
respectively).

C. Adoption of the MS-DRGs in FY 2008

    For information on the adoption of the MS-DRGs in FY 2008, we refer 
readers to the FY 2008 IPPS final rule with comment period (72 FR 47140 
through 47189).

D. Proposed FY 2020 MS-DRG Documentation and Coding Adjustment

1. Background on the Prospective MS-DRG Documentation and Coding 
Adjustments for FY 2008 and FY 2009 Authorized by Public Law 110-90 and 
the Recoupment or Repayment Adjustment Authorized by Section 631 of the 
American Taxpayer Relief Act of 2012 (ATRA)
    In the FY 2008 IPPS final rule with comment period (72 FR 47140 
through 47189), we adopted the MS-DRG patient classification system for 
the IPPS, effective October 1, 2007, to better recognize severity of 
illness in Medicare payment rates for acute care hospitals. The 
adoption of the MS-DRG system resulted in the expansion of the number 
of DRGs from 538 in FY 2007 to 745 in FY 2008. By increasing the number 
of MS-DRGs and more fully taking into account patient severity of 
illness in Medicare payment rates for acute care hospitals, MS-DRGs 
encourage hospitals to improve their documentation and coding of 
patient diagnoses.
    In the FY 2008 IPPS final rule with comment period (72 FR 47175 
through 47186), we indicated that the adoption of the MS-DRGs had the 
potential to lead to increases in aggregate payments without a 
corresponding increase in actual patient severity of illness due to the 
incentives for additional documentation and coding. In that final rule 
with comment period, we exercised our authority under section 
1886(d)(3)(A)(vi) of the Act, which authorizes us to maintain budget 
neutrality by adjusting the national standardized amount, to eliminate 
the estimated effect of changes in coding or classification that do not 
reflect real changes in case-mix. Our actuaries estimated that 
maintaining budget neutrality required an adjustment of -4.8 percentage 
points to the national standardized amount. We provided for phasing in 
this -4.8 percentage point adjustment over 3 years. Specifically, we 
established prospective documentation and coding adjustments of -1.2 
percentage points for FY 2008, -1.8 percentage points for FY 2009, and 
-1.8 percentage points for FY 2010.
    On September 29, 2007, Congress enacted the TMA [Transitional 
Medical Assistance], Abstinence Education, and

[[Page 19171]]

QI [Qualifying Individuals] Programs Extension Act of 2007 (Pub. L. 
110-90). Section 7(a) of Public Law 110-90 reduced the documentation 
and coding adjustment made as a result of the MS-DRG system that we 
adopted in the FY 2008 IPPS final rule with comment period to -0.6 
percentage point for FY 2008 and -0.9 percentage point for FY 2009.
    As discussed in prior year rulemakings, and most recently in the FY 
2017 IPPS/LTCH PPS final rule (81 FR 56780 through 56782), we 
implemented a series of adjustments required under sections 7(b)(1)(A) 
and 7(b)(1)(B) of Public Law 110-90, based on a retrospective review of 
FY 2008 and FY 2009 claims data. We completed these adjustments in FY 
2013 but indicated in the FY 2013 IPPS/LTCH PPS final rule (77 FR 53274 
through 53275) that delaying full implementation of the adjustment 
required under section 7(b)(1)(A) of Public Law 110-90 until FY 2013 
resulted in payments in FY 2010 through FY 2012 being overstated, and 
that these overpayments could not be recovered under Public Law 110-90.
    In addition, as discussed in prior rulemakings and most recently in 
the FY 2018 IPPS/LTCH PPS final rule (82 FR 38008 through 38009), 
section 631 of the ATRA amended section 7(b)(1)(B) of Public Law 110-90 
to require the Secretary to make a recoupment adjustment or adjustments 
totaling $11 billion by FY 2017. This adjustment represented the amount 
of the increase in aggregate payments as a result of not completing the 
prospective adjustment authorized under section 7(b)(1)(A) of Public 
Law 110-90 until FY 2013.
2. Adjustments Made for FY 2018 and FY 2019 as Required Under Section 
414 of Public Law 114-10 (MACRA) and Section 15005 of Public Law 114-
255
    As stated in the FY 2017 IPPS/LTCH PPS final rule (81 FR 56785), 
once the recoupment required under section 631 of the ATRA was 
complete, we had anticipated making a single positive adjustment in FY 
2018 to offset the reductions required to recoup the $11 billion under 
section 631 of the ATRA. However, section 414 of the MACRA (which was 
enacted on April 16, 2015) replaced the single positive adjustment we 
intended to make in FY 2018 with a 0.5 percentage point positive 
adjustment for each of FYs 2018 through 2023. In the FY 2017 
rulemaking, we indicated that we would address the adjustments for FY 
2018 and later fiscal years in future rulemaking. Section 15005 of the 
21st Century Cures Act (Pub. L. 114-255), which was enacted on December 
13, 2016, amended section 7(b)(1)(B) of the TMA, as amended by section 
631 of the ATRA and section 414 of the MACRA, to reduce the adjustment 
for FY 2018 from a 0.5 percentage point positive adjustment to a 0.4588 
percentage point positive adjustment. As we discussed in the FY 2018 
rulemaking, we believe the directive under section 15005 of Public Law 
114-255 is clear. Therefore, in the FY 2018 IPPS/LTCH PPS final rule 
(82 FR 38009) for FY 2018, we implemented the required +0.4588 
percentage point adjustment to the standardized amount. In the FY 2019 
IPPS/LTCH PPS final rule (83 FR 41157), consistent with the 
requirements of section 414 of the MACRA, we implemented a 0.5 
percentage point positive adjustment to the standardized amount for FY 
2019. We indicated that both the FY 2018 and FY 2019 adjustments were 
permanent adjustments to payment rates. We also stated that we plan to 
propose future adjustments required under section 414 of the MACRA for 
FYs 2020 through 2023 in future rulemaking.
3. Proposed Adjustment for FY 2020
    Consistent with the requirements of section 414 of the MACRA, we 
are proposing to implement a 0.5 percentage point positive adjustment 
to the standardized amount for FY 2020. This would constitute a 
permanent adjustment to payment rates. We plan to propose future 
adjustments required under section 414 of the MACRA for FYs 2021 
through 2023 in future rulemaking.

E. Refinement of the MS-DRG Relative Weight Calculation

1. Background
    Beginning in FY 2007, we implemented relative weights for DRGs 
based on cost report data instead of charge information. We refer 
readers to the FY 2007 IPPS final rule (71 FR 47882) for a detailed 
discussion of our final policy for calculating the cost-based DRG 
relative weights and to the FY 2008 IPPS final rule with comment period 
(72 FR 47199) for information on how we blended relative weights based 
on the CMS DRGs and MS-DRGs. We also refer readers to the FY 2017 IPPS/
LTCH PPS final rule (81 FR 56785 through 56787) for a detailed 
discussion of the history of changes to the number of cost centers used 
in calculating the DRG relative weights. Since FY 2014, we have 
calculated the IPPS MS-DRG relative weights using 19 CCRs, which now 
include distinct CCRs for implantable devices, MRIs, CT scans, and 
cardiac catheterization.
2. Discussion of Policy for FY 2020
    Consistent with our established policy, we are calculating the 
proposed MS-DRG relative weights for FY 2020 using two data sources: 
The MedPAR file as the claims data source and the HCRIS as the cost 
report data source. We adjust the charges from the claims to costs by 
applying the 19 national average CCRs developed from the cost reports. 
The description of the calculation of the proposed 19 CCRs and the 
proposed MS-DRG relative weights for FY 2020 is included in section 
II.G. of the preamble to this FY 2020 IPPS/LTCH PPS proposed rule. As 
we did with the FY 2019 IPPS/LTCH PPS final rule, for this FY 2020 
proposed rule, we are providing the version of the HCRIS from which we 
calculated these proposed 19 CCRs on the CMS website at: http://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/AcuteInpatientPPS/index.html. Click on the link on the left side of the 
screen titled ``FY 2020 IPPS Proposed Rule Home Page'' or ``Acute 
Inpatient Files for Download.''

F. Proposed Changes to Specific MS-DRG Classifications

1. Discussion of Changes to Coding System and Basis for Proposed FY 
2020 MS-DRG Updates
a. Conversion of MS-DRGs to the International Classification of 
Diseases, 10th Revision (ICD-10)
    As of October 1, 2015, providers use the International 
Classification of Diseases, 10th Revision (ICD-10) coding system to 
report diagnoses and procedures for Medicare hospital inpatient 
services under the MS-DRG system instead of the ICD-9-CM coding system, 
which was used through September 30, 2015. The ICD-10 coding system 
includes the International Classification of Diseases, 10th Revision, 
Clinical Modification (ICD-10-CM) for diagnosis coding and the 
International Classification of Diseases, 10th Revision, Procedure 
Coding System (ICD-10-PCS) for inpatient hospital procedure coding, as 
well as the ICD-10-CM and ICD-10-PCS Official Guidelines for Coding and 
Reporting. For a detailed discussion of the conversion of the MS-DRGs 
to ICD-10, we refer readers to the FY 2017 IPPS/LTCH PPS final rule (81 
FR 56787 through 56789).
b. Basis for Proposed FY 2020 MS-DRG Updates
    CMS has previously encouraged input from our stakeholders 
concerning the annual IPPS updates when that input was made available 
to us by December

[[Page 19172]]

7 of the year prior to the next annual proposed rule update. As 
discussed in the FY 2018 IPPS/LTCH PPS final rule (82 FR 38010), as we 
work with the public to examine the ICD-10 claims data used for updates 
to the ICD-10 MS DRGs, we would like to examine areas where the MS-DRGs 
can be improved, which will require additional time for us to review 
requests from the public to make specific updates, analyze claims data, 
and consider any proposed updates. Given the need for more time to 
carefully evaluate requests and propose updates, we changed the 
deadline to request updates to the MS-DRGs to November 1 of each year. 
This will provide an additional 5 weeks for the data analysis and 
review process. Interested parties had to submit any comments and 
suggestions for FY 2020 by November 1, 2018, and should submit any 
comments and suggestions for FY 2021 by November 1, 2019 via the CMS 
MS-DRG Classification Change Request Mailbox located at: 
[email protected]. The comments that were submitted 
in a timely manner for FY 2020 are discussed in this section of the 
preamble of this proposed rule. As we discuss in the sections that 
follow, we may not be able to fully consider all of the requests that 
we receive for the upcoming fiscal year. We have found that, with the 
implementation of ICD-10, some types of requested changes to the MS-DRG 
classifications require more extensive research to identify and analyze 
all of the data that are relevant to evaluating the potential change. 
We note in the discussion that follows those topics for which further 
research and analysis are required, and which we will continue to 
consider in connection with future rulemaking.
    Following are the changes that we are proposing to the MS-DRGs for 
FY 2020. We are inviting public comments on each of the MS-DRG 
classification proposed changes, as well as our proposals to maintain 
certain existing MS-DRG classifications discussed in this proposed 
rule. In some cases, we are proposing changes to the MS-DRG 
classifications based on our analysis of claims data and consultation 
with our clinical advisors. In other cases, we are proposing to 
maintain the existing MS-DRG classifications based on our analysis of 
claims data and consultation with our clinical advisors. For this FY 
2020 IPPS/LTCH PPS proposed rule, our MS-DRG analysis was based on ICD-
10 claims data from the September 2018 update of the FY 2018 MedPAR 
file, which contains hospital bills received through September 30, 
2018, for discharges occurring through September 30, 2018. In our 
discussion of the proposed MS-DRG reclassification changes, we refer to 
these claims data as the ``September 2018 update of the FY 2018 MedPAR 
file.''
    As explained in previous rulemaking (76 FR 51487), in deciding 
whether to propose to make further modifications to the MS-DRGs for 
particular circumstances brought to our attention, we consider whether 
the resource consumption and clinical characteristics of the patients 
with a given set of conditions are significantly different than the 
remaining patients represented in the MS-DRG. We evaluate patient care 
costs using average costs and lengths of stay and rely on the judgment 
of our clinical advisors to determine whether patients are clinically 
distinct or similar to other patients represented in the MS-DRG. In 
evaluating resource costs, we consider both the absolute and percentage 
differences in average costs between the cases we select for review and 
the remainder of cases in the MS-DRG. We also consider variation in 
costs within these groups; that is, whether observed average 
differences are consistent across patients or attributable to cases 
that are extreme in terms of costs or length of stay, or both. Further, 
we consider the number of patients who will have a given set of 
characteristics and generally prefer not to create a new MS-DRG unless 
it would include a substantial number of cases.
    In our examination of the claims data, we apply the following 
criteria established in FY 2008 (72 FR 47169) to determine if the 
creation of a new complication or comorbidity (CC) or major 
complication or comorbidity (MCC) subgroup within a base MS-DRG is 
warranted:
     A reduction in variance of costs of at least 3 percent;
     At least 5 percent of the patients in the MS-DRG fall 
within the CC or MCC subgroup;
     At least 500 cases are in the CC or MCC subgroup;
     There is at least a 20-percent difference in average costs 
between subgroups; and
     There is a $2,000 difference in average costs between 
subgroups.
    In order to warrant creation of a CC or MCC subgroup within a base 
MS-DRG, the subgroup must meet all five of the criteria.
2. Pre-MDC
a. Peripheral ECMO
    In the FY 2019 IPPS/LTCH PPS final rule (83 FR 41166 through 
41169), we discussed a request we received to review cases reporting 
the use of extracorporeal membrane oxygenation (ECMO) in combination 
with the insertion of a percutaneous short-term external heart assist 
device. We also noted that a separate request to create a new ICD-10-
PCS procedure code specifically for percutaneous ECMO was discussed at 
the March 6-7, 2018 ICD-10 Coordination and Maintenance Committee 
Meeting for which we finalized the creation of three new procedure 
codes to identify and describe different types of ECMO treatments 
currently being utilized. These three new procedure codes were included 
in the FY 2019 ICD-10-PCS procedure codes files (which are available 
via the internet on the CMS website at: https://www.cms.gov/Medicare/Coding/ICD10/2019-ICD-10-PCS.html) and were made publicly available in 
May 2018. We received recommendations from commenters on suggested MS-
DRG assignments for the two new procedure codes that uniquely identify 
percutaneous (peripheral) ECMO, including assignment to MS-DRG 215 
(Other Heart Assist System Implant), or to Pre-MDC MS-DRG 004 
(Tracheostomy with Mechanical Ventilation >96 Hours or Principal 
Diagnosis Except Face, Mouth and Neck without Major O.R. Procedure) 
specifically for the new procedure code describing percutaneous veno-
venous (VV) ECMO or an alternate MS-DRG within MDC 4 (Diseases and 
Disorders of the Respiratory System). In our response, we noted that 
because these codes were not finalized at the time of the proposed 
rule, there were no proposed MDC or MS-DRG assignments or O.R. and non-
O.R. designations for these new procedure codes and they were not 
reflected in Table 6B.--New Procedure Codes (which is available via the 
internet on the CMS website at: http://www.cms.hhs.gov/Medicare/Medicare-Fee-for-Service-Payment/AcuteInpatientPPS/index.html) 
associated with the FY 2019 IPPS/LTCH PPS proposed rule.
    We further noted that, consistent with our annual process of 
assigning new procedure codes to MDCs and MS-DRGs, and designating a 
procedure as an O.R. or non-O.R. procedure, we reviewed the predecessor 
procedure code assignment. For the reasons discussed in the FY 2019 
IPPS/LTCH PPS final rule, our clinical advisors did not support 
assigning the new procedure codes for the percutaneous (peripheral) 
ECMO procedures to the same MS-DRG as the predecessor code for open 
(central) ECMO in pre-MDC MS-DRG 003.

[[Page 19173]]

    Effective with discharges occurring on and after October 1, 2018, 
the three ECMO procedure codes and their corresponding MS-DRG 
assignments are as shown in the following table.

----------------------------------------------------------------------------------------------------------------
       ICD-10-PCS code            Code description                 MS-DRG                 MS-DRG description
----------------------------------------------------------------------------------------------------------------
5A1522F......................  Extracorporeal          Pre-MDC......................  ECMO or Tracheostomy with
                                Oxygenation,           MS-DRG 003...................   Mechanical Ventilation
                                Membrane, Central.                                     >96 Hours or Principal
                                                                                       Diagnosis Except Face,
                                                                                       Mouth and Neck with Major
                                                                                       O.R. Procedure.
5A1522G......................  Extracorporeal          MS-DRG 207...................  Respiratory System
                                Oxygenation,                                           Diagnosis with Ventilator
                                Membrane, Peripheral                                   Support >96 Hours or
                                Veno-arterial.                                         Peripheral Extracorporeal
                                                                                       Membrane Oxygenation
                                                                                       (ECMO).
                                                       MS-DRG 291...................  Heart Failure and Shock
                                                                                       with MCC or Peripheral
                                                                                       Extracorporeal Membrane
                                                                                       Oxygenation (ECMO).
                                                       MS-DRG 296...................  Cardiac Arrest,
                                                                                       Unexplained with MCC or
                                                                                       Peripheral Extracorporeal
                                                                                       Membrane Oxygenation
                                                                                       (ECMO).
                                                       MS-DRG 870...................  Septicemia Or Severe
                                                                                       Sepsis with Mechanical
                                                                                       Ventilation >96 Hours Or
                                                                                       Peripheral Extracorporeal
                                                                                       Membrane Oxygenation
                                                                                       (ECMO).
5A1522H......................  Extracorporeal          MS-DRG 207...................  Respiratory System
                                Oxygenation,                                           Diagnosis with Ventilator
                                Membrane, Peripheral                                   Support >96 Hours or
                                Veno-venous.                                           Peripheral Extracorporeal
                                                                                       Membrane Oxygenation
                                                                                       (ECMO).
                                                       MS-DRG 291...................  Heart Failure and Shock
                                                                                       with MCC or Peripheral
                                                                                       Extracorporeal Membrane
                                                                                       Oxygenation (ECMO).
                                                       MS-DRG 296...................  Cardiac Arrest,
                                                                                       Unexplained with MCC or
                                                                                       Peripheral Extracorporeal
                                                                                       Membrane Oxygenation
                                                                                       (ECMO).
                                                       MS-DRG 870...................  Septicemia Or Severe
                                                                                       Sepsis with Mechanical
                                                                                       Ventilation >96 Hours Or
                                                                                       Peripheral Extracorporeal
                                                                                       Membrane Oxygenation
                                                                                       (ECMO).
----------------------------------------------------------------------------------------------------------------

    After publication of the FY 2019 IPPS/LTCH PPS final rule, we 
received comments and feedback from stakeholders expressing concern 
with the MS-DRG assignments for the two new procedure codes describing 
peripheral ECMO. Specifically, these stakeholders stated that: (1) The 
MS-DRG assignments for ECMO should not be based on how the patient is 
cannulated (open versus peripheral) because most of the costs for both 
central and peripheral ECMO can be attributed to the severity of 
illness of the patient; (2) there was a lack of opportunity for public 
comment on the finalized MS-DRG assignments; (3) patient access to ECMO 
treatment and programs is now at risk because of inadequate payment; 
and (4) CMS did not appear to have access to enough patient data to 
evaluate for appropriate MS-DRG assignment consideration. They also 
stated that the new procedure codes do not account for an open cut-down 
approach that may be performed on a peripheral vessel during a 
peripheral ECMO procedure. These stakeholders recommended that, 
consistent with the usual process of assigning new procedure codes to 
the same MS-DRG as the predecessor code, the MS-DRG assignment for 
peripheral ECMO procedures should be revised to allow assignment of 
peripheral ECMO procedures to Pre-MDC MS-DRG 003 (ECMO or Tracheostomy 
with Mechanical Ventilation >96 Hours or Principal Diagnosis Except 
Face, Mouth and Neck with Major O.R. Procedure). They stated that this 
revision would also allow for the collection of further claims data for 
patients treated with ECMO and assist in determining the 
appropriateness of any future modifications in MS-DRG assignment.
    We also received feedback from a few stakeholders that, for some 
cases involving peripheral ECMO, the current designation provides 
compensation that these stakeholders believe is ``reasonable'' (for 
example, for peripheral ECMO in certain patients admitted with acute 
respiratory failure and sepsis). Some of these stakeholders agreed with 
CMS that once claims data become available, the volume, length of stay 
and cost data of claims with these new codes can be examined to 
determine if modifications to MS-DRG assignment or O.R. and non-O.R. 
designation are warranted. However, some of these stakeholders also 
expressed concerns that the current assignments and designation do not 
appropriately compensate for the resources used when peripheral ECMO is 
used to treat certain patients (for example, patients who are admitted 
with cardiac arrest and cardiogenic shock of known cause or patients 
admitted with a different principal diagnosis or patients who develop a 
diagnosis after admission that requires ECMO). These stakeholders 
stated that the current MS-DRG assignments for such cases involving 
peripheral ECMO do not provide sufficient payment and do not fully 
consider the severity of illness of the patient and the level of 
resources involved in treating such patients, such as surgical team, 
general anesthesia, and other ECMO support such as specialized 
monitoring.
    With regard to stakeholders' concerns that we did not allow the 
opportunity for public comment on the MS-DRG assignment for the three 
new procedure codes that describe central and peripheral ECMO, as noted 
above and as explained in the FY 2019 IPPS/LTCH PPS final rule (83 FR 
41168), these new procedure codes were not finalized at the time of the 
proposed rule. We note that although there were no proposed MDC or MS-
DRG assignment or O.R. and non-O.R. designations for these three new 
procedure codes, we did, in fact, review and respond to comments on the 
recommended MDC and MS-DRG assignments and O.R./non-O.R. designations 
in the final rule (83 FR 41168 through 41169). For FY 2019, consistent 
with our annual process of assigning new procedure codes to MDCs and 
MS-DRGs and designating a procedure as an O.R. or non-O.R. procedure, 
we reviewed the predecessor procedure code assignments. Upon completing 
the review, our clinical advisors did not support assigning the two new 
ICD-10-PCS procedure codes for peripheral ECMO procedures to the same 
MS-DRG as the predecessor code for open (central) ECMO procedures. 
Further, our clinical advisors also did not agree with designating 
peripheral

[[Page 19174]]

ECMO procedures as O.R. procedures because they stated that these 
procedures are less resource intensive compared to open ECMO 
procedures.
    As noted, our annual process for assigning new procedure codes 
involves review of the predecessor procedure code's MS-DRG assignment. 
However, this process does not automatically result in the new 
procedure code being assigned (or proposed for assignment) to the same 
MS-DRG as the predecessor code. There are several factors to consider 
during this process that our clinical advisors take into account. For 
example, in the absence of volume, length of stay, and cost data, they 
may consider the specific service, procedure, or treatment being 
described by the new procedure code, the indications, treatment 
difficulty, and the resources utilized. We have continued to consider 
how these and other factors may apply in the context of classifying 
procedures under the ICD-10 MS-DRGs, including with regard to the 
specific concerns raised by stakeholders.
    In the absence of claims data for the new ICD-10-PCS procedure 
codes describing peripheral ECMO, we analyzed claims data from the 
September 2018 update of the FY 2018 MedPAR file for cases reporting 
the predecessor ICD-10-PCS procedure code 5A15223 (Extracorporeal 
membrane oxygenation, continuous) in Pre-MDC MS-DRG 003, including 
those cases reporting secondary diagnosis MCC and CC conditions, that 
were grouped under the ICD-10 MS-DRG Version 35 GROUPER. Our findings 
are shown in the table below.

----------------------------------------------------------------------------------------------------------------
                                                                     Number of    Average length
                             MS-DRG                                    cases          of stay      Average costs
----------------------------------------------------------------------------------------------------------------
MS-DRG 003--All cases...........................................          14,456            29.6        $122,168
MS-DRG 003--Cases reporting procedure code 5A15223                         2,086            20.2         128,168
 (Extracorporeal membrane oxygenation, continuous)..............
MS-DRG 003--Cases reporting procedure code 5A15223                         2,000            20.7         131,305
 (Extracorporeal membrane oxygenation, continuous) with MCC.....
MS-DRG 003--Cases reporting procedure code 5A15223                            79             7.6          58,231
 (Extracorporeal membrane oxygenation, continuous) with CC......
----------------------------------------------------------------------------------------------------------------

    The total number of cases reported in MS-DRG 003 was 14,456, with 
an average length of stay of 29.6 days and average costs of $122,168. 
For the cases reporting procedure code 5A15223 (Extracorporeal membrane 
oxygenation, continuous), there was a total of 2,086 cases, with an 
average length of stay of 20.2 days and average costs of $128,168. For 
the cases reporting procedure code 5A15223 with an MCC, there was a 
total of 2,000 cases, with an average length of stay of 20.7 days and 
average costs of $131,305. For the cases reporting procedure code 
5A15223 with a CC, there was a total of 79 cases, with an average 
length of stay of 7.6 days and average costs of $58,231.
    Our clinical advisors reviewed these data and noted that the 
average length of stay for the cases reporting ECMO with procedure code 
5A15223 of 20.2 days may not necessarily be a reliable indicator of 
resources that can be attributed to ECMO treatment. Our clinical 
advisors believed that a more appropriate measure of resource 
consumption for ECMO would be the number of hours or days that a 
patient was specifically receiving ECMO treatment, rather than the 
length of hospital stay. However, they noted that this information is 
not currently available in the claims data. Our clinical advisors also 
stated that the average costs of $128,168 for the cases reporting ECMO 
with procedure code 5A15223 are not necessarily reflective of the 
resources utilized for ECMO treatment alone, as the average costs 
represent a combination of factors, including the principal diagnosis, 
any secondary diagnosis CC and/or MCC conditions necessitating 
initiation of ECMO, and potentially any other procedures that may be 
performed during the hospital stay. Our clinical advisors recognized 
that patients who require ECMO treatment are severely ill and 
recommended we review the claims data to identify the number 
(frequency) and types of principal and secondary diagnosis CC and/or 
MCC conditions that were reported among the 2,086 cases reporting 
procedure code 5A15223. Our findings are shown in the following tables 
for the top 10 principal diagnosis codes, followed by the top 10 
secondary diagnosis MCC and secondary diagnosis CC conditions that were 
reported within the claims data with procedure code 5A15223.

  Top 10 Principal Diagnosis Codes Reported With Procedure Code 5A1223
            [Extracorporeal membrane oxygenation, continuous]
------------------------------------------------------------------------
                                                             Number of
       ICD-10-CM code                 Description         times reported
------------------------------------------------------------------------
A41.9.......................  Sepsis, unspecified                    145
                               organism.
I21.4.......................  Non-ST elevation (NSTEMI)              137
                               myocardial infarction.
I35.0.......................  Nonrheumatic aortic                     81
                               (valve) stenosis.
J84.112.....................  Idiopathic pulmonary                    68
                               fibrosis.
I25.110.....................  Atherosclerotic heart                   55
                               disease of native
                               coronary artery with
                               unstable angina pectoris.
J96.01......................  Acute respiratory failure               52
                               with hypoxia.
I21.09......................  STEMI involving other                   49
                               coronary artery of
                               anterior wall.
I25.10......................  Atherosclerotic heart                   48
                               disease of native
                               coronary artery w/o
                               angina pectoris.
I13.0.......................  Hypertensive heart &                    46
                               chronic kidney disease w
                               heart failure and stage 1
                               through stage 4 chronic
                               kidney disease, or
                               unspecified chronic
                               kidney disease.
I21.19......................  ST elevation (STEMI)                    43
                               myocardial infarction
                               involving other coronary
                               artery of inferior wall.
------------------------------------------------------------------------


[[Page 19175]]


                  Top 10 Secondary Diagnosis MCC Conditions Reported With Procedure Code 5A1223
                                [Extracorporeal membrane oxygenation, continuous]
----------------------------------------------------------------------------------------------------------------
                                                                     Number of    Average length
         ICD-10-CM code                     Description           times reported      of stay      Average costs
----------------------------------------------------------------------------------------------------------------
A41.9...........................  Sepsis, unspecified organism..             322            29.7        $186,055
E43.............................  Unspecified severe protein-                220            41.5         213,742
                                   calorie malnutrition.
G93.40..........................  Encephalopathy, unspecified...             217            27.2         165,193
J18.9...........................  Pneumonia, unspecified                     220            23.5         150,242
                                   organism.
J96.01..........................  Acute respiratory failure with             944            17.9         122,614
                                   hypoxia.
J96.02..........................  Acute respiratory failure with             220            20.9         139,511
                                   hypercapnia.
K72.00..........................  Acute and subacute hepatic                 524              19         140,878
                                   failure without coma.
N17.0...........................  Acute kidney failure with                  741            26.2         162,583
                                   tubular necrosis.
R57.0...........................  Cardiogenic shock.............             448            27.7         153,878
R65.21..........................  Severe sepsis with septic                  504            29.7         177,992
                                   shock.
----------------------------------------------------------------------------------------------------------------


                  Top 10 Secondary Diagnosis CC Conditions Reported With Procedure Code 5A1223
                                [Extracorporeal membrane oxygenation, continuous]
----------------------------------------------------------------------------------------------------------------
                                                                     Number of    Average length
         ICD-10-CM code                     Description           times reported      of stay      Average costs
----------------------------------------------------------------------------------------------------------------
D62.............................  Acute posthemorrhagic anemia..           1,139            21.8        $144,033
D68.9...........................  Coagulation defect,                        402            20.5         138,417
                                   unspecified.
E87.0...........................  Hyperosmolality and                        585            26.6         162,028
                                   hypernatremia.
E87.1...........................  Hypo-osmolality and                        316            26.1         151,824
                                   hyponatremia.
E87.2...........................  Acidosis......................             937            17.3         120,881
E87.4...........................  Mixed disorder of acid-base                268              26         150,257
                                   balance.
I13.0...........................  Hypertensive heart and chronic             314            18.4         121,962
                                   kidney disease with heart
                                   failure and stage 1 through
                                   stage 4 chronic kidney
                                   disease, or unspecified
                                   chronic kidney disease.
I47.2...........................  Ventricular tachycardia.......             384            17.5         123,383
J98.11..........................  Atelectasis...................             273            26.9         158,812
N17.9...........................  Acute kidney failure,                      757            18.5         122,180
                                   unspecified.
----------------------------------------------------------------------------------------------------------------

    These data show that the conditions reported for these patients 
requiring treatment with ECMO and reported with predecessor ICD-10-PCS 
procedure code 5A1223 represent a greater severity of illness, present 
greater treatment difficulty, have poorer prognoses, and have a greater 
need for intervention. While the data analysis was based on the 
conditions reported with the predecessor ICD-10-PCS procedure code 
5A1223 (Extracorporeal membrane oxygenation, continuous), our clinical 
advisors believe the data may provide an indication of how cases 
reporting the new procedure codes describing peripheral (percutaneous) 
ECMO may be represented in future claims data with regard to 
indications for treatment, a patient's severity of illness, resource 
utilization, and treatment difficulty.
    Based on the results of our data analysis and further review of the 
cases reporting ECMO, including consideration of the stakeholders' 
concerns that the MS-DRG assignments for ECMO procedures should not be 
based on the method of cannulation, our clinical advisors agree that 
resource consumption for both central and peripheral ECMO cases can be 
primarily attributed to the severity of illness of the patient, and 
that the method of cannulation is less relevant when considering the 
overall resources required to treat patients on ECMO. Specifically, our 
clinical advisors noted that consideration of resource consumption for 
cases reporting the use of ECMO may extend well beyond the duration of 
time that a patient was actively receiving ECMO treatment, which may 
range anywhere from less than 24 hours to 10 days or more. As noted 
above, in the absence of unique procedure codes that specify the 
duration of time that a patient was receiving ECMO treatment, we cannot 
ascertain from the claims data the resource use specifically 
attributable to treatment with ECMO during a hospital stay. However, 
when reviewing consumption of hospital resources for the cases in which 
ECMO was reported during a hospital stay, the claims data clearly show 
that the patients placed on ECMO typically have multiple MCC and CC 
conditions. These data provide additional information on the expanding 
indications for ECMO treatment as well as an indication of the 
complexities and the treatment difficulty associated with these 
patients. While our clinical advisors continue to believe that central 
(open) ECMO may be more resource intensive and carries significant 
risks for complications, including bleeding, infection, and vessel 
injury because it requires an incision along the sternum (sternotomy) 
and is performed for open heart surgery, they believe that the subset 
of patients who require treatment with ECMO, regardless of the 
cannulation method, would be similar in terms of overall hospital 
resource consumption. We also note that while we do not yet have 
Medicare claims data to evaluate the new peripheral ECMO procedure 
codes, review of limited registry data provided by stakeholders for 
patients treated with a reported peripheral ECMO procedure did not 
contradict that costs for peripheral ECMO appear to be similar to the 
costs of overall resources required to treat patients on ECMO 
(regardless of method of cannulation) and appear to be attributable to 
the severity of illness of the patient.
    With regard to stakeholders who stated that the two new procedure 
codes do not account for an open cut-down approach that may be 
performed on a peripheral vessel during a peripheral ECMO procedure, we 
note that a request and proposal to create ICD-10-PCS codes to 
differentiate between peripheral vessel percutaneous and peripheral 
vessel open cutdown

[[Page 19176]]

according to the indication (VA or VV) for ECMO was discussed at the 
March 5-6, 2019 ICD-10 Coordination and Maintenance Committee meeting. 
We refer readers to the website at: https://www.cms.gov/Medicare/Coding/ICD9ProviderDiagnosticCodes/ICD-9-CM-C-and-M-Meeting-Materials.html for the committee meeting materials and discussion 
regarding this proposal. We also note that, in this same proposal, 
another coding option to add duration values to allow the reporting of 
the number of hours or the number of days a patient received ECMO 
during the stay was also made available for public comment.
    Upon further review and consideration of peripheral ECMO 
procedures, including the indications, treatment difficulty, and the 
resources utilized, for the reasons discussed above, our clinical 
advisors support the assignment of the new ICD-10-PCS procedure codes 
for peripheral ECMO procedures to the same MS-DRG as the predecessor 
code for open (central) ECMO procedures for FY 2020. Therefore, based 
on our review, including consideration of the comments and input from 
our clinical advisors, we are proposing to reassign the following 
procedure codes describing peripheral ECMO procedures from their 
current MS-DRG assignments to Pre-MDC MS-DRG 003 (ECMO or Tracheostomy 
with Mechanical Ventilation >96 Hours or Principal Diagnosis Except 
Face, Mouth and Neck with Major O.R. Procedure) as shown in the table 
below. If this proposal is finalized, we also would make conforming 
changes to the titles for MS-DRGs 207, 291, 296, and 870 to no longer 
reflect the ``or Peripheral Extracorporeal Membrane Oxygenation 
(ECMO)'' terminology in the title. We note that this proposal includes 
maintaining the designation of these peripheral ECMO procedures as non-
O.R. Therefore, if finalized, the procedures would be defined as non-
O.R. affecting the MS-DRG assignment for Pre-MDC MS-DRG 003.

----------------------------------------------------------------------------------------------------------------
       ICD-10-PCS code            Code description            Current MS-DRG               Proposed MS-DRG
----------------------------------------------------------------------------------------------------------------
5A1522G.....................  Extracorporeal           MS-DRG 207 (Respiratory       Pre-MDC MS-DRG 003 (ECMO or
                               Oxygenation, Membrane,   System Diagnosis with         Tracheostomy with
                               Peripheral Veno-         Ventilator Support >96        Mechanical Ventilation >96
                               arterial.                Hours or Peripheral           Hours or Principal
                                                        Extracorporeal Membrane       Diagnosis Except Face,
                                                        Oxygenation (ECMO)).          Mouth and Neck with Major
                                                                                      O.R. Procedure).
                                                       MS-DRG 291 (Heart Failure     Pre-MDC MS-DRG 003 (ECMO or
                                                        and Shock with MCC or         Tracheostomy with
                                                        Peripheral Extracorporeal     Mechanical Ventilation >96
                                                        Membrane Oxygenation          Hours or Principal
                                                        (ECMO)).                      Diagnosis Except Face,
                                                                                      Mouth and Neck with Major
                                                                                      O.R. Procedure).
                                                       MS-DRG 296 (Cardiac Arrest,   Pre-MDC MS-DRG 003 (ECMO or
                                                        Unexplained with MCC or       Tracheostomy with
                                                        Peripheral Extracorporeal     Mechanical Ventilation >96
                                                        Membrane Oxygenation          Hours or Principal
                                                        (ECMO)).                      Diagnosis Except Face,
                                                                                      Mouth and Neck with Major
                                                                                      O.R. Procedure).
                                                       MS-DRG 870 (Septicemia or     Pre-MDC MS-DRG 003 (ECMO or
                                                        Severe Sepsis with            Tracheostomy with
                                                        Mechanical Ventilation >96    Mechanical Ventilation >96
                                                        Hours or Peripheral           Hours or Principal
                                                        Extracorporeal Membrane       Diagnosis Except Face,
                                                        Oxygenation (ECMO)).          Mouth and Neck with Major
                                                                                      O.R. Procedure).
5A1522H.....................  Extracorporeal           MS-DRG 207 (Respiratory       Pre-MDC MS-DRG 003 (ECMO or
                               Oxygenation, Membrane,   System Diagnosis with         Tracheostomy with
                               Peripheral Veno-venous.  Ventilator Support >96        Mechanical Ventilation >96
                                                        Hours or Peripheral           Hours or Principal
                                                        Extracorporeal Membrane       Diagnosis Except Face,
                                                        Oxygenation (ECMO)).          Mouth and Neck with Major
                                                                                      O.R. Procedure).
                                                       MS-DRG 291 (Heart Failure     Pre-MDC MS-DRG 003 (ECMO or
                                                        and Shock with MCC or         Tracheostomy with
                                                        Peripheral Extracorporeal     Mechanical Ventilation >96
                                                        Membrane Oxygenation          Hours or Principal
                                                        (ECMO)).                      Diagnosis Except Face,
                                                                                      Mouth and Neck with Major
                                                                                      O.R. Procedure).
                                                       MS-DRG 296 (Cardiac Arrest,   Pre-MDC MS-DRG 003 (ECMO or
                                                        Unexplained with MCC or       Tracheostomy with
                                                        Peripheral Extracorporeal     Mechanical Ventilation >96
                                                        Membrane Oxygenation          Hours or Principal
                                                        (ECMO)).                      Diagnosis Except Face,
                                                                                      Mouth and Neck with Major
                                                                                      O.R. Procedure).
                                                       MS-DRG 870 (Septicemia or     Pre-MDC MS-DRG 003 (ECMO or
                                                        Severe Sepsis with            Tracheostomy with
                                                        Mechanical Ventilation >96    Mechanical Ventilation >96
                                                        Hours or Peripheral           Hours or Principal
                                                        Extracorporeal Membrane       Diagnosis Except Face,
                                                        Oxygenation (ECMO)).          Mouth and Neck with Major
                                                                                      O.R. Procedure).
----------------------------------------------------------------------------------------------------------------

b. Allogeneic Bone Marrow Transplant
    We received a request to create new MS-DRGs for cases that would 
identify patients who undergo an allogeneic hematopoietic cell 
transplant (HCT) procedure. The requestor asked us to split MS-DRG 014 
(Allogeneic Bone Marrow Transplant) into two new MS-DRGs and assign 
cases to the recommended new MS-DRGs according to the donor source, 
with cases for allogeneic related matched donor source assigned to one 
MS-DRG and cases for allogeneic unrelated matched donor source assigned 
to the other MS-DRG. The requestor stated that by creating two new MS-
DRGs for allogeneic related and allogeneic unrelated donor source, 
respectively, the MS-DRGs would more appropriately recognize the 
clinical characteristics and cost differences in allogeneic HCT cases.
    The requestor stated that allogeneic related and allogeneic 
unrelated HCT cases are clinically different and have significantly 
different donor search and cell acquisition charges. According to the 
requestor, 70 percent of patients do not have a matched sibling donor 
(that is, an allogeneic related matched donor) in their family. The 
requestor also stated that this rate is higher for Medicare 
beneficiaries. According to the requestor, the current payment for 
allogeneic HCT cases is inadequate and affects patient's access to 
care.
    The requestor performed its own analysis and stated that it found 
the average costs for HCT cases reporting revenue code 0815 (Stem cell 
acquisition) alone or revenue code 0819 (Other organ acquisition) in 
combination with revenue code 0815 with one of the ICD-10-PCS procedure

[[Page 19177]]

codes for allogeneic unrelated donor source were significantly higher 
than the average costs for HCT cases reporting revenue code 0815 alone 
or both revenue codes 0815 and 0819 in combination with one of the ICD-
10-PCS procedure codes for allogeneic related donor source. Further, 
the requestor reported that, according to its analysis, the average 
costs for HCT cases reporting revenue code 0815 alone or both revenue 
codes 0815 and 0819 in combination with one of the ICD-10-PCS procedure 
codes for unspecified allogeneic donor source were also significantly 
higher than the average costs for HCT cases reporting the ICD-10-PCS 
procedure codes for allogeneic related donor source. The requestor 
suggested that cases reporting the unspecified donor source procedure 
code are highly likely to represent unrelated donors, and recommended 
that, if the two new MS-DRGs are created as suggested, the cases 
reporting the procedure codes for unspecified donor source be included 
in the suggested new ``unrelated donor'' MS-DRG. The requestor also 
suggested that CMS apply a code edit through the inpatient Medicare 
Code Editor (MCE), similar to the edit in the Integrated Outpatient 
Code Editor (I/OCE) which requires reporting of revenue code 0815 on 
the claim with the appropriate procedure code or the claim may be 
subject to being returned to the provider.
    The ICD-10-PCS procedure codes assigned to MS-DRG 014 that identify 
related, unrelated and unspecified donor source for an allogeneic HCT 
are shown in the following table.

------------------------------------------------------------------------
           ICD-10-PCS code                     Code description
------------------------------------------------------------------------
30230G2.............................  Transfusion of allogeneic related
                                       bone marrow into peripheral vein,
                                       open approach.
30230G3.............................  Transfusion of allogeneic
                                       unrelated bone marrow into
                                       peripheral vein, open approach.
30230G4.............................  Transfusion of allogeneic
                                       unspecified bone marrow into
                                       peripheral vein, open approach.
30230X2.............................  Transfusion of allogeneic related
                                       cord blood stem cells into
                                       peripheral vein, open approach.
30230X3.............................  Transfusion of allogeneic
                                       unrelated cord blood stem cells
                                       into peripheral vein, open
                                       approach.
30230X4.............................  Transfusion of allogeneic
                                       unspecified cord blood stem cells
                                       into peripheral vein, open
                                       approach.
30230Y2.............................  Transfusion of allogeneic related
                                       hematopoietic stem cells into
                                       peripheral vein, open approach.
30230Y3.............................  Transfusion of allogeneic
                                       unrelated hematopoietic stem
                                       cells into peripheral vein, open
                                       approach.
30230Y4.............................  Transfusion of allogeneic
                                       unspecified hematopoietic stem
                                       cells into peripheral vein, open
                                       approach.
30233G2.............................  Transfusion of allogeneic related
                                       bone marrow into peripheral vein,
                                       percutaneous approach.
30233G3.............................  Transfusion of allogeneic
                                       unrelated bone marrow into
                                       peripheral vein, percutaneous
                                       approach.
30233G4.............................  Transfusion of allogeneic
                                       unspecified bone marrow into
                                       peripheral vein, percutaneous
                                       approach.
30233X2.............................  Transfusion of allogeneic related
                                       cord blood stem cells into
                                       peripheral vein, percutaneous
                                       approach.
30233X3.............................  Transfusion of allogeneic
                                       unrelated cord blood stem cells
                                       into peripheral vein,
                                       percutaneous approach.
30233X4.............................  Transfusion of allogeneic
                                       unspecified cord blood stem cells
                                       into peripheral vein,
                                       percutaneous approach.
30233Y2.............................  Transfusion of allogeneic related
                                       hematopoietic stem cells into
                                       peripheral vein, percutaneous
                                       approach.
30233Y3.............................  Transfusion of allogeneic
                                       unrelated hematopoietic stem
                                       cells into peripheral vein,
                                       percutaneous approach.
30233Y4.............................  Transfusion of allogeneic
                                       unspecified hematopoietic stem
                                       cells into peripheral vein,
                                       percutaneous approach.
30240G2.............................  Transfusion of allogeneic related
                                       bone marrow into central vein,
                                       open approach.
30240G3.............................  Transfusion of allogeneic
                                       unrelated bone marrow into
                                       central vein, open approach.
30240G4.............................  Transfusion of allogeneic
                                       unspecified bone marrow into
                                       central vein, open approach.
30240X2.............................  Transfusion of allogeneic related
                                       cord blood stem cells into
                                       central vein, open approach.
30240X3.............................  Transfusion of allogeneic
                                       unrelated cord blood stem cells
                                       into central vein, open approach.
30240X4.............................  Transfusion of allogeneic
                                       unspecified cord blood stem cells
                                       into central vein, open approach.
30240Y2.............................  Transfusion of allogeneic related
                                       hematopoietic stem cells into
                                       central vein, open approach.
30240Y3.............................  Transfusion of allogeneic
                                       unrelated hematopoietic stem
                                       cells into central vein, open
                                       approach.
30240Y4.............................  Transfusion of allogeneic
                                       unspecified hematopoietic stem
                                       cells into central vein, open
                                       approach.
30243G2.............................  Transfusion of allogeneic related
                                       bone marrow into central vein,
                                       percutaneous approach.
30243G3.............................  Transfusion of allogeneic
                                       unrelated bone marrow into
                                       central vein, percutaneous
                                       approach.
30243G4.............................  Transfusion of allogeneic
                                       unspecified bone marrow into
                                       central vein, percutaneous
                                       approach.
30243X2.............................  Transfusion of allogeneic related
                                       cord blood stem cells into
                                       central vein, percutaneous
                                       approach.
30243X3.............................  Transfusion of allogeneic
                                       unrelated cord blood stem cells
                                       into central vein, percutaneous
                                       approach.
30243X4.............................  Transfusion of allogeneic
                                       unspecified cord blood stem cells
                                       into central vein, percutaneous
                                       approach.
30243Y2.............................  Transfusion of allogeneic related
                                       hematopoietic stem cells into
                                       central vein, percutaneous
                                       approach.
30243Y3.............................  Transfusion of allogeneic
                                       unrelated hematopoietic stem
                                       cells into central vein,
                                       percutaneous approach.
30243Y4.............................  Transfusion of allogeneic
                                       unspecified hematopoietic stem
                                       cells into central vein,
                                       percutaneous approach.
30250G1.............................  Transfusion of nonautologous bone
                                       marrow into peripheral artery,
                                       open approach.
30250X1.............................  Transfusion of nonautologous cord
                                       blood stem cells into peripheral
                                       artery, open approach.
30250Y1.............................  Transfusion of nonautologous
                                       hematopoietic stem cells into
                                       peripheral artery, open approach.
30253G1.............................  Transfusion of nonautologous bone
                                       marrow into peripheral artery,
                                       percutaneous approach.
30253X1.............................  Transfusion of nonautologous cord
                                       blood stem cells into peripheral
                                       artery, percutaneous approach.
30253Y1.............................  Transfusion of nonautologous
                                       hematopoietic stem cells into
                                       peripheral artery, percutaneous
                                       approach.
30260G1.............................  Transfusion of nonautologous bone
                                       marrow into central artery, open
                                       approach.
30260X1.............................  Transfusion of nonautologous cord
                                       blood stem cells into central
                                       artery, open approach.
30260Y1.............................  Transfusion of nonautologous
                                       hematopoietic stem cells into
                                       central artery, open approach.
30263G1.............................  Transfusion of nonautologous bone
                                       marrow into central artery,
                                       percutaneous approach.
30263X1.............................  Transfusion of nonautologous cord
                                       blood stem cells into central
                                       artery, percutaneous approach.
30263Y1.............................  Transfusion of nonautologous
                                       hematopoietic stem cells into
                                       central artery, percutaneous
                                       approach.
------------------------------------------------------------------------

    We examined claims data from the September 2018 update of the FY 
2018 MedPAR file for MS-DRG 014 and identified the subset of cases 
within MS-DRG 014 reporting procedure codes for allogeneic HCT related 
donor source, allogeneic HCT unrelated donor source, and allogeneic HCT 
unspecified donor source, respectively. Our findings are shown in the 
following table.

[[Page 19178]]



----------------------------------------------------------------------------------------------------------------
                                                                     Number of    Average length
                             MS-DRG                                    cases          of stay      Average costs
----------------------------------------------------------------------------------------------------------------
MS-DRG 014--All cases...........................................             854            28.2         $91,446
MS-DRG 014--Cases reporting allogeneic HCT related donor source.             292            29.5          87,444
MS-DRG 014--Cases reporting allogeneic HCT unrelated donor                   466            27.9          95,146
 source.........................................................
MS-DRG 014--Cases reporting allogeneic HCT unspecified donor                  90            26.2          90,945
 source.........................................................
----------------------------------------------------------------------------------------------------------------

    The total number of cases reported in MS-DRG 014 was 854, with an 
average length of stay of 28.2 days and average costs of $91,446. For 
the subset of cases reporting procedure codes for allogeneic HCT 
related donor source, there were a total of 292 cases with an average 
length of stay of 29.5 days and average costs of $87,444. For the 
subset of cases reporting procedure codes for allogeneic HCT unrelated 
donor source, there was a total of 466 cases with an average length of 
stay of 27.9 days and average costs of $95,146. For the subset of cases 
reporting procedure codes for allogeneic HCT unspecified donor source, 
there was a total of 90 cases with an average length of stay of 26.2 
days and average costs of $90,945.
    Based on the analysis described above, the current MS-DRG 
assignment for the cases in MS-DRG 014 that identify patients who 
undergo an allogeneic HCT procedure, regardless of donor source, 
appears appropriate. The data analysis reflects that each subset of 
cases reporting a procedure code for an allogeneic HCT procedure (that 
is, related, unrelated, or unspecified donor source) has an average 
length of stay and average costs that are comparable to the average 
length of stay and average costs of all cases in MS-DRG 014. We also 
take this opportunity to note that, in deciding whether to propose to 
make further modifications to the MS-DRGs for particular circumstances 
brought to our attention, we do not consider the reported revenue 
codes. Rather, as stated previously, we consider whether the resource 
consumption and clinical characteristics of the patients with a given 
set of conditions are significantly different than the remaining 
patients represented in the MS-DRG. We do this by evaluating the ICD-
10-CM diagnosis and/or ICD-10-PCS procedure codes that identify the 
patient conditions, procedures, and the relevant MS-DRG(s) that are the 
subject of a request. Specifically, for this request, as noted above, 
we analyzed the cases reporting the ICD-10-PCS procedure codes that 
identify an allogeneic HCT procedure according to the donor source. We 
then evaluated patient care costs using average costs and average 
lengths of stay (based on the MedPAR data) and rely on the judgment of 
our clinical advisors to determine whether the patients are clinically 
distinct or similar to other patients represented in the MS-DRG. 
Because MS-DRG 014 is defined by patients who undergo an allogeneic HCT 
transplant procedure, our clinical advisors state they are all 
clinically similar in that regard. We also note that the ICD-10-PCS 
procedure codes that describe an allogeneic HCT procedure were revised 
effective October 1, 2016 to uniquely identify the donor source in 
response to a request and proposal that was discussed at the March 9-
10, 2016 ICD-10 Coordination and Maintenance Committee meeting. We 
refer readers to the website at: https://www.cms.gov/Medicare/Coding/ICD9Provider DiagnosticCodes/ICD-9-CM-C-and-M-Meeting-Materials.html 
for the committee meeting materials and discussion regarding this 
proposal.
    In response to the requestor's statement that allogeneic related 
and allogeneic unrelated HCT cases are clinically different and have 
significantly different donor search and cell acquisition charges, our 
clinical advisors support maintaining the current structure for MS-DRG 
014 because they believe that MS-DRG 014 appropriately classifies all 
patients who undergo an allogeneic HCT procedures and, therefore, it is 
clinically coherent. While the requestor stated that there are clinical 
differences in the related and unrelated HCT cases, they did not 
provide any specific examples of these clinical differences. With 
regard to the donor search and cell acquisition charges, the requestor 
noted that the unrelated donor cases are more expensive than the 
related donor cases because of the donor search process, which includes 
a registry search to identify the best donor source, extensive donor 
screenings, evaluation, and cell acquisition and transportation 
services for the patient. The requestor appeared to base that belief 
according to the donor source and average charges reported with revenue 
code 0815. As noted above, we use MedPAR data and do not consider the 
reported revenue codes in deciding whether to propose to make further 
modifications to the MS-DRGs. Based on our analysis of claims data for 
MS-DRG 014, our clinical advisors stated that the resources are similar 
for patients who undergo an allogeneic HCT procedure regardless of the 
donor source.
    In reviewing this request, we also reviewed the instructions on 
billing for stem cell transplantation in Chapter 3 of the Medicare 
Claims Processing Manual and found that there appears to be inadvertent 
duplication under Section 90.3.1 and Section 90.3.3 of Chapter 3, as 
both sections provide instructions on Billing for Stem Cell 
Transplantation. Therefore, we are further reviewing the Medicare 
Claims Processing Manual to identify potential revisions to address 
this duplication. However, we also note that section 90.3.1 and section 
90.3.3 provide different instruction regarding which revenue code 
should be reported. Section 90.3.1 instructs providers to report 
revenue code 0815 and Section 90.3.3 instructs providers to report 
revenue code 0819. We note that we issued instructions as a One-Time 
Notification, Pub. No. 100-04, Transmittal 3571, Change Request 9674, 
effective January 1, 2017, which instructs that the appropriate revenue 
code to report on claims for allogeneic stem cell acquisition/donor 
services is revenue code 0815. Accordingly, we also are considering 
additional revisions as needed to conform the instructions for 
reporting these codes in the Medicare Claims Processing Manual.
    With regard to the requestor's recommendation that we create a new 
code edit through the inpatient MCE similar to the edit in the I/OCE 
which requires reporting of revenue code 0815 on the claim, we note 
that the MCE is not designed to include revenue codes for claims 
editing purposes. Rather, as stated in section II.F.16. of the preamble 
of this proposed rule, it is a software program that detects and 
reports errors in the coding of Medicare claims data. The coding of 
Medicare claims data refers to diagnosis and procedure coding, as well 
as demographic information.
    For the reasons described above, we are not proposing to change the 
current structure of MS-DRG 014. We are not proposing to split MS-DRG 
014 into two new MS-DRGs that assign cases according to whether the 
allogeneic donor source is related or unrelated, as the requestor 
suggested.
    In addition, while conducting our analysis of cases reporting ICD-
10-PCS

[[Page 19179]]

procedure codes for allogeneic HCT procedures that are assigned to MS-
DRG 014, we noted that 8 procedure codes for autologous HCT procedures 
are currently included in MS-DRG 014, as shown in the following table. 
These codes are not properly assigned because MS-DRG 014 is defined by 
cases reporting allogenic HCT procedures.

------------------------------------------------------------------------
           ICD-10-PCS code                     Code description
------------------------------------------------------------------------
30230X0.............................  Transfusion of autologous cord
                                       blood stem cells into peripheral
                                       vein, open approach.
30233X0.............................  Transfusion of autologous cord
                                       blood stem cells into peripheral
                                       vein, percutaneous approach.
30240X0.............................  Transfusion of autologous cord
                                       blood stem cells into central
                                       vein, open approach.
30243X0.............................  Transfusion of autologous cord
                                       blood stem cells into central
                                       vein, percutaneous approach.
30250X0.............................  Transfusion of autologous cord
                                       blood stem cells into peripheral
                                       artery, open approach.
30253X0.............................  Transfusion of autologous cord
                                       blood stem cells into peripheral
                                       artery, percutaneous approach.
30260X0.............................  Transfusion of autologous cord
                                       blood stem cells into central
                                       artery, open approach.
30263X0.............................  Transfusion of autologous cord
                                       blood stem cells into central
                                       artery, percutaneous approach.
------------------------------------------------------------------------

    The 8 ICD-10-PCS procedure codes for autologous HCT procedures were 
inadvertently included in MS-DRG 014 as a result of efforts to 
replicate the ICD-9-CM MS-DRGs. Under the ICD-9-CM MS-DRGs, procedure 
code 41.06 (Cord blood stem cell transplant) was used to identify these 
procedures and was also assigned to MS-DRG 014. As shown in the ICD-9-
CM code description, the reference to ``autologous'' is not included. 
However, because the ICD-10-PCS autologous HCT procedure codes were 
considered as plausible translations of the ICD-9-CM procedure code 
(41.06), they were inadvertently included in MS-DRG 014. We also note 
that, of these 8 procedure codes, there are 4 procedure codes that 
describe a transfusion via arterial access. As described in more detail 
below, because a transfusion procedure always uses venous access rather 
than arterial access, these codes are considered clinically invalid and 
were the subject of a proposal discussed at the March 5-6, 2019 ICD-10 
Coordination and Maintenance Committee meeting to delete these codes 
effective October 1, 2019 (FY 2020).
    The majority of ICD-10-PCS procedure codes specifying autologous 
HCT procedures are currently assigned to MS-DRGs 016 and 017 
(Autologous Bone Marrow Transplant with CC/MCC or T-cell Immunotherapy 
and Autologous Bone Marrow Transplant without CC/MCC, respectively). 
These codes are listed in the following table.

------------------------------------------------------------------------
           ICD-10-PCS code                     Code description
------------------------------------------------------------------------
30230AZ.............................  Transfusion of embryonic stem
                                       cells into peripheral vein, open
                                       approach.
30230G0.............................  Transfusion of autologous bone
                                       marrow into peripheral vein, open
                                       approach.
30230Y0.............................  Transfusion of autologous
                                       hematopoietic stem cells into
                                       peripheral vein, open approach.
30233AZ.............................  Transfusion of embryonic stem
                                       cells into peripheral vein,
                                       percutaneous approach.
30233G0.............................  Transfusion of autologous bone
                                       marrow into peripheral vein,
                                       percutaneous approach.
30233Y0.............................  Transfusion of autologous
                                       hematopoietic stem cells into
                                       peripheral vein, percutaneous
                                       approach.
30240AZ.............................  Transfusion of embryonic stem
                                       cells into central vein, open
                                       approach.
30240G0.............................  Transfusion of autologous bone
                                       marrow into central vein, open
                                       approach.
30240Y0.............................  Transfusion of autologous
                                       hematopoietic stem cells into
                                       central vein, open approach.
30243AZ.............................  Transfusion of embryonic stem
                                       cells into central vein,
                                       percutaneous approach.
30243G0.............................  Transfusion of autologous bone
                                       marrow into central vein,
                                       percutaneous approach.
30243Y0.............................  Transfusion of autologous
                                       hematopoietic stem cells into
                                       central vein, percutaneous
                                       approach.
30250G0.............................  Transfusion of autologous bone
                                       marrow into peripheral artery,
                                       open approach.
30250Y0.............................  Transfusion of autologous
                                       hematopoietic stem cells into
                                       peripheral artery, open approach.
30253G0.............................  Transfusion of autologous bone
                                       marrow into peripheral artery,
                                       percutaneous approach.
30253Y0.............................  Transfusion of autologous
                                       hematopoietic stem cells into
                                       peripheral artery, percutaneous
                                       approach.
30260G0.............................  Transfusion of autologous bone
                                       marrow into central artery, open
                                       approach.
30260Y0.............................  Transfusion of autologous
                                       hematopoietic stem cells into
                                       central artery, open approach.
30263G0.............................  Transfusion of autologous bone
                                       marrow into central artery,
                                       percutaneous approach.
30263Y0.............................  Transfusion of autologous
                                       hematopoietic stem cells into
                                       central artery, percutaneous
                                       approach.
------------------------------------------------------------------------

    While we believe, as indicated, that the cases reporting ICD-10-PCS 
procedure codes for autologous HCT procedures may be improperly 
assigned to MS-DRG 014, we also examined claims data for this subset of 
cases to determine the frequency with which they were reported and the 
relative resource use as compared with all cases assigned to MS-DRGs 
016 and 017. Our findings are shown in the following table.

----------------------------------------------------------------------------------------------------------------
                                                                     Number of    Average length
                             MS-DRG                                    cases          of stay      Average costs
----------------------------------------------------------------------------------------------------------------
MS-DRG 014--Cases reporting autologous cord blood stem cell                    6            23.5         $38,319
 donor source...................................................
MS-DRG 016--All cases...........................................           2,150              18          47,546
MS-DRG 017--All cases...........................................             104              11          33,540
----------------------------------------------------------------------------------------------------------------

    For the subset of cases in MS-DRG 014 reporting ICD-10-PCS codes 
for autologous HCT procedures, there was a total of 6 cases with an 
average length of stay of 23.5 days and average costs of $38,319. The 
total number of cases reported in MS-DRG 016 was 2,150, with an average 
length of stay of 18 days and average costs of $47,546. The total 
number of cases reported in MS-DRG 017 was 104, with an average length 
of

[[Page 19180]]

stay of 11 days and average costs of $33,540.
    The results of our analysis indicate that the frequency with which 
these autologous HCT procedure codes was reported in MS-DRG 014 is low 
and that average costs of cases reporting autologous HCT procedures 
assigned to MS-DRG 014 are more aligned with the average costs of cases 
assigned to MS-DRGs 016 and 017, with the average costs being lower 
than the average costs for all cases assigned to MS-DRG 016 and higher 
than the average costs for all cases assigned to MS-DRG 017. Our 
clinical advisors also indicated that the procedure codes for 
autologous HCT procedures are more clinically aligned with cases that 
are assigned to MS-DRGs 016 and 017 that are comprised of autologous 
HCT procedures. Therefore, we are proposing to reassign the following 4 
procedure codes for HCT procedures specifying autologous cord blood 
stem cell as the donor source via venous access to MS-DRGs 016 and 017 
for FY 2020.

------------------------------------------------------------------------
           ICD-10-PCS code                     Code description
------------------------------------------------------------------------
30230X0.............................  Transfusion of autologous cord
                                       blood stem cells into peripheral
                                       vein, open approach.
30233X0.............................  Transfusion of autologous cord
                                       blood stem cells into peripheral
                                       vein, percutaneous approach.
30240X0.............................  Transfusion of autologous cord
                                       blood stem cells into central
                                       vein, open approach.
30243X0.............................  Transfusion of autologous cord
                                       blood stem cells into central
                                       vein, percutaneous approach.
------------------------------------------------------------------------

    As discussed earlier in this section, the 4 procedure codes for HCT 
procedures that describe an autologous cord blood stem cell transfusion 
via arterial access currently assigned to MS-DRG 014, as listed 
previously, are considered clinically invalid. These procedure codes 
were discussed at the March 5-6, 2019 ICD-10 Coordination and 
Maintenance Committee meeting, along with additional procedure codes 
that are also considered clinically invalid, as described in the 
section below.
    During our analysis of procedure codes that describe a HCT 
procedure, we identified 128 clinically invalid codes from the 
transfusion table (table 302) in the ICD-10-PCS classification 
identifying a transfusion using arterial access, as listed in Table 
6P.1a. associated with this proposed rule (which is available via the 
internet on the CMS website at: https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/AcuteInpatientPPS/index.html). As shown in 
Table 6P.1a., these 128 procedure codes describe transfusion procedures 
with body system/region values ``5'' Peripheral Artery and ``6'' 
Central Artery. Because a transfusion procedure always uses venous 
access rather than arterial access, these codes are considered 
clinically invalid and were proposed for deletion at the March 5-6, 
2019 ICD-10 Coordination and Maintenance Committee meeting. We refer 
the reader to the website at: https://www.cms.gov/Medicare/Coding/ICD10/C-and-M-Meeting-Materials.html for the Committee meeting 
materials regarding this proposal.
    We examined claims data from the September 2018 update of the FY 
2018 MedPAR file for MS-DRGs 014, 016, and 017 to determine if there 
were any cases that reported one of the 128 clinically invalid codes 
from the transfusion table in the ICD-10-PCS classification identifying 
a transfusion using arterial access, and as listed in Table 6P.1a. 
associated with this proposed rule. Our clinical advisors agree that 
because a transfusion procedure always uses venous access rather than 
arterial access, these codes are considered invalid. Because these 
procedure codes describe clinically invalid procedures, we would not 
expect these codes to be reported in any claims data. Our findings are 
shown in the following table.

----------------------------------------------------------------------------------------------------------------
                                                                     Number of    Average length
                             MS-DRG                                    cases          of stay      Average costs
----------------------------------------------------------------------------------------------------------------
MS-DRGs 014, 016, and 017--All cases............................           3,108            20.4         $59,140
MS-DRGs 014, 016, and 017--Cases with invalid transfusion codes.              31            19.6          52,912
----------------------------------------------------------------------------------------------------------------

    As shown in this table, we found a total of 3,108 cases across MS-
DRGs 014, 016, and 017 with an average length of stay of 20.4 days and 
average costs of $59,140. We found a total of 31 cases (0.9 percent) 
reporting a procedure code for an invalid transfusion procedure, 
identifying the body system/region value ``5'' Peripheral Artery or 
``6'' Central Artery, with an average length of stay of 19.6 days and 
average costs of $52,912. The results of the data analysis demonstrate 
that these invalid transfusion procedures represent approximately 1 
percent of all discharges across MS-DRGs 014, 016, and 017. To 
summarize, we are proposing to: (1) Reassign the four ICD-10-PCS codes 
for HCT procedures specifying autologous cord blood stem cell as the 
donor source from MS-DRG 014 to MS-DRGs 016 and 017 (procedure codes 
30230X0, 30233X0, 30240X0, 30243X0); and (2) delete the 128 clinically 
invalid codes from the transfusion table in the ICD-10-PCS 
Classification describing a transfusion using arterial access that were 
discussed at the March 5-6, 2019 ICD-10 Coordination and Maintenance 
Committee meeting and are listed in Table 6P.1a associated with this 
proposed rule. As discussed previously, we are not proposing to split 
MS-DRG 014 into the two requested new MS DRGs that would assign cases 
according to whether the allogeneic donor source is related or 
unrelated.
c. Chimeric Antigen Receptor (CAR) T-Cell Therapies
    We received a request to create a new MS-DRG for procedures 
involving CAR T-cell therapies. The requestor stated that creation of a 
new MS-DRG would improve payment for CAR T-cell therapies in the 
inpatient setting. According to the requestor, while cases involving 
CAR T-cell therapy may now be eligible for new technology add-on 
payments and outlier payments, there continue to be significant 
financial losses by providers. The requestor also suggested that CMS 
modify its existing payment mechanisms to use a CCR of 1.0 for charges 
associated with CAR T-cell therapy.
    In addition, the requestor included technical and operational 
suggestions related to CAR T-cell therapy, such as

[[Page 19181]]

the development of unique CAR T-cell therapy revenue and cost centers 
for billing and cost reporting purposes. We will consider these 
technical and operational suggestions in the development of future 
billing and cost reporting guidelines and instructions.
    Currently, procedures involving CAR T-cell therapies are identified 
with ICD-10-PCS procedure codes XW033C3 (Introduction of engineered 
autologous chimeric antigen receptor t-cell immunotherapy into 
peripheral vein, percutaneous approach, new technology group 3) and 
XW043C3 (Introduction of engineered autologous chimeric antigen 
receptor t-cell immunotherapy into central vein, percutaneous approach, 
new technology group 3), which became effective October 1, 2017. In the 
FY 2019 IPPS/LTCH PPS final rule, we finalized our proposal to assign 
cases reporting these ICD-10-PCS procedure codes to Pre-MDC MS-DRG 016 
for FY 2019 and to revise the title of this MS-DRG to ``Autologous Bone 
Marrow Transplant with CC/MCC or T-cell Immunotherapy''. We refer 
readers to section II.F.2.d. of the preamble of the FY 2019 IPPS/LTCH 
PPS final rule for a complete discussion of these final policies (83 FR 
41172 through 41174).
    As stated earlier, the current procedure codes for CAR T-cell 
therapies both became effective October 1, 2017. In the FY 2019 IPPS/
LTCH PPS final rule (83 FR 41172 through 41174), we indicated we should 
collect more comprehensive clinical and cost data before considering 
assignment of a new MS-DRG to these therapies. While the September 2018 
update of the FY 2018 MedPAR data file does contain some claims that 
include those procedure codes that identify CAR T-cell therapies, the 
number of cases is limited, and the submitted costs vary widely due to 
differences in provider billing and charging practices for this 
therapy. Therefore, while these claims could potentially be used to 
create relative weights for a new MS-DRG, we do not have the 
comprehensive clinical and cost data that we generally believe are 
needed to do so. Furthermore, given the relative newness of CAR T-cell 
therapy and our proposal to continue new technology add-on payments for 
FY 2020 for the two CAR T-cell therapies that currently have FDA 
approval (KYMRIAHTM and YESCARTATM), as discussed 
in section II.G.4.d. of the preamble of this proposed rule, at this 
time we believe it may be premature to consider creation of a new MS-
DRG specifically for cases involving CAR T-cell therapy for FY 2020.
    Therefore, we are proposing not to modify the current MS-DRG 
assignment for cases reporting CAR T-cell therapies for FY 2020. As 
noted earlier, cases reporting ICD-10-PCS codes XW033C3 and XW043C3 
would continue to be eligible to receive new technology add-on payments 
for discharges occurring in FY 2020 if our proposal to continue such 
payments is finalized. Currently, we expect that, in future years, we 
would have additional data that exhibit more stability and greater 
consistency in charging and billing practices that could be used to 
evaluate the potential creation of a new MS-DRG specifically for cases 
involving CAR T-cell therapies.
    Alternatively, notwithstanding our concerns regarding the claims 
data, and the concerns discussed in the FY 2019 IPPS/LTCH PPS final 
rule (83 FR 41172 to 41174), we are seeking public comments on payment 
alternatives for CAR T-cell therapies, including payment under any 
potential new MS-DRG. We also are inviting public comments on how these 
payment alternatives would affect access to care, as well as how they 
affect incentives to encourage lower drug prices, which is a high 
priority for this Administration. As discussed in the FY 2019 IPPS/LTCH 
PPS final rule (83 FR 41172 through 41174), we are considering 
approaches and authorities to encourage value-based care and lower drug 
prices. We are soliciting public comments on how the effective dates of 
any potential payment methodology alternatives, if any were to be 
adopted, may intersect and affect future participation in any such 
alternative approaches.
    As part of our solicitation of public comment on the potential 
creation of a new MS-DRG for CAR T-cell therapy procedures, we are also 
seeking comment on the most appropriate way to develop the relative 
weight if we were to finalize the creation of a new MS-DRG. While the 
data are limited, it may be operationally possible to create a relative 
weight by dividing the average costs of cases that include the CAR T-
cell procedures by the average costs of all cases, consistent with our 
current methodology for setting the relative weights for FY 2020 and 
using the same applicable data sources used for other MS-DRGs (for FY 
2020, the FY 2018 MedPAR data and FY 2016 HCRIS data). We are seeking 
public comments on whether this is the most accurate method for 
determining the relative weight, given the current variation in the 
claims data for these procedures, and also on how to address the 
significant number of cases involving clinical trials. While we do not 
typically exclude cases in clinical trials when developing the relative 
weights, in this case, the absence of the drug costs on claims for 
cases involving clinical trial claims could have a significant impact 
on the relative weight. It is unclear whether a relative weight 
calculated using cases for which hospitals do and do not incur drug 
costs would accurately reflect the resource costs of caring for 
patients who are not involved in clinical trials. A different approach 
might be to develop a relative weight using an appropriate portion of 
the average sales price (ASP) for these drugs as an alternative way to 
reflect the costs involved in treating patients receiving CAR T-cell 
therapies. We are requesting public comments on these approaches or 
other approaches for setting the relative weight if we were to finalize 
a new MS-DRG. We note that any such new MS-DRG would be established in 
a budget neutral manner, consistent with section 1886(d)(4)(C)(iii) of 
the Act, which specifies that the annual DRG reclassification and 
recalibration of the relative weights must be made in a manner that 
ensures that aggregate payments to hospitals are not affected.
    Another potential consideration if we were to create a new MS-DRG 
is the extent to which it would be appropriate to geographically adjust 
the payment under any such new MS-DRG. Under the methodology for 
determining the Federal payment rate for operating costs under the 
IPPS, the labor-related proportion of the national standardized amounts 
is adjusted by the wage index to reflect the relative differences in 
labor costs among geographic areas. The IPPS Federal payment rate for 
operating costs is calculated as the MS-DRG relative weight x [(labor-
related applicable standardized amount x applicable wage index) + 
(nonlabor-related applicable standardized amount x cost-of-living 
adjustment)]. Given our understanding that the costs for CAR T-cell 
therapy drugs do not vary among geographic areas, and given that costs 
for CAR T-cell therapy would likely be an extremely high portion of the 
costs for the MS-DRG, we are seeking public comments on whether we 
should not geographically adjust the payment for cases assigned to any 
potential new MS-DRG for CAR T-cell therapy procedures. We also are 
seeking public comments on whether to instead apply the geographic 
adjustment to a lower proportion of payments under any potential new 
MS-DRG and, if so, how that lower proportion should be determined. We 
note that while the prices of other drugs may also not vary 
significantly among geographic areas, generally speaking, those other 
drugs would not have estimated costs as high

[[Page 19182]]

as those of CAR T-cell therapies, nor would they represent as 
significant a percentage of the average costs for the case. We are 
seeking public comments on the use of our exceptions and adjustments 
authority under section 1886(d)(5)(I) of the Act (or other relevant 
authorities) to implement any such potential changes.
    Section 1886(d)(5)(B) of the Act provides that prospective payment 
hospitals that have residents in an approved graduate medical education 
(GME) program receive an additional payment for a Medicare discharge to 
reflect the higher patient care costs of teaching hospitals relative to 
nonteaching hospitals. The regulations regarding the calculation of 
this additional payment, known as the indirect medical education (IME) 
adjustment, are located at 42 CFR 412.105. The formula is traditionally 
described in terms of a certain percentage increase in payment for 
every 10-percent increase in the resident-to-bed ratio. For some 
hospitals, this percentage increase can exceed an additional 25 percent 
or more of the otherwise applicable payment. Some hospitals, sometimes 
the same hospitals, can also receive a large percentage increase in 
payments due to the Medicare disproportionate hospital (DSH) adjustment 
provision under section 1886(d)(5)(F) of the Act. The regulations 
regarding the calculation of the additional DSH payment are located at 
42 CFR 412.106.
    Given that the payment for cases assigned to a new MS-DRG for CAR 
T-cell therapy could significantly exceed the historical payment for 
any existing MS-DRG, these percentage add-on payments could arguably 
result in unreasonably high additional payments for CAR T-cell therapy 
cases unrelated in any significant empirical way to the costs of the 
hospital in providing care. For example, consider a teaching hospital 
that has an IME adjustment factor of 0.25, and a DSH adjustment factor 
of 0.10. If we were to create a new MS-DRG for CAR T-cell therapy 
procedures that resulted in an average IPPS Federal payment rate for 
operating costs of $400,000, under the current payment mechanism, the 
hospital would receive an IME payment of $100,000 ($400,000 x 0.25) and 
a DSH payment of $40,000 ($400,000 x 0.10), such that the total IPPS 
Federal payment rate for operating costs including IME and DSH payments 
would be $540,000 ($400,000 + $100,000 + $40,000). We are seeking 
public comments on whether the IME and DSH payments should not be made 
for cases assigned to any new MS-DRG for CAR T-cell therapy. We also 
are seeking public comments on whether we should instead reduce the 
applicable percentages used to determine these add-ons and, if so, how 
those lower percentages should be determined. We are seeking public 
comments on the use of our exceptions and adjustments authority under 
section 1886(d)(5)(I) of the Act (or other relevant authorities) to 
implement any potential changes.
    As further discussed section II.G.7. of the preamble to this 
proposed rule, we are also requesting public comment on other payment 
alternatives for these cases, including eliminating the use of the CCR 
in calculating the new technology add-on payment for KYMRIAH[supreg] 
and YESCARTA[supreg] by making a uniform add-on payment that equals the 
proposed maximum add-on payment, that is, 65 percent of the cost of the 
technology (in accordance with the proposed increase in the calculation 
of the maximum new technology add-on payment amount), which in this 
instance would be $242,450; and/or using a higher percentage than the 
proposed 65 percent to calculate the maximum new technology add-on 
payment amount.
    We are also requesting public comments on whether, in light of the 
additional experience with billing and payment for cases involving CAR 
T-cell therapies to Medicare patients, we should consider utilizing a 
specific CCR for ICD-10-PCS procedure codes used to report the 
performance of procedures involving the use of CAR T-cell therapies; 
for example, a CCR of 1.0, when determining outlier payments, when 
determining the new technology add-on payments, and when determining 
payments to IPPS-excluded cancer hospitals for CAR T-cell therapies.
    We note that we also considered this payment alternative for FY 
2019, as discussed in the FY 2019 IPPS/LTCH PPS final rule (83 FR 41172 
through 41174). We indicated in that rulemaking that such a payment 
alternative might use a CCR of 1.0 for charges associated with ICD-10-
PCS procedure codes XW033C3 and XW043C3, given that many public 
inquirers believed that hospitals would be unlikely to set charges 
different from the costs for KYMRIAH[supreg] and YESCARTA[supreg] CAR 
T-cell therapies. We also indicated such a change would result in a 
higher outlier payment, higher new technology add-on payment, or the 
determination of higher costs for IPPS-excluded cancer hospital cases. 
For example, and as described in the FY 2019 IPPS LTCH PPS final rule 
(83 FR 41773), if a hospital charged $400,000 for the procedure 
described by ICD-10-PCS procedure code XW033C3, the application of a 
hypothetical CCR of 0.25 results in a cost of $100,000 (= $400,000 * 
0.25) while the application of a hypothetical CCR of 1.00 results in a 
cost of $400,000 (= $400,000 * 1.0).
3. MDC 1 (Diseases and Disorders of the Nervous System): Carotid Artery 
Stent Procedures
    The logic for case assignment to MS-DRGs 034, 035, and 036 (Carotid 
Artery Stent Procedures with MCC, with CC, and without CC/MCC, 
respectively) as displayed in the ICD-10 MS-DRG Version 36 Definitions 
Manual (which is available via the internet on the CMS website at: 
https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/AcuteInpatientPPS/MS-DRG-Classifications-and-Software.html) is 
comprised of two lists of logic that include procedure codes for 
operating room (O.R.) procedures involving dilation of a carotid artery 
(common, internal or external) with intraluminal device(s). The first 
list of logic is entitled ``Operating Room Procedures'' and the second 
list of logic is entitled ``Operating Room Procedures with Operating 
Room Procedures''. We identified 46 ICD-10-PCS procedure codes in the 
second logic list that do not describe dilation of a carotid artery 
with an intraluminal device. Of these 46 procedure codes, we identified 
24 codes describing dilation of a carotid artery without an 
intraluminal device; 8 codes describing dilation of the vertebral 
artery; and 14 codes describing dilation of a vein (jugular, vertebral 
and face), as shown in the following table.

ICD-10 PCS Codes That Involve Dilation of a Neck Artery or Vein With and
                     Without an Intraluminal Device
------------------------------------------------------------------------
           ICD-10-PCS code                     Code description
------------------------------------------------------------------------
037H3Z6.............................  Dilation of right common carotid
                                       artery, bifurcation, percutaneous
                                       approach.
037H3ZZ.............................  Dilation of right common carotid
                                       artery, percutaneous approach.

[[Page 19183]]

 
037H4Z6.............................  Dilation of right common carotid
                                       artery, bifurcation, percutaneous
                                       endoscopic approach.
037H4ZZ.............................  Dilation of right common carotid
                                       artery, percutaneous endoscopic
                                       approach.
037J3Z6.............................  Dilation of left common carotid
                                       artery, bifurcation, percutaneous
                                       approach.
037J3ZZ.............................  Dilation of left common carotid
                                       artery, percutaneous approach.
037J4Z6.............................  Dilation of left common carotid
                                       artery, bifurcation, percutaneous
                                       endoscopic approach.
037J4ZZ.............................  Dilation of left common carotid
                                       artery, percutaneous endoscopic
                                       approach.
037K3Z6.............................  Dilation of right internal carotid
                                       artery, bifurcation, percutaneous
                                       approach.
037K3ZZ.............................  Dilation of right internal carotid
                                       artery, percutaneous approach.
037K4Z6.............................  Dilation of right internal carotid
                                       artery, bifurcation, percutaneous
                                       endoscopic approach.
037K4ZZ.............................  Dilation of right internal carotid
                                       artery, percutaneous endoscopic
                                       approach.
037L3Z6.............................  Dilation of left internal carotid
                                       artery, bifurcation, percutaneous
                                       approach.
037L3ZZ.............................  Dilation of left internal carotid
                                       artery, percutaneous approach.
037L4Z6.............................  Dilation of left internal carotid
                                       artery, bifurcation, percutaneous
                                       endoscopic approach.
037L4ZZ.............................  Dilation of left internal carotid
                                       artery, percutaneous endoscopic
                                       approach.
037M3Z6.............................  Dilation of right external carotid
                                       artery, bifurcation, percutaneous
                                       approach.
037M3ZZ.............................  Dilation of right external carotid
                                       artery, percutaneous approach.
037M4Z6.............................  Dilation of right external carotid
                                       artery, bifurcation, percutaneous
                                       endoscopic approach.
037M4ZZ.............................  Dilation of right external carotid
                                       artery, percutaneous endoscopic
                                       approach.
037N3Z6.............................  Dilation of left external carotid
                                       artery, bifurcation, percutaneous
                                       approach.
037N3ZZ.............................  Dilation of left external carotid
                                       artery, percutaneous approach.
037N4Z6.............................  Dilation of left external carotid
                                       artery, bifurcation, percutaneous
                                       endoscopic approach.
037N4ZZ.............................  Dilation of left external carotid
                                       artery, percutaneous endoscopic
                                       approach.
037P3Z6.............................  Dilation of right vertebral
                                       artery, bifurcation, percutaneous
                                       approach.
037P3ZZ.............................  Dilation of right vertebral
                                       artery, percutaneous approach.
037P4Z6.............................  Dilation of right vertebral
                                       artery, bifurcation, percutaneous
                                       endoscopic approach.
037P4ZZ.............................  Dilation of right vertebral
                                       artery, percutaneous endoscopic
                                       approach.
037Q3Z6.............................  Dilation of left vertebral artery,
                                       bifurcation, percutaneous
                                       approach.
037Q3ZZ.............................  Dilation of left vertebral artery,
                                       percutaneous approach.
037Q4Z6.............................  Dilation of left vertebral artery,
                                       bifurcation, percutaneous
                                       endoscopic approach.
037Q4ZZ.............................  Dilation of left vertebral artery,
                                       percutaneous endoscopic approach.
057M3DZ.............................  Dilation of right internal jugular
                                       vein with intraluminal device,
                                       percutaneous approach.
057M4DZ.............................  Dilation of right internal jugular
                                       vein with intraluminal device,
                                       percutaneous endoscopic approach.
057N3DZ.............................  Dilation of left internal jugular
                                       vein with intraluminal device,
                                       percutaneous approach.
057N4DZ.............................  Dilation of left internal jugular
                                       vein with intraluminal device,
                                       percutaneous endoscopic approach.
057P3DZ.............................  Dilation of right external jugular
                                       vein with intraluminal device,
                                       percutaneous approach.
057P4DZ.............................  Dilation of right external jugular
                                       vein with intraluminal device,
                                       percutaneous endoscopic approach.
057Q3DZ.............................  Dilation of left external jugular
                                       vein with intraluminal device,
                                       percutaneous approach.
057Q4DZ.............................  Dilation of left external jugular
                                       vein with intraluminal device,
                                       percutaneous endoscopic approach.
057R3DZ.............................  Dilation of left vertebral vein
                                       with intraluminal device,
                                       percutaneous approach.
057R4DZ.............................  Dilation of right vertebral vein
                                       with intraluminal device,
                                       percutaneous endoscopic approach.
057S3DZ.............................  Dilation of left vertebral vein
                                       with intraluminal device,
                                       percutaneous approach.
057S4DZ.............................  Dilation of left vertebral vein
                                       with intraluminal device,
                                       percutaneous endoscopic approach.
057T3DZ.............................  Dilation of right face vein with
                                       intraluminal device, percutaneous
                                       approach.
057T4DZ.............................  Dilation of right face vein with
                                       intraluminal device, percutaneous
                                       endoscopic approach.
------------------------------------------------------------------------

    We examined claims data from the September 2018 update of the FY 
2018 MedPAR file for MS-DRGs 034, 035, and 036 and identified cases 
reporting any one of the 46 ICD-10-PCS procedure codes listed in the 
tables above. Our findings are shown in the following table.

                                   MS-DRGs for Carotid Artery Stent Procedures
----------------------------------------------------------------------------------------------------------------
                                                                     Number of    Average length
                             MS-DRG                                    cases          of stay      Average costs
----------------------------------------------------------------------------------------------------------------
MS-DRG 034--All cases...........................................             863             6.8         $27,600
MS-DRG 034--Cases with procedure code other than dilation of a                15             8.8          36,596
 carotid artery with an intraluminal device.....................
MS-DRG 035--All cases...........................................           2,369               3          16,731
MS-DRG 035--Cases with procedure code other than dilation of a                52             3.5          17,815
 carotid artery with an intraluminal device.....................
MS-DRG 036--All cases...........................................           3,481             1.4          12,637
MS-DRG 036--Cases with procedure code other than dilation of a                67             1.4          12,621
 carotid artery with an intraluminal device.....................
----------------------------------------------------------------------------------------------------------------

    As shown in the table above, we found a total of 863 cases with an 
average length of stay of 6.8 days and average costs of $27,600 in MS-
DRG 034. There were 15 cases reporting at least one of the 46 procedure 
codes that

[[Page 19184]]

do not describe dilation of the carotid artery with an intraluminal 
device in MS-DRG 034 with an average length of stay of 8.8 days and 
average costs of $36,596. For MS-DRG 035, we found a total of 2,369 
cases with an average length of stay of 3 days and average costs of 
$16,731. There were 52 cases reporting at least one of the 46 procedure 
codes that do not describe dilation of the carotid artery with an 
intraluminal device in MS-DRG 035 with an average length of stay of 3.5 
days and average costs of $17,815. For MS-DRG 036, we found a total of 
3,481 cases with an average length of stay of 1.4 days and average 
costs of $12,637. There were 67 cases reporting at least one of the 46 
procedure codes that do not describe dilation of the carotid artery 
with an intraluminal device in MS-DRG 036 with an average length of 
stay of 1.4 days and average costs of $12,621.
    Our clinical advisors stated that MS-DRGs 034, 035, and 036 are 
defined to include only those procedure codes that describe procedures 
that involve dilation of a carotid artery with an intraluminal device. 
Therefore, we are proposing to remove the procedure codes listed in the 
table above from MS-DRGs 034, 035, and 036 that describe procedures 
which (1) do not include an intraluminal device; (2) describe 
procedures performed on arteries other than a carotid; and (3) describe 
procedures performed on a vein.
    The 46 ICD-10-PCS procedure codes listed in the table above are 
also assigned to MS-DRGs 037, 038, and 039 (Extracranial Procedures 
with MCC, with CC, and without CC/MCC, respectively). Therefore, we 
also examined claims data from the September 2018 update of the FY 2018 
MedPAR file for MS-DRGs 037, 038, and 039. Our findings are shown in 
the following table.

                                       MS-DRGs for Extracranial Procedures
----------------------------------------------------------------------------------------------------------------
                                                                     Number of    Average length
                             MS-DRG                                    cases          of stay      Average costs
----------------------------------------------------------------------------------------------------------------
MS-DRG 037--All cases...........................................           3,612             7.1         $23,703
MS-DRG 038--All cases...........................................          11,406             3.1          12,480
MS-DRG 039--All cases...........................................          22,938             1.5           8,400
----------------------------------------------------------------------------------------------------------------

    We found a total of 3,612 cases in MS-DRG 037 with an average 
length of stay of 7.1 days and average costs of $23,703. We found a 
total of 11,406 cases in MS-DRG 038 with an average length of stay of 
3.1 days and average costs of $12,480. We found a total of 22,938 cases 
in MS-DRG 039 with an average length of stay of 1.5 days and average 
costs of $8,400.
    During our review of claims data for MS-DRGs 037, 038, and 039, we 
also discovered 96 ICD-10-PCS procedure codes describing dilation of a 
carotid artery with an intraluminal device that were inadvertently 
included as a result of efforts to replicate the ICD-9 based MS-DRGs. 
These procedure codes are also included in the logic for MS-DRGs 034, 
035, and 036. Under ICD-9-CM, procedure codes 00.61 (Percutaneous 
angioplasty of extracranial vessel(s)) and 00.63 (Percutaneous 
insertion of carotid artery stent(s)) are both required to be reported 
on a claim to identify that a carotid artery stent procedure was 
performed and for assignment of the case to MS-DRGs 034, 035, and 036. 
Procedure code 00.61 is designated as an O.R. procedure, while 
procedure code 00.63 is designated as a non-O.R. procedure. Under ICD-
10-PCS, a carotid artery stent procedure is described by one unique 
code that includes both clinical concepts of the angioplasty (dilation) 
and the insertion of the stent (intraluminal device). This 
``combination code'' under ICD-10-PCS is designated as an O.R. 
procedure. Under ICD-9-CM, procedure code 00.61 reported in the absence 
of procedure code 00.63 results in assignment to MS-DRGs 037, 038, and 
039 according to the MS-DRG logic because procedure code 00.61 has an 
inclusion term for vertebral vessels, as well as for the carotid 
vessels. Therefore, when all of the comparable translations of 
procedure code 00.61 as an O.R. procedure were replicated from the ICD-
9 based MS-DRGs to the ICD-10 based MS-DRGs, this replication 
inadvertently results in the assignment of ICD-10-PCS procedure codes 
that identify and describe a carotid artery stent procedure to MS-DRGs 
037, 038, and 039. Therefore, we are proposing to remove the 96 ICD-10-
PCS procedure codes describing dilation of a carotid artery with an 
intraluminal device from MS-DRGs 037, 038, and 039.
    We also found 6 procedure codes describing dilation of a carotid 
artery with an intraluminal device in MS-DRGs 037, 038, and 039 that 
are not currently assigned to MS-DRGs 034, 035, and 036. Our clinical 
advisors recommended that these 6 procedure codes be reassigned from 
MS-DRGs 037, 038, and 039 to MS-DRGs 034, 035, and 036 because the 6 
procedure codes are consistent with the other procedures describing 
dilation of a carotid artery with an intraluminal device that are 
currently assigned to MS-DRGs 034, 035, and 036. We refer readers to 
Table 6P.1b. associated with this proposed rule (which is available via 
the internet on the CMS website at: http://www.cms.hhs.gov/Medicare/Medicare-Fee-for-Service-Payment/AcuteInpatientPPS/index.html) for the 
complete list of procedure codes that we are proposing to remove from 
MS-DRGs 037, 038, and 039.
    We also note that, as discussed in section II.F.14.f. of the 
preamble of this proposed rule, we are deleting a number of codes that 
include the ICD-10-PCS qualifier term ``bifurcation'' as the result of 
the finalized proposal discussed at the September 11-12, 2018 ICD-10 
Coordination and Maintenance Committee meeting. We refer readers to the 
website at: https://www.cms.gov/Medicare/Coding/ICD9ProviderDiagnosticCodes/ICD-9-CM-C-and-M-Meeting-Materials.html for 
the committee meeting materials and discussion regarding this proposal. 
We note that, of the 96 procedure codes that we are proposing to remove 
from the logic for MS-DRGs 037, 038, and 039, there are 48 procedure 
codes that include the qualifier term ``bifurcation''. Therefore, these 
48 procedure codes will be deleted effective October 1, 2019. The 48 
remaining valid procedure codes that do not include the term 
``bifurcation'' that we are proposing to remove from MS-DRGs 037, 038, 
and 039 will continue to be assigned to MS-DRGs 034, 035, and 036.
    Lastly, if the applicable proposed MS-DRG changes are finalized, we 
would make a conforming change to the ICD-10 MS-DRG Version 37 
Definitions Manual for FY 2020 by combining all the procedure codes 
identifying a carotid artery stent procedure within MS-DRGs 034, 035, 
and 036 into one list entitled ``Operating Room Procedures'' to better 
reflect the

[[Page 19185]]

definition of these MS-DRGs based on the discussion and proposals 
described above.
4. MDC 4 (Diseases and Disorders of the Respiratory System): Pulmonary 
Embolism
    We received a request to reassign three ICD-10-CM diagnosis codes 
for pulmonary embolism with acute cor pulmonale from MS-DRG 176 
(Pulmonary Embolism without MCC) to the higher severity level MS-DRG 
175 (Pulmonary Embolism with MCC). The three diagnosis codes are 
identified in the following table.

------------------------------------------------------------------------
           ICD-10-CM code                      Code description
------------------------------------------------------------------------
I26.01..............................  Septic pulmonary embolism with
                                       acute cor pulmonale.
I26.02..............................  Saddle embolus of pulmonary artery
                                       with acute cor pulmonale.
I26.09..............................  Other pulmonary embolism with
                                       acute cor pulmonale.
------------------------------------------------------------------------

    The requestor noted that, in the FY 2019 IPPS/LTCH PPS final rule 
(83 FR 41231 through 41234), we finalized the proposal to remove the 
special logic in the GROUPER for processing claims containing a code on 
the Principal Diagnosis Is Its Own CC or MCC Lists and deleted the 
relevant tables from the ICD-10 MS-DRG Definitions Manual Version 36, 
effective October 1, 2018. As a result of this change, cases reporting 
any one of the three ICD-10-CM diagnosis codes describing a pulmonary 
embolism with acute cor pulmonale were reassigned from MS-DRG 175 to 
MS-DRG 176, absent a secondary diagnosis code to trigger assignment to 
MS-DRG 175. The requestor stated that this change in the MS-DRG 
assignment for these cases resulted in a reduction in payment for cases 
involving pulmonary embolism with acute cor pulmonale and that the FY 
2019 payment rate for MS-DRG 176 does not appropriately account for the 
costs and resource utilization associated with these cases because the 
subset of patients with pulmonary embolism with acute cor pulmonale 
often represents a more severe set of patients with pulmonary embolism.
    The logic for case assignment to MS-DRGs 175 and 176 is displayed 
in the ICD-10 MS-DRG Version 36 Definitions Manual, which is available 
via the internet on the CMS website at: https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/AcuteInpatientPPS/MS-DRG-Classifications-and-Software.html.
    We analyzed claims data from the September 2018 update of the FY 
2018 MedPAR file for MS-DRGs 175 and 176 to identify cases reporting 
diagnosis codes describing pulmonary embolism with acute cor pulmonale 
as listed above (ICD-10-CM diagnosis codes I26.01, I26.02 or I26.09) as 
the principal diagnosis or as a secondary diagnosis. Our findings are 
shown in the following table.

                                         MS-DRGs for Pulmonary Embolism
----------------------------------------------------------------------------------------------------------------
                                                                     Number of    Average length
                             MS-DRG                                    cases          of stay      Average costs
----------------------------------------------------------------------------------------------------------------
MS-DRG 175--All cases...........................................          24,389             5.2         $10,294
MS-DRG 175--Cases with pulmonary embolism with acute cor                   2,326             5.7          13,034
 pulmonale......................................................
MS-DRG 176--All cases...........................................          30,215             3.3           6,356
MS-DRG 176--Cases with pulmonary embolism with acute cor                   1,821             3.9           9,630
 pulmonale......................................................
----------------------------------------------------------------------------------------------------------------

    As shown in the table, for MS-DRG 175, there was a total of 24,389 
cases with an average length of stay of 5.2 days and average costs of 
$10,294. Of these 24,389 cases, there were 2,326 cases reporting 
pulmonary embolism with acute cor pulmonale, with an average length of 
stay 5.7 days and average costs of $13,034. For MS-DRG 176, there was a 
total of 30,215 cases with an average length of stay of 3.3 days and 
average costs of $6,356. Of these 30,215 cases, there were 1,821 cases 
reporting pulmonary embolism with acute cor pulmonale with an average 
length of stay of 3.9 days and average costs of $9,630.
    As stated in the FY 2019 IPPS/LTCH PPS final rule (83 FR 41231 
through 41234), available ICD-10 data can now be used to evaluate other 
indicators of resource utilization and, as shown by our claims 
analysis, the data indicate that the average costs of cases reporting 
pulmonary embolism or saddle embolus with acute cor pulmonale ($9,630) 
in MS-DRG 176 are closer to the average costs for all pulmonary 
embolism cases in MS-DRG 175 ($10,294) as compared to the average costs 
for all cases in MS-DRG 176 ($6,356). Our clinical advisors also agree 
that this subset of patients with acute cor pulmonale often represents 
a more severe set of patients and that these cases are more 
appropriately assigned to the higher severity level ``with MCC'' MS-
DRG. Therefore, we are proposing to reassign cases reporting diagnosis 
code I26.01, I26.02, or I26.09 to the higher severity level MS-DRG 175 
and to revise the title for MS-DRG 175 to ``Pulmonary Embolism with MCC 
or Acute Cor Pulmonale'' to more accurately reflect the diagnoses 
assigned there.
5. MDC 5 (Diseases and Disorders of the Circulatory System)
a. Transcatheter Mitral Valve Repair With Implant
    As we did for the FY 2015 IPPS/LTCH PPS proposed rule (79 FR 28008 
through 28010) and for the FY 2017 IPPS/LTCH PPS proposed rule (81 FR 
24985 through 24989), for FY 2020, we received a request to modify the 
MS-DRG assignment for transcatheter mitral valve repair (TMVR) with 
implant procedures. ICD-10-PCS procedure code 02UG3JZ (Supplement 
mitral valve with synthetic substitute, percutaneous approach) 
identifies and describes this procedure. This request also included the 
suggestion that CMS give consideration to reclassifying other 
endovascular cardiac valve repair procedures. Specifically, the 
requestor recommended that cases reporting procedure codes describing 
an endovascular cardiac valve repair with implant be reassigned to MS-
DRGs 266 and 267 (Endovascular Cardiac Valve Replacement with and 
without MCC, respectively) and that the MS-DRG titles be revised to 
Endovascular Cardiac Valve Interventions with Implant with and without 
MCC, respectively. We refer readers to detailed discussions of

[[Page 19186]]

the MitraClip[supreg] System (hereafter referred to as 
MitraClip[supreg]) for transcatheter mitral valve repair in previous 
rulemakings, including the FY 2012 IPPS/LTCH PPS proposed rule (76 FR 
25822) and final rule (76 FR 51528 through 51529), the FY 2013 IPPS/
LTCH PPS proposed rule (77 FR 27902 through 27903) and final rule (77 
FR 53308 through 53310), the FY 2015 IPPS/LTCH PPS proposed rule (79 FR 
28008 through 28010) and final rule (79 FR 49889 through 49892), the FY 
2016 IPPS/LTCH PPS proposed rule (80 FR 24356 through 24359) and final 
rule (80 FR 49363 through 49367), and the FY 2017 IPPS/LTCH PPS 
proposed rule (81 FR 24985 through 24989) and final rule (81 FR 56809 
through 56813), in response to requests for MS-DRG reclassification, as 
well as the FY 2014 IPPS/LTCH PPS proposed rule (78 FR 27547 through 
27552), under the new technology add-on payment policy. In the FY 2014 
IPPS/LTCH PPS final rule (78 FR 50575), we were unable to consider 
further the application for a new technology add-on payment for 
MitraClip[supreg] because the technology had not received FDA approval 
by the July 1, 2013 deadline.
    In the FY 2015 IPPS/LTCH PPS final rule, we finalized our proposal 
to not create a new MS-DRG or to reassign cases reporting ICD-9-CM 
procedure code 35.97 that described procedures involving the 
MitraClip[supreg] to another MS-DRG (79 FR 49889 through 49892). Under 
a new application, the request for new technology add-on payments for 
the MitraClip[supreg] System was approved for FY 2015 (79 FR 49941 
through 49946). The new technology add-on payment for MitraClip[supreg] 
was subsequently discontinued effective FY 2017.
    In the FY 2016 IPPS/LTCH PPS final rule (80 FR 49371), we finalized 
a modification to the MS-DRGs to which procedures involving the 
MitraClip[supreg] were assigned. For the ICD-10 based MS-DRGs to fully 
replicate the ICD-9-CM based MS-DRGs, ICD-10-PCS code 02UG3JZ 
(Supplement mitral valve with synthetic substitute, percutaneous 
approach), which identifies the MitraClip[supreg] technology and is the 
ICD-10-PCS code translation for ICD-9-CM procedure code 35.97 
(Percutaneous mitral valve repair with implant), was assigned to new 
MS-DRGs 273 and 274 (Percutaneous Intracardiac Procedures with MCC and 
without MCC, respectively) and continued to be assigned to MS-DRGs 231 
and 232 (Coronary Bypass with PTCA with MCC and without MCC, 
respectively).
    In the FY 2017 IPPS/LTCH PPS proposed and final rules, we also 
discussed our analysis of MS-DRGs 228, 229, and 230 (Other 
Cardiothoracic Procedures with MCC, with CC, and without CC/MCC, 
respectively) with regard to the possible reassignment of cases 
reporting ICD-10-PCS procedure code 02UG3JZ (Supplement mitral valve 
with synthetic substitute, percutaneous approach). We finalized our 
proposal to collapse these MS-DRGs (228, 229, and 230) from three 
severity levels to two severity levels by deleting MS-DRG 230 and 
revising the structure of MS-DRG 229. We also finalized our proposal to 
reassign ICD-10-PCS procedure code 02UG3JZ (Supplement mitral valve 
with synthetic substitute, percutaneous approach) from MS-DRGs 273 and 
274 to MS-DRG 228 and revised MS-DRG 229 (81 FR 56813).
    According to the requestor, there are substantial clinical and 
resource differences between the transcatheter mitral valve repair 
(TMVR) procedure and other procedures currently grouping to MS-DRGs 228 
and 229. The requestor noted that, currently, ICD-10-PCS procedure code 
02UG3JZ is the only endovascular valve intervention with implant 
procedure that maps to MS-DRGs 228 and 229. The requestor also noted 
that other ICD-10-PCS procedure codes describing procedures for 
endovascular (transcatheter) cardiac valve repair with implant map to 
MS-DRGs 273 and 274 or to MS-DRGs 216, 217, 218, 219, 220, and 221 
(Cardiac Valve and Other Major Cardiothoracic Procedures with and 
without Cardiac Catheterization with MCC, with CC and without CC/MCC, 
respectively). The requestor further noted that all ICD-10-PCS 
procedure codes for endovascular cardiac valve replacement procedures 
map to MS-DRGs 266 (Endovascular Cardiac Valve Replacement with MCC) 
and 267 (Endovascular Cardiac Valve Replacement without MCC).
    The ICD-10-PCS procedure codes describing a transcatheter cardiac 
valve repair procedure with an implant are listed in the following 
table.

------------------------------------------------------------------------
           ICD-10-PCS code                        Description
------------------------------------------------------------------------
02UF37J.............................  Supplement aortic valve created
                                       from truncal valve with
                                       autologous tissue substitute,
                                       percutaneous approach.
02UF37Z.............................  Supplement aortic valve with
                                       autologous tissue substitute,
                                       percutaneous approach.
02UF38J.............................  Supplement aortic valve created
                                       from truncal valve with
                                       zooplastic tissue, percutaneous
                                       approach.
02UF38Z.............................  Supplement aortic valve with
                                       zooplastic tissue, percutaneous
                                       approach.
02UF3JJ.............................  Supplement aortic valve created
                                       from truncal valve with synthetic
                                       substitute, percutaneous
                                       approach.
02UF3JZ.............................  Supplement aortic valve with
                                       synthetic substitute,
                                       percutaneous approach.
02UF3KJ.............................  Supplement aortic valve created
                                       from truncal valve with
                                       nonautologous tissue substitute,
                                       percutaneous approach.
02UF3KZ.............................  Supplement aortic valve with
                                       nonautologous tissue substitute,
                                       percutaneous approach.
02UG37E.............................  Supplement mitral valve created
                                       from left atrioventricular valve
                                       with autologous tissue
                                       substitute, percutaneous
                                       approach.
02UG37Z.............................  Supplement mitral valve with
                                       autologous tissue substitute,
                                       percutaneous approach.
02UG38E.............................  Supplement mitral valve created
                                       from left atrioventricular valve
                                       with zooplastic tissue,
                                       percutaneous approach.
02UG38Z.............................  Supplement mitral valve with
                                       zooplastic tissue, percutaneous
                                       approach.
02UG3KE.............................  Supplement mitral valve created
                                       from left atrioventricular valve
                                       with nonautologous tissue
                                       substitute, percutaneous
                                       approach.
02UG3KZ.............................  Supplement mitral valve with
                                       nonautologous tissue substitute,
                                       percutaneous approach.
02UG3JE.............................  Supplement mitral valve created
                                       from left atrioventricular valve
                                       with synthetic substitute,
                                       percutaneous approach.
02UG3JZ.............................  Supplement mitral valve with
                                       synthetic substitute,
                                       percutaneous approach.
02UH37Z.............................  Supplement pulmonary valve with
                                       autologous tissue substitute,
                                       percutaneous approach.
02UH38Z.............................  Supplement pulmonary valve with
                                       zooplastic tissue, percutaneous
                                       approach.
02UH3JZ.............................  Supplement pulmonary valve with
                                       synthetic substitute,
                                       percutaneous approach.
02UH3KZ.............................  Supplement pulmonary valve with
                                       nonautologous tissue substitute,
                                       percutaneous approach.
02UJ37G.............................  Supplement tricuspid valve created
                                       from right atrioventricular valve
                                       with autologous tissue
                                       substitute, percutaneous
                                       approach.
02UJ37Z.............................  Supplement tricuspid valve with
                                       autologous tissue substitute,
                                       percutaneous approach.
02UJ38G.............................  Supplement tricuspid valve created
                                       from right atrioventricular valve
                                       with zooplastic tissue,
                                       percutaneous approach.
02UJ38Z.............................  Supplement tricuspid valve with
                                       zooplastic tissue, percutaneous
                                       approach.
02UJ3JG.............................  Supplement tricuspid valve created
                                       from right atrioventricular valve
                                       with synthetic substitute,
                                       percutaneous approach.
02UJ3JZ.............................  Supplement tricuspid valve with
                                       synthetic substitute,
                                       percutaneous approach.

[[Page 19187]]

 
02UJ3KG.............................  Supplement tricuspid valve created
                                       from right atrioventricular valve
                                       with nonautologous tissue
                                       substitute, percutaneous
                                       approach.
02UJ3KZ.............................  Supplement tricuspid valve with
                                       nonautologous tissue substitute,
                                       percutaneous approach.
------------------------------------------------------------------------

    The ICD-10-PCS procedure codes describing a transcatheter cardiac 
valve replacement procedure are listed in the following table.

------------------------------------------------------------------------
           ICD-10-PCS code                        Description
------------------------------------------------------------------------
02RF37H.............................  Replacement of aortic valve with
                                       autologous tissue substitute,
                                       transapical, percutaneous
                                       approach.
02RF37Z.............................  Replacement of aortic valve with
                                       autologous tissue substitute,
                                       percutaneous approach.
02RF38H.............................  Replacement of aortic valve with
                                       zooplastic tissue, transapical,
                                       percutaneous approach.
02RF38Z.............................  Replacement of aortic valve with
                                       zooplastic tissue, percutaneous
                                       approach.
02RF3JH.............................  Replacement of aortic valve with
                                       synthetic substitute,
                                       transapical, percutaneous
                                       approach.
02RF3JZ.............................  Replacement of aortic valve with
                                       synthetic substitute,
                                       percutaneous approach.
02RF3KH.............................  Replacement of aortic valve with
                                       nonautologous tissue substitute,
                                       transapical, percutaneous
                                       approach.
02RF3KZ.............................  Replacement of aortic valve with
                                       nonautologous tissue substitute,
                                       percutaneous approach.
02RG37H.............................  Replacement of mitral valve with
                                       autologous tissue substitute,
                                       transapical, percutaneous
                                       approach.
02RG37Z.............................  Replacement of mitral valve with
                                       autologous tissue substitute,
                                       percutaneous approach.
02RG38H.............................  Replacement of mitral valve with
                                       zooplastic tissue, transapical,
                                       percutaneous approach.
02RG38Z.............................  Replacement of mitral valve with
                                       zooplastic tissue, percutaneous
                                       approach.
02RG3JH.............................  Replacement of mitral valve with
                                       synthetic substitute,
                                       transapical, percutaneous
                                       approach.
02RG3JZ.............................  Replacement of mitral valve with
                                       synthetic substitute,
                                       percutaneous approach.
02RG3KH.............................  Replacement of mitral valve with
                                       nonautologous tissue substitute,
                                       transapical, percutaneous
                                       approach.
02RG3KZ.............................  Replacement of mitral valve with
                                       nonautologous tissue substitute,
                                       percutaneous approach.
02RH37H.............................  Replacement of pulmonary valve
                                       with autologous tissue
                                       substitute, transapical,
                                       percutaneous approach.
02RH37Z.............................  Replacement of pulmonary valve
                                       with autologous tissue
                                       substitute, percutaneous
                                       approach.
02RH38H.............................  Replacement of pulmonary valve
                                       with zooplastic tissue,
                                       transapical, percutaneous
                                       approach.
02RH38Z.............................  Replacement of pulmonary valve
                                       with zooplastic tissue,
                                       percutaneous approach.
02RH3JH.............................  Replacement of pulmonary valve
                                       with synthetic substitute,
                                       transapical, percutaneous
                                       approach.
02RH3JZ.............................  Replacement of pulmonary valve
                                       with synthetic substitute,
                                       percutaneous approach.
02RH3KH.............................  Replacement of pulmonary valve
                                       with nonautologous tissue
                                       substitute, transapical,
                                       percutaneous approach.
02RH3KZ.............................  Replacement of pulmonary valve
                                       with nonautologous tissue
                                       substitute, percutaneous
                                       approach.
02RJ37H.............................  Replacement of tricuspid valve
                                       with autologous tissue
                                       substitute, transapical,
                                       percutaneous approach.
02RJ37Z.............................  Replacement of tricuspid valve
                                       with autologous tissue
                                       substitute, percutaneous
                                       approach.
02RJ38H.............................  Replacement of tricuspid valve
                                       with zooplastic tissue,
                                       transapical, percutaneous
                                       approach.
02RJ38Z.............................  Replacement of tricuspid valve
                                       with zooplastic tissue,
                                       percutaneous approach.
02RJ3JH.............................  Replacement of tricuspid valve
                                       with synthetic substitute,
                                       transapical, percutaneous
                                       approach.
02RJ3JZ.............................  Replacement of tricuspid valve
                                       with synthetic substitute,
                                       percutaneous approach.
02RJ3KH.............................  Replacement of tricuspid valve
                                       with nonautologous tissue
                                       substitute, transapical,
                                       percutaneous approach.
02RJ3KZ.............................  Replacement of tricuspid valve
                                       with nonautologous tissue
                                       substitute, percutaneous
                                       approach.
X2RF332.............................  Replacement of aortic valve using
                                       zooplastic tissue, rapid
                                       deployment technique,
                                       percutaneous approach, new
                                       technology group 2.
------------------------------------------------------------------------

    The requestor performed its own analyses, first comparing TMVR 
procedures (ICD-10-PCS procedure code 02UG3JZ) to other procedures 
currently assigned to MS-DRGs 228 and 229, as well as to the 
transcatheter cardiac valve replacement procedures in MS-DRGs 266 and 
267. We refer the reader to the ICD-10 MS-DRG Version 36 Definitions 
Manual for complete documentation of the logic for case assignment to 
MS-DRGs 228 and 229 (which is available via the internet on the CMS 
website at: https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/AcuteInpatientPPS/MS-DRG-Classifications-and-Software.html). 
According to the requestor, its findings indicate that TMVR is more 
closely aligned with MS-DRGs 266 and 267 than MS-DRGs 228 and 229 with 
regard to average length of stay and average [standardized] costs. The 
requestor also examined the impact of removing cases reporting a TMVR 
procedure (ICD-10-PCS procedure code 02UG3JZ) from MS-DRGs 228 and 229 
and adding those cases to MS-DRGs 266 and 267. The requestor noted this 
movement would have minimal impact to MS-DRGs 266 and 267 based on its 
analysis. In addition, the requestor stated that its request is in 
alignment with CMS' policy goal of creating and maintaining clinically 
coherent MS-DRGs.
    The requestor acknowledged that CMS has indicated in prior 
rulemaking that TMVR procedures are not clinically similar to 
endovascular cardiac valve replacement procedures, and the requestor 
agreed that they are distinct procedures. However, the requestor also 
believed that TMVR is more similar to the replacement procedures in MS-
DRGs 266 and 267 compared to the other procedures currently assigned to 
MS-DRGs 228 and 229. The requestor provided the following table of 
procedures in volume order (highest to lowest) to illustrate the 
clinical differences between TMVR procedures and other procedures 
currently assigned to MS-DRGs 228 and 229.

----------------------------------------------------------------------------------------------------------------
                                                                            ICD-10-PCS root
            Procedure                  Approach         Anatomy treated        operation       Implanted device
----------------------------------------------------------------------------------------------------------------
TMVR............................  Percutaneous......  Valves............  Supplement........  Substitute.
Destruction.....................  Open..............  Atria.............  Destruction.......  None.

[[Page 19188]]

 
Coronary Atherectomy............  Open..............  Coronary Artery...  Extirpation.......  None.
Insertion.......................  Percutaneous......  Atria or            Insertion.........  Pacemaker or
                                                       Ventricles.                             Intraluminal
                                                                                               Device.
Destruction.....................  Percutaneous......  Atria.............  Destructions......  None.
Structural Heart Repair.........  Open..............  Septum, Heart,      Repair............  None.
                                                       Chordae Tendinae,
                                                       or Papillary
                                                       Muscle.
Structural Heart Excision.......  Open..............  Septum, Atria,      Excision..........  None.
                                                       Ventricles,
                                                       Chordae Tendinae,
                                                       or Papillary
                                                       Muscle.
----------------------------------------------------------------------------------------------------------------

    The requestor noted that, among the procedures listed in the table, 
TMVR is the only procedure that involves treatment of a cardiac valve 
and is the only procedure that involves implanting a synthetic 
substitute.
    To illustrate the similarities between TMVR procedures and 
endovascular cardiac valve replacements in MS-DRGs 266 and 267, the 
requestor provided the following table.

----------------------------------------------------------------------------------------------------------------
                                                                            ICD-10-PCS root
            Procedure                  Approach         Anatomy treated        operation       Implanted device
----------------------------------------------------------------------------------------------------------------
TMVR............................  Percutaneous......  Valves............  Supplement........  Substitute.
Endovascular Cardiac Valve        Percutaneous......  Valves............  Replacement.......  Substitute.
 Replacement.
----------------------------------------------------------------------------------------------------------------

    The requestor noted that both TMVR procedures and endovascular 
cardiac valve replacements use a percutaneous approach, treat cardiac 
valves, and use an implanted device for purposes of improving the 
function of the specified valve. The requestor believed that the 
analyses support the request to group TMVR procedures with endovascular 
cardiac valve replacements from a resource perspective and an 
improvement to clinical coherence could be achieved because TMVR 
procedures are more similar to the endovascular cardiac valve 
replacements compared to the other procedures in MS-DRGs 228 and 229, 
where TMVR is currently assigned.
    As noted earlier in this section, the request also included the 
suggestion that CMS give consideration to reclassifying other 
endovascular cardiac valve repair with implant procedures to MS-DRGs 
266 and 267; specifically, endovascular cardiac valve repair with 
implant procedures involving the aortic, pulmonary, tricuspid and other 
non-TMVR mitral valve procedures that currently group to MS-DRGs 273 
and 274 or MS-DRGs 216, 217, 218, 219, 220 and 221. The requestor 
acknowledged that endovascular cardiac valve repair with implant 
procedures involving these other cardiac valves have lower volumes in 
comparison to the TMVR procedure (ICD-10-PCS procedure code 02UG3JZ), 
which makes analysis of these procedures a little more difficult. 
However, the requestor suggested that movement of these procedures to 
MS-DRGs 266 and 267 would enable the ability to maintain clinical 
coherence for all endovascular cardiac valve interventions. The 
requestor also stated that there is an anticipated increase in the 
volume of not only the TMVR procedure described by ICD-10-PCS procedure 
code 02UG3JZ (which has grown annually since the MitraClip[supreg] was 
approved for new technology add-on payment in FY 2015), but also for 
the other endovascular cardiac valve repair with implant procedures, 
such as those involving the tricuspid valve, which are currently under 
study in the United States and Europe. Based on this anticipated 
increase in volume for endovascular cardiac valve repair with implant 
procedures, the requestor believed that it would be advantageous to 
take this opportunity to restructure the MS-DRGs by moving all the 
endovascular cardiac valve repair with implant procedures to MS-DRGs 
266 and 267 with revised titles as noted previously, to improve 
clinical consistency beginning in FY 2020. The requestor further noted 
that while the requestor believes its request reflects the best 
approach for appropriate MS-DRG assignment for TMVR and other 
endovascular cardiac valve repair with implant procedures, the 
requestor understands that CMS may consider other alternatives.
    We analyzed claims data from the September 2018 update of the FY 
2018 MedPAR file for cases reporting ICD-10-PCS procedure code 02UG3JZ 
in MS-DRGs 228 and 229 as well as cases reporting one of the procedure 
codes listed above describing a transcatheter cardiac valve repair with 
implant procedure in MS-DRGs 216, 217, 218, 219, 220, 221, 273, and 
274. Our findings are shown in the tables below.

                     MS-DRGs for Transcatheter Cardiac Valve Repair With Implant Procedures
----------------------------------------------------------------------------------------------------------------
                                                                     Number of    Average length
                             MS-DRG                                    cases          of stay      Average costs
----------------------------------------------------------------------------------------------------------------
MS-DRG 216--All cases...........................................           5,909              16         $70,435
MS-DRG 216--Cases with procedure codes for transcatheter cardiac              48            12.6          72,556
 valve repair...................................................
MS-DRG 217--All cases...........................................           2,166             9.4          47,299
MS-DRG 217--Cases with procedure codes for transcatheter cardiac              25             3.4          40,707
 valve repair...................................................
MS-DRG 218--All cases...........................................             268             6.8          39,501
MS-DRG 218--Cases with procedure codes for transcatheter cardiac               4             1.3          45,903
 valve repair...................................................
MS-DRG 219--All cases...........................................          15,105            10.9          55,423
MS-DRG 219--Cases with procedure codes for transcatheter cardiac              55             7.1          65,880
 valve repair...................................................

[[Page 19189]]

 
MS-DRG 220--All cases...........................................          15,889             6.6          38,313
MS-DRG 220--Cases with procedure codes for transcatheter cardiac              40               3          38,906
 valve repair...................................................
MS-DRG 221--All cases...........................................           2,652             4.7          33,577
MS-DRG 221--Cases with procedure codes for transcatheter cardiac              13             2.2          29,646
 valve repair...................................................
MS-DRG 228--All cases...........................................           5,583             9.2          46,613
MS-DRG 228--Cases with procedure code 02UG3JZ (Supplement mitral           1,688             5.6          49,569
 valve with synthetic substitute, percutaneous approach)........
MS-DRG 229--All cases...........................................           6,593             4.3          32,322
MS-DRG 229--Cases with procedure code 02UG3JZ (Supplement mitral           2,018             1.7          38,321
 valve with synthetic substitute, percutaneous approach)........
MS-DRG 273--All cases...........................................           7,785             6.9          27,200
MS-DRG 273--Cases with procedure codes for transcatheter cardiac               6             7.5          52,370
 valve repair...................................................
MS-DRG 274--All cases...........................................          20,434             2.3          22,771
MS-DRG 274--Cases with procedure codes for transcatheter cardiac               7             1.4          28,152
 valve repair...................................................
----------------------------------------------------------------------------------------------------------------

    As shown in the table, we found a total of 5,909 cases for MS-DRG 
216 with an average length of stay of 16 days and average costs of 
$70,435. Of those 5,909 cases, there were 48 cases reporting a 
procedure code for a transcatheter cardiac valve repair with an average 
length of stay of 12.6 days and average costs of $72,556. We found a 
total of 2,166 cases for MS-DRG 217 with an average length of stay of 
9.4 days and average costs of $47,299. Of those 2,166 cases, there was 
a total of 25 cases reporting a procedure for a transcatheter cardiac 
valve repair with an average length of stay of 3.4 days and average 
costs of $40,707. We found a total of 268 cases for MS-DRG 218 with an 
average length of stay of 6.8 days and average costs of $39,501. Of 
those 268 cases, there were 4 cases reporting a procedure code for a 
transcatheter cardiac valve repair with an average length of stay of 
1.3 days and average costs of $45,903. We found a total of 15,105 cases 
for MS-DRG 219 with an average length of stay of 10.9 days and average 
costs of $55,423. Of those 15,105 cases, there were 55 cases reporting 
a procedure code for a transcatheter cardiac valve repair with an 
average length of stay of 7.1 days and average costs of $65,880. We 
found a total of 15,889 cases for MS-DRG 220 with an average length of 
stay of 6.6 days and average costs of $38,313. Of those 15,889 cases, 
there were 40 cases reporting a procedure code for a transcatheter 
cardiac valve repair with an average length of stay of 3 days and 
average costs of $38,906. We found a total of 2,652 cases for MS-DRG 
221 with an average length of stay of 4.7 days and average costs of 
$33,577. Of those 2,652 cases, there were 13 cases reporting a 
procedure code for a transcatheter cardiac valve repair with an average 
length of stay of 2.2 days and average costs of $29,646.
    For MS-DRG 228, we found a total of 5,583 cases with an average 
length of stay of 9.2 days and average costs of $46,613. Of those 5,583 
cases, there were 1,688 cases reporting ICD-10-PCS procedure code 
02UG3JZ (Supplement mitral valve with synthetic substitute, 
percutaneous approach) with an average length of stay of 5.6 days and 
average costs of $49,569. As noted previously, ICD-10-PCS procedure 
code 02UG3JZ is the only endovascular cardiac valve repair with implant 
procedure assigned to MS-DRGs 228 and 229. We found a total of 6,593 
cases for MS-DRG 229 with an average length of stay of 4.3 days and 
average costs of $32,322. Of those 6,593 cases, there were 2,018 cases 
reporting ICD-10-PCS procedure code 02UG3JZ with an average length of 
stay of 1.7 days and average costs of $38,321.
    For MS-DRG 273, we found a total of 7,785 cases with an average 
length of stay of 6.9 days and average costs of $27,200. Of those 7,785 
cases, there were 6 cases reporting a procedure code for a 
transcatheter cardiac valve repair with an average length of stay of 
7.5 days and average costs of $52,370. We found a total of 20,434 cases 
in MS-DRG 274 with an average length of stay of 2.3 days and average 
costs of $22,771. Of those 20,434 cases, there were 7 cases reporting a 
procedure code for a transcatheter cardiac valve repair with an average 
length of stay of 1.4 days and average costs of $28,152.
    We also analyzed cases reporting any one of the procedure codes 
listed above describing a transcatheter cardiac valve replacement 
procedure in MS-DRGs 266 and 267. Our findings are shown in the table 
below.

                         MS-DRGs for Transcatheter Cardiac Valve Replacement Procedures
----------------------------------------------------------------------------------------------------------------
                                                                     Number of    Average length
                             MS-DRG                                    cases          of stay      Average costs
----------------------------------------------------------------------------------------------------------------
MS-DRG 266--All cases...........................................          15,079             5.6         $51,402
MS-DRG 267--All cases...........................................          20,845             2.4          41,891
----------------------------------------------------------------------------------------------------------------

    As shown in the table, there was a total of 15,079 cases with an 
average length of stay of 5.6 days and average costs of $51,402 in MS-
DRG 266. For MS-DRG 267, there was a total of 20,845 cases with an 
average length of stay of 2.4 days and average costs of $41,891.
    As stated previously, the requestor noted that ICD-10-PCS procedure 
code 02UG3JZ describing a transcatheter mitral valve repair with 
implant procedure is the only endovascular cardiac valve intervention 
with implant procedure assigned to MS-DRGs 228 and 229. The data 
analysis shows that for the cases reporting procedure code 02UG3JZ in 
MS-DRGs 228 and 229, the average length of stay and average costs are 
aligned with the average length of stay and average costs of cases in 
MS-DRGs 266 and 267, respectively.
    The data also show that, for MS-DRGs 216, 217, 218, 219, 220, and 
221 and for

[[Page 19190]]

MS-DRG 274, the average length of stay for cases reporting a 
transcatheter cardiac valve with implant procedure is shorter than the 
average length of stay for all the cases in their assigned MS-DRG. For 
MS-DRG 273, the average length of stay for cases reporting a 
transcatheter cardiac valve with implant procedure is slightly longer 
(7.5 days versus 6.9 days). In addition, the average costs for the 
cases reporting a transcatheter cardiac valve with implant procedure 
are higher when compared to all the cases in their assigned MS-DRG with 
the exception of MS-DRG 217 ($40,707 versus $47,299) and MS-DRG 221 
($29,646 versus $33,577).
    Our clinical advisors continue to believe that transcatheter 
cardiac valve repair procedures are not the same as a transcatheter 
(endovascular) cardiac valve replacement. However, they agree with the 
requestor and, based on our data analysis, that these procedures are 
more clinically coherent in that they also describe endovascular 
cardiac valve interventions with implants and are similar in terms of 
average length of stay and average costs to cases in MS-DRGs 266 and 
267 when compared to other procedures in their current MS-DRG 
assignment. For these reasons, our clinical advisors agree that we 
should propose to reassign the endovascular cardiac valve repair 
procedures (supplement procedures) listed previously to the 
endovascular cardiac valve replacement MS-DRGs.
    We analyzed the impact of grouping the endovascular cardiac valve 
repair with implant (supplement) procedures with the endovascular 
cardiac valve replacement procedures. The following table reflects our 
findings for the proposed revised endovascular cardiac valve 
(supplement) procedures with the endovascular cardiac valve replacement 
MS-DRGs with a 2-way severity level split.

          Proposed Revised MS-DRGs for Endovascular Cardiac Valve Replacement and Supplement Procedures
----------------------------------------------------------------------------------------------------------------
                                                                     Number of    Average length
                             MS-DRG                                    cases          of stay      Average costs
----------------------------------------------------------------------------------------------------------------
MS-DRG 266 (Endovascular Cardiac Valve Replacement and                    16,922             5.7         $51,564
 Supplement Procedures with MCC)................................
MS-DRG 267 (Endovascular Cardiac Valve Replacement and                    22,958             2.4         41,563.
 Supplement Procedures without MCC).............................
----------------------------------------------------------------------------------------------------------------

    As shown in the table, there was a total of 16,922 cases for the 
endovascular cardiac valve replacement and supplement procedures with 
MCC group, with an average length of stay of 5.7 days and average costs 
of $51,564. There was a total of 22,958 cases for the endovascular 
cardiac valve replacement and supplement procedures without MCC group, 
with an average length of stay of 2.4 days and average costs of 
$41,563. We applied the criteria to create subgroups for the two-way 
severity level split for the proposed revised MS-DRGs and found that 
all five criteria were met. For the proposed revised MS-DRGs, there is 
at least (1) 500 or more cases in the MCC group or in the without MCC 
subgroup; (2) 5 percent or more of the cases in the MCC group or in the 
without MCC subgroup; (3) a 20 percent difference in average costs 
between the MCC group and the without MCC group; (4) a $2,000 
difference in average costs between the MCC group and the without MCC 
group; and (5) a 3-percent reduction in cost variance, indicating that 
the proposed severity level splits increase the explanatory power of 
the base MS-DRG in capturing differences in expected cost between the 
proposed MS-DRG severity level splits by at least 3 percent and thus 
improve the overall accuracy of the IPPS payment system.
    During our review of the transcatheter cardiac valve repair 
(supplement) procedures in MS-DRGs 216, 217, 218, 219, 220, and 221, 
MS-DRGs 228 and 229, and MS-DRGs 273 and 274, our clinical advisors 
recommended that we also analyze the claims data to identify other 
(non-supplement) transcatheter (endovascular) procedures that involve 
the cardiac valves and are assigned to those same MS-DRGs to determine 
if additional modifications may be warranted, consistent with our 
ongoing efforts to refine the ICD-10 MS-DRGs.
    We analyzed the following ICD-10-PCS procedure codes that are 
currently assigned to MS-DRGs 216, 217, 218, 219, 220, and 221.

------------------------------------------------------------------------
           ICD-10-PCS code                        Description
------------------------------------------------------------------------
02QF3ZJ.............................  Repair aortic valve created from
                                       truncal valve, percutaneous
                                       approach.
02QF3ZZ.............................  Repair aortic valve, percutaneous
                                       approach.
02QG3ZE.............................  Repair mitral valve created from
                                       left atrioventricular valve,
                                       percutaneous approach.
02QG3ZZ.............................  Repair mitral valve, percutaneous
                                       approach.
02QH3ZZ.............................  Repair pulmonary valve,
                                       percutaneous approach.
02QJ3ZG.............................  Repair tricuspid valve created
                                       from right atrioventricular
                                       valve, percutaneous approach.
02QJ3ZZ.............................  Repair tricuspid valve,
                                       percutaneous approach.
02TH3ZZ.............................  Resection of pulmonary valve,
                                       percutaneous approach.
02VG3ZZ.............................  Restriction of mitral valve,
                                       percutaneous approach.
02WF38Z.............................  Revision of zooplastic tissue in
                                       aortic valve, percutaneous
                                       approach.
02WF3JZ.............................  Revision of synthetic substitute
                                       in aortic valve, percutaneous
                                       approach.
02WF3KZ.............................  Revision of nonautologous tissue
                                       substitute in aortic valve,
                                       percutaneous approach.
02WG37Z.............................  Revision of autologous tissue
                                       substitute in mitral valve,
                                       percutaneous approach.
02WG38Z.............................  Revision of zooplastic tissue in
                                       mitral valve, percutaneous
                                       approach.
02WG3JZ.............................  Revision of synthetic substitute
                                       in mitral valve, percutaneous
                                       approach.
02WG3KZ.............................  Revision of nonautologous tissue
                                       substitute in mitral valve,
                                       percutaneous approach.
02WH37Z.............................  Revision of autologous tissue
                                       substitute in pulmonary valve,
                                       percutaneous approach.
02WH38Z.............................  Revision of zooplastic tissue in
                                       pulmonary valve, percutaneous
                                       approach.
02WH3JZ.............................  Revision of synthetic substitute
                                       in pulmonary valve, percutaneous
                                       approach.
02WH3KZ.............................  Revision of nonautologous tissue
                                       substitute in pulmonary valve,
                                       percutaneous approach.
02WJ37Z.............................  Revision of autologous tissue
                                       substitute in tricuspid valve,
                                       percutaneous approach.

[[Page 19191]]

 
02WJ38Z.............................  Revision of zooplastic tissue in
                                       tricuspid valve, percutaneous
                                       approach.
02WJ3JZ.............................  Revision of synthetic substitute
                                       in tricuspid valve, percutaneous
                                       approach.
02WJ3KZ.............................  Revision of nonautologous tissue
                                       substitute in tricuspid valve,
                                       percutaneous approach.
------------------------------------------------------------------------

    We also analyzed ICD-10-PCS procedure code 02TH3ZZ (Resection of 
pulmonary valve, percutaneous approach) that is currently assigned to 
MS-DRGs 228 and 229. Lastly, we analyzed the following ICD-10-PCS 
procedure codes that are currently assigned to MS-DRGs 273 and 274.

------------------------------------------------------------------------
           ICD-10-PCS code                        Description
------------------------------------------------------------------------
025F3ZZ.............................  Destruction of aortic valve,
                                       percutaneous approach.
025G3ZZ.............................  Destruction of mitral valve,
                                       percutaneous approach.
025H3ZZ.............................  Destruction of pulmonary valve,
                                       percutaneous approach.
025J3ZZ.............................  Destruction of tricuspid valve,
                                       percutaneous approach.
027F34Z.............................  Dilation of aortic valve with drug-
                                       eluting intraluminal device,
                                       percutaneous approach.
027F3DZ.............................  Dilation of aortic valve with
                                       intraluminal device, percutaneous
                                       approach.
027F3ZZ.............................  Dilation of aortic valve,
                                       percutaneous approach.
027G34Z.............................  Dilation of mitral valve with drug-
                                       eluting intraluminal device,
                                       percutaneous approach.
027G3DZ.............................  Dilation of mitral valve with
                                       intraluminal device, percutaneous
                                       approach.
027G3ZZ.............................  Dilation of mitral valve,
                                       percutaneous approach.
027H34Z.............................  Dilation of pulmonary valve with
                                       drug-eluting intraluminal device,
                                       percutaneous approach.
027H3DZ.............................  Dilation of pulmonary valve with
                                       intraluminal device, percutaneous
                                       approach.
027H3ZZ.............................  Dilation of pulmonary valve,
                                       percutaneous approach.
027J34Z.............................  Dilation of tricuspid valve with
                                       drug-eluting intraluminal device,
                                       percutaneous approach.
027J3DZ.............................  Dilation of tricuspid valve with
                                       intraluminal device, percutaneous
                                       approach.
027J3ZZ.............................  Dilation of tricuspid valve,
                                       percutaneous approach.
02BF3ZZ.............................  Excision of aortic valve,
                                       percutaneous approach.
02BG3ZZ.............................  Excision of mitral valve,
                                       percutaneous approach.
02BH3ZZ.............................  Excision of pulmonary valve,
                                       percutaneous approach.
02BJ3ZZ.............................  Excision of tricuspid valve,
                                       percutaneous approach.
------------------------------------------------------------------------

    We analyzed claims data from the September 2018 update of the FY 
2018 MedPAR file for cases reporting any of the above listed procedure 
codes in MS-DRGs 216, 217, 218, 219, 220, and 221, MS-DRGs 228 and 229, 
and MS-DRGs 273 and 274. Our findings are shown in the following 
tables. We note that there were no cases found in MS-DRGs 228 and 229 
reporting ICD-10-PCS procedure code 02TH3ZZ (Resection of pulmonary 
valve, percutaneous approach).

                            Other Cardiac Valve Procedures in MS-DRGs 216 Through 221
----------------------------------------------------------------------------------------------------------------
                                                                     Number of    Average length
        ICD-10-PCS code                    Description            times reported      of stay      Average costs
----------------------------------------------------------------------------------------------------------------
02QF3ZZ........................  Repair aortic valve,                         58             9.7         $33,588
                                  percutaneous approach.
02QG3ZE........................  Repair mitral valve created                   4             1.3          38,680
                                  from left atrioventricular
                                  valve, percutaneous approach.
02QG3ZZ........................  Repair mitral valve,                         40             3.4          30,160
                                  percutaneous approach.
02QH3ZZ........................  Repair pulmonary valve,                       1               1          33,014
                                  percutaneous approach.
02QJ3ZG........................  Repair tricuspid valve created                1               9          51,294
                                  from right atrioventricular
                                  valve, percutaneous approach.
02QJ3ZZ........................  Repair tricuspid valve,                      15               5          25,208
                                  percutaneous approach.
02VG3ZZ........................  Restriction of mitral valve,                 11             8.1          53,798
                                  percutaneous approach.
02WF38Z........................  Revision of zooplastic tissue                26             8.9          61,124
                                  in aortic valve, percutaneous
                                  approach.
02WF3JZ........................  Revision of synthetic                        37             7.1          26,605
                                  substitute in aortic valve,
                                  percutaneous approach.
02WF3KZ........................  Revision of nonautologous                     2               1          69,030
                                  tissue substitute in aortic
                                  valve, percutaneous approach.
02WG38Z........................  Revision of zooplastic tissue                 2             7.5          16,982
                                  in mitral valve, percutaneous
                                  approach.
02WG3JZ........................  Revision of synthetic                        31             7.3          28,682
                                  substitute in mitral valve,
                                  percutaneous approach.
02WH3JZ........................  Revision of synthetic                         1               6          30,340
                                  substitute in pulmonary valve,
                                  percutaneous approach.
02WJ3JZ........................  Revision of synthetic                         1               3          14,145
                                  substitute in tricuspid valve,
                                  percutaneous approach.
                                                                 -----------------------------------------------
    Total......................  ...............................             230             7.1          34,968
----------------------------------------------------------------------------------------------------------------


                              Other Cardiac Valve Procedures in MS-DRGs 273 and 274
----------------------------------------------------------------------------------------------------------------
                                                                     Number of    Average length
        ICD-10-PCS code                    Description            times reported      of stay      Average costs
----------------------------------------------------------------------------------------------------------------
025F3ZZ........................  Destruction of aortic valve,                  6             4.7         $11,130
                                  percutaneous approach.

[[Page 19192]]

 
025J3ZZ........................  Destruction of tricuspid valve,              21             3.9          18,320
                                  percutaneous approach.
027F34Z........................  Dilation of aortic valve with                 1              16          53,786
                                  drug-eluting intraluminal
                                  device, percutaneous approach.
027F3DZ........................  Dilation of aortic valve with                 5             8.4          20,951
                                  intraluminal device,
                                  percutaneous approach.
027F3ZZ........................  Dilation of aortic valve,                 1,720             8.6          25,265
                                  percutaneous approach.
027G3ZZ........................  Dilation of mitral valve,                    86             6.4          19,791
                                  percutaneous approach.
027H3ZZ........................  Dilation of pulmonary valve,                  5             3.8          10,506
                                  percutaneous approach.
02BJ3ZZ........................  Excision of tricuspid valve,                  1               4          30,843
                                  percutaneous approach.
                                                                 -----------------------------------------------
    Total......................  ...............................           1,845             8.4          24,851
----------------------------------------------------------------------------------------------------------------

    We found that the overall frequency with which cases reporting at 
least one of the above ICD-10-PCS procedure codes were reflected in the 
claims data was 2,075 times with an average length of stay of 8.5 days 
and average costs of $27,838. ICD-10-PCS procedure code 027F3ZZ 
(Dilation of aortic valve, percutaneous approach) had the highest 
frequency of 1,720 times with an average length of stay of 8.6 days and 
average costs of $25,265. We also found that cases reporting ICD-10-PCS 
procedure code 02WF3KZ (Revision of nonautologous tissue substitute in 
aortic valve, percutaneous approach) had the highest average costs of 
$69,030 with an average length of stay of 1 day. While not displayed 
above, we also note that, of the 7,785 cases found in MS-DRG 273, from 
the remaining procedure codes describing procedures other than those 
performed on a cardiac valve, there were 4,920 cases reporting ICD-10-
PCS procedure code 02583ZZ (Destruction of conduction mechanism, 
percutaneous approach) with an average length of stay of 6.6 days and 
average costs of $26,800, representing approximately 63 percent of all 
the cases in that MS-DRG. In addition, of the 20,434 cases in MS-DRG 
274, from the remaining procedure codes describing procedures other 
than those performed on a cardiac valve, there were 9,268 cases 
reporting ICD-10-PCS procedure code 02583ZZ (Destruction of conduction 
mechanism, percutaneous approach) with an average length of stay of 3.2 
days and average costs of $21,689, and 8,775 cases reporting ICD-10-PCS 
procedure code 02L73DK (Occlusion of left atrial appendage with 
intraluminal device, percutaneous approach) with an average length of 
stay of 1.2 days and average costs of $25,476, representing 
approximately 88 percent of all the cases in that MS-DRG.
    After analyzing the claims data to identify the overall frequency 
with which the other (non-supplement) ICD-10-PCS procedure codes 
describing a transcatheter (endovascular) cardiac valve procedure were 
reported and assigned to MS-DRGs 216, 217, 218, 219, 220, and 221, MS-
DRGs 228 and 229, and MS-DRGs 273 and 274, our clinical advisors 
suggested that these other cardiac valve procedures should be grouped 
together because the procedure codes are describing procedures 
performed on a cardiac valve with a percutaneous (transcatheter/
endovascular) approach, they can be performed in a cardiac 
catheterization laboratory, they require that the interventional 
cardiologist have special additional training and skills, and often 
require additional ancillary procedures and equipment, such as trans-
esophageal echocardiography, be available at the time of the procedure. 
Our clinical advisors noted that these procedures are generally 
considered more complicated and resource-intensive, and form a 
clinically coherent group. They also noted that the majority of 
procedures currently being reported in MS-DRGs 273 and 274 are 
procedures other than those involving a cardiac valve and, therefore, 
believed that reassignment of the other (non-supplement) ICD-10-PCS 
procedure codes describing a transcatheter (endovascular) cardiac valve 
procedure would have minimal impact to those MS-DRGs.
    We then analyzed the impact of grouping the other transcatheter 
cardiac valve procedures. The following table reflects our findings for 
the suggested other endovascular cardiac valve procedures MS-DRGs with 
a 2-way severity level split.

                        Suggested MS-DRGs for Other Endovascular Cardiac Valve Procedures
----------------------------------------------------------------------------------------------------------------
                                                                     Number of    Average length
                             MS-DRG                                    cases          of stay      Average costs
----------------------------------------------------------------------------------------------------------------
MS-DRG XXX (Other Endovascular Cardiac Valve Procedures with               1,527             9.7         $27,801
 MCC)...........................................................
MS-DRG XXX (Other Endovascular Cardiac Valve Procedures without              560             3.9          17,027
 MCC)...........................................................
----------------------------------------------------------------------------------------------------------------

    As shown in the table, there were 1,527 cases for the other 
endovascular cardiac valve procedures with MCC group, with an average 
length of stay of 9.7 days and average costs of $27,801. There was a 
total of 560 cases for the other endovascular cardiac valve procedures 
without MCC group, with an average length of stay of 3.9 days and 
average costs of $17,027. We applied the criteria to create subgroups 
for the two-way severity level split for the suggested MS-DRGs and 
found that all five criteria were met. For the suggested MS-DRGs, there 
is at least (1) 500 or more cases in the MCC group or in the without 
MCC subgroup; (2) 5 percent or more of the cases in the MCC group or in 
the without MCC subgroup; (3) a 20 percent difference in average costs 
between the MCC group and the without MCC group; (4) at least a $2,000 
difference in average costs between the MCC group and the without MCC 
group; and (5) a 3-percent reduction in cost variance, indicating that 
the proposed severity level splits increase the explanatory power of 
the base MS-DRG in capturing differences in expected cost between the 
proposed MS-DRG severity level splits by at least 3 percent and thus 
improve the overall accuracy of the IPPS payment system.

[[Page 19193]]

    For FY 2020, we are proposing to modify the structure of MS-DRGs 
266 and 267 by reassigning the procedure codes describing a 
transcatheter cardiac valve repair (supplement) procedure from the list 
above and to revise the title of these MS-DRGs. We are proposing to 
revise the title of MS-DRGs 266 from ``Endovascular Cardiac Valve 
Replacement with MCC'' to ``Endovascular Cardiac Valve Replacement and 
Supplement Procedures with MCC'' and the title of MS-DRG 267 from 
``Endovascular Cardiac Valve Replacement without MCC'' to 
``Endovascular Cardiac Valve Replacement and Supplement Procedures 
without MCC'', to reflect the proposed restructuring. We also are 
proposing to create two new MS-DRGs with a two-way severity level split 
for the remaining (non-supplement) transcatheter cardiac valve 
procedures listed above. These proposed new MS-DRGs are proposed new 
MS-DRG 319 (Other Endovascular Cardiac Valve Procedures with MCC) and 
proposed new MS-DRG 320 (Other Endovascular Cardiac Valve Procedures 
without MCC), which would also conform with the severity level split of 
MS-DRGs 266 and 267. We are proposing to reassign the procedure codes 
from their current MS-DRGs to the proposed new MS-DRGs.
b. Revision of Pacemaker Lead
    In the FY 2019 IPPS/LTCH PPS final rule (83 FR 41189 through 
41190), we finalized our proposal to maintain the Version 35 ICD-10 MS-
DRG GROUPER logic for the Version 36 ICD-10 MS-DRG GROUPER logic within 
MS-DRGs 260, 261, and 262 (Cardiac Pacemaker Revision Except Device 
Replacement with MCC, with CC and without CC/MCC, respectively) so that 
cases reporting any of the ICD-10-PCS procedure codes describing 
procedures involving pacemakers and related procedures and associated 
devices would continue to be assigned to those MS-DRGs under MDC 5 
because they are reported when a pacemaker device requires revision and 
they have a corresponding circulatory system diagnosis. We also 
discussed and finalized the addition of ICD-10-PCS procedure codes 
02H63MZ (Insertion of cardiac lead into right atrium, percutaneous 
approach) and 02H73MZ (Insertion of cardiac lead into left atrium, 
percutaneous approach) to the GROUPER logic as non-O.R. procedures that 
impact the MS-DRG assignment when reported as stand-alone codes for the 
insertion of a pacemaker lead within MS-DRGs 260, 261, and 262 in 
response to a commenter's suggestion.
    After publication of the FY 2019 IPPS/LTCH PPS final rule, it was 
brought to our attention that ICD-10-PCS procedure code 02H60JZ 
(Insertion of pacemaker lead into right atrium, open approach) was 
inadvertently omitted from the GROUPER logic for MS-DRGs 260, 261, and 
262. This procedure code is designated as a non-O.R. procedure. 
However, we note that, within MDC 5, in MS-DRGs 242, 243, and 244, this 
procedure code is part of a code pair that requires another procedure 
code (cluster). We are proposing to add procedure code 02H60JZ to the 
list of non-O.R. procedures that would impact MS-DRGs 260, 261, and 262 
when reported as a stand-alone procedure code, consistent with ICD-10-
PCS procedure codes 02H63JZ (Insertion of pacemaker lead into right 
atrium, percutaneous approach) and 02H64JZ (Insertion of pacemaker lead 
into right atrium, percutaneous endoscopic approach), which also 
describe the insertion of a pacemaker lead into the right atrium. If 
the proposal is finalized, we would make conforming changes to the ICD-
10 MS-DRG Definitions Manual Version 37.
6. MDC 8 (Diseases and Disorders of the Musculoskeletal System and 
Connective Tissue)
a. Knee Procedures With Principal Diagnosis of Infection
    We received a request to add ICD-10-CM diagnosis codes M00.9 
(Pyogenic arthritis, unspecified) and A54.42 (Gonococcal arthritis) to 
the list of principal diagnoses for MS-DRGs 485, 486, and 487 (Knee 
Procedure with Principal Diagnosis of Infection with MCC, with CC, and 
without CC/MCC, respectively) in MDC 8. The requestor believed that 
adding diagnosis code M00.9 is necessary to accurately recognize knee 
procedures that are performed with a principal diagnosis of infectious 
arthritis, including those procedures performed when the specific 
infectious agent is unknown. The requestor stated that, currently, only 
diagnosis codes describing infections caused by a specific bacterium 
are included in MS-DRGs 485, 486, and 487. The requestor stated that 
additional diagnosis codes such as M00.9 are indicated for knee 
procedures performed as a result of infection because pyogenic 
arthritis can reasonably be diagnosed based on the patient's history 
and clinical symptoms, even if a bacterial infection is not confirmed 
by culture. For example, the requestor noted that a culture may present 
negative for infection if a patient has been treated with antibiotics 
prior to knee surgery, but other clinical signs may indicate a 
principal diagnosis of joint infection. In the absence of a culture 
identifying an infection by a specific bacterium, the requestor stated 
that ICD-10-CM diagnosis code M00.09 should also be included as a 
principal diagnosis in MS-DRGs 485, 486, and 487.
    The requestor also asserted that ICD-10-CM diagnosis code A54.42 
should be added to the list of principal diagnoses for MS-DRGs 485, 
486, and 487 because gonococcal arthritis is also an infectious type of 
arthritis that can be an indication for a knee procedure.
    Currently, cases reporting ICD-10-CM diagnosis codes M00.9 or 
A54.42 as a principal diagnosis group to MS-DRGs 488 and 489 (Knee 
Procedures without Principal Diagnosis of Infection with and without 
CC/MCC, respectively) when a knee procedure is also reported on the 
claim.
    We analyzed claims data from the September 2018 update of the FY 
2018 MedPAR file for ICD-10-CM diagnosis codes M00.9 and A54.42, which 
are currently assigned to medical MS-DRGs 548, 549, and 550 (Septic 
Arthritis with MCC, with CC, and without CC/MCC, respectively) in the 
absence of a surgical procedure. Our findings are shown in the 
following table.

                  MS-DRGs for Septic Arthritis With Pyogenic Arthritis or Gonococcal Arthritis
----------------------------------------------------------------------------------------------------------------
                                                                     Number of    Average length
                             MS-DRG                                    cases          of stay      Average costs
----------------------------------------------------------------------------------------------------------------
MS-DRG 548--All cases...........................................             601             8.1         $13,974
MS-DRG 548--Cases with pyogenic arthritis as principal diagnosis             312             7.6          13,177
MS-DRG 549--All cases...........................................           1,169             5.0           8,547
MS-DRG 549--Cases with pyogenic arthritis as principal diagnosis             686             4.7           7,976
MS-DRG 549--Cases with gonococcal arthritis as principal                       2             8.0           7,070
 diagnosis......................................................
MS-DRG 550--All cases...........................................             402             3.5           6,317

[[Page 19194]]

 
MS-DRG 550--Cases with pyogenic arthritis as principal diagnosis             260             3.2           6,209
MS-DRG 550--Cases with gonococcal arthritis as principal                       3             2.3           3,929
 diagnosis......................................................
----------------------------------------------------------------------------------------------------------------

    As shown in the table, we found a total of 2,172 cases in MS-DRGs 
548, 549, and 550. A total of 601 cases were reported in MS-DRG 548, 
with an average length of stay of 8.1 days and average costs of 
$13,974. Cases in MS-DRG 548 with a principal diagnosis of pyogenic 
arthritis (ICD-10-CM diagnosis code M00.9) accounted for 312 of these 
601 cases, and reported an average length of stay of 7.6 days and 
average costs of $13,177. None of the cases in MS-DRG 548 had a 
principal diagnosis of gonococcal arthritis (ICD-10-CM diagnosis code 
A54.42).
    The total number of cases reported in MS-DRG 549 was 1,169, with an 
average length of stay of 5 days and average costs of $8,547. Within 
this MS-DRG, 686 cases had a principal diagnosis described by ICD-10-CM 
diagnosis code M00.9, with an average length of stay of 4.7 days and 
average costs of $7,976. Two of the cases reported in MS-DRG 549 had a 
principal diagnosis described by ICD-10-CM diagnosis code A54.42. These 
2 cases had an average length of stay of 8 days and average costs of 
$7,070.
    The total number of cases reported in MS-DRG 550 was 402, with an 
average length of stay of 3.5 days and average costs of $6,317. Within 
this MS-DRG, 260 cases had a principal diagnosis described by ICD-10-CM 
diagnosis code M00.9 with an average length of stay of 3.2 days and 
average costs of $6,209. Three of the cases reported in MS-DRG 550 had 
a principal diagnosis described by ICD-10-CM diagnosis code A54.42. 
These 3 cases had an average length of stay of 2.3 days and average 
costs of $3,929.
    In summary, for MS-DRGs 548, 549, and 550, there were 1,258 cases 
that reported ICD-10-CM diagnosis code M00.9 as the principal diagnosis 
and 5 cases that reported ICD-10-CM diagnosis code A54.42 as the 
principal diagnosis. We note that, overall, our data analysis suggests 
that the MS-DRG assignment for cases reporting ICD-10-CM diagnosis 
codes M00.9 and A54.42 is appropriate based on the average costs and 
average length of stay. However, it is unclear how many of these cases 
involved infected knee joints because neither ICD-10-CM diagnosis code 
M00.9 nor A54.42 is specific to the knee. We then analyzed claims data 
for MS-DRGs 485, 486, and 487 (Knee Procedures with Principal Diagnosis 
of Infection with MCC, with CC, and without CC/MCC, respectively) and 
for MS-DRGs 488 and 489 (Knee Procedures without Principal Diagnosis of 
Infection with and without CC/MCC, respectively). For MS-DRGs 488 and 
489, we also analyzed claims data for cases reporting a knee procedure 
with ICD-10-CM diagnosis code M00.9 or A54.42 as a principal diagnosis, 
as these are the MS-DRGs to which such cases would currently group. Our 
findings are shown in the following table.

                             MS-DRGs for Knee Procedures With and Without Infection
----------------------------------------------------------------------------------------------------------------
                                                                     Number of    Average length
                             MS-DRG                                    cases          of stay      Average costs
----------------------------------------------------------------------------------------------------------------
MS-DRG 485--All cases...........................................           1,021             9.7         $23,980
MS-DRG 486--All cases...........................................           2,260               6          16,060
MS-DRG 487--All cases...........................................             614             4.2          12,396
MS-DRG 488--All cases...........................................           2,857             4.8          14,197
MS-DRG 488--Cases with pyogenic arthritis as principal diagnosis             524             7.1          16,894
MS-DRG 489--All cases...........................................           2,416             2.4           9,217
MS-DRG 489--Cases with pyogenic arthritis as principal diagnosis             195             4.1           9,526
MS-DRG 489--Cases with gonococcal arthritis as principal                       1               8          10,810
 diagnosis......................................................
----------------------------------------------------------------------------------------------------------------

    As shown in the table, we found a total of 1,021 cases reported in 
MS-DRG 485, with an average length of stay of 9.7 days and average 
costs of $23,980. We found a total of 2,260 cases reported in MS-DRG 
486, with an average length of stay of 6.0 days and average costs of 
$16,060. The total number of cases reported in MS-DRG 487 was 614, with 
an average length of stay of 4.2 days and average costs of $12,396. For 
MS-DRG 488, we found a total of 2,857 cases with an average length of 
stay of 4.8 days and average costs of $14,197. Of these 2,857 cases, we 
found 524 cases that reported a principal diagnosis of pyogenic 
arthritis (ICD-10-CM diagnosis code M00.9), with an average length of 
stay of 7.1 days and average costs of $16,894. There were no cases 
found that reported a principal diagnosis of gonococcal arthritis (ICD-
10-CM diagnosis code A54.42). For MS-DRG 489, we found a total of 2,416 
cases with an average length of stay of 2.4 days and average costs of 
$9,217. Of these 2,416 cases, we found 195 cases that reported a 
principal diagnosis of pyogenic arthritis (ICD-10-CM diagnosis code 
M00.9), with an average length of stay of 4.1 days and average costs of 
$9,526. We found 1 case that reported a principal diagnosis of 
gonococcal arthritis (ICD-10-CM diagnosis code A54.42) in MS-DRG 489, 
with an average length of stay of 8 days and average costs of $10,810.
    Upon review of the data, we noted that the average costs and 
average length of stay for cases reporting a principal diagnosis of 
pyogenic arthritis (ICD-10-CM diagnosis code M00.9) in MS-DRG 488 are 
higher than the average costs and average length of stay for all cases 
in MS-DRG 488. We found similar results for MS-DRG 489 for the cases 
reporting diagnosis code M00.9 or A54.42 as the principal diagnosis.
    As stated earlier, the requestor recommended that ICD-10-CM 
diagnosis codes M00.9 and A54.42 be added to the list of principal 
diagnoses in MS-DRGs 485, 486, and 487 to recognize knee procedures 
that are performed with a principal diagnosis of an infectious type of 
arthritis. Because these diagnosis codes are not specific to the knee 
in the code description, we

[[Page 19195]]

examined the ICD-10-CM Alphabetic Index to review the entries that 
refer and correspond to these diagnosis codes. Specifically, we 
searched the Index for codes M00.9 and A54.42 and found the following 
entries.
[GRAPHIC] [TIFF OMITTED] TP03MY19.000

    Our clinical advisors agreed that the results of our ICD-10-CM 
Alphabetic Index review combined with the data analysis results support 
the addition of ICD-10-CM diagnosis code M00.9 to the list of principal 
diagnoses of infection for MS-DRGs 485, 486, and 487. The entries for 
diagnosis code M00.9 include infection of the knee, and as discussed 
above, in our data analysis, we found cases reporting ICD-10-CM 
diagnosis code M00.9 as a principal diagnosis in MS-DRGs 488 and 489, 
indicating that knee procedures are, in fact, being performed for an 
infectious arthritis of the knee. In addition, the average costs for 
cases reporting a principal diagnosis code of pyogenic arthritis (ICD-
10-CM diagnosis code M00.9) in MS-DRG 488 are similar to the average 
costs of cases in MS-DRG 486 ($16,894 and $16,060, respectively). 
Because MS-DRG 488 includes cases with a CC or an MCC, we reviewed how 
many of the 524 cases reporting a principal diagnosis code of pyogenic 
arthritis (ICD-10-CM diagnosis code M00.9) were reported with a CC or 
an MCC. We found that there were 361 cases reporting a CC with an 
average length of stay of 6 days and average costs of $14,092 and 163 
cases reporting an MCC with an average length of stay of 9.5 days and 
average costs of $23,100. Therefore, the cases in MS-DRG 488 reporting 
a principal diagnosis code of pyogenic arthritis (ICD-10-CM diagnosis 
code M00.9) with an MCC have average costs that are consistent with the 
average costs of cases in MS-DRG 485 ($23,100 and $23,980, 
respectively), and the cases with a CC have average costs that are 
consistent with the average costs of cases in MS-DRG 486 ($14,092 and 
$16,060, respectively), as noted above.

[[Page 19196]]

We also note that the average length of stay for cases reporting a 
principal diagnosis code of pyogenic arthritis (ICD-10-CM diagnosis 
code M00.9) with an MCC in MS-DRG 488 is similar to the average length 
of stay for cases in MS-DRG 485 (9.5 days and 9.7 days, respectively), 
and the cases with a CC have an average length of stay that is 
equivalent to the average length of stay for cases in MS-DRG 486 (6 
days and 6 days, respectively). We further note that the average length 
of stay for cases reporting a principal diagnosis code of pyogenic 
arthritis (ICD-10-CM diagnosis code M00.9) in MS-DRG 489 is similar to 
the average length of stay for cases in MS DRG 487 (4.1 days and 4.2 
days, respectively). Lastly, the average costs for cases reporting a 
principal diagnosis code of pyogenic arthritis (ICD-10-CM diagnosis 
code M00.9) in MS-DRG 489 are consistent with the average costs for 
cases in MS-DRG 487 ($9,526 and $12,396, respectively), with a 
difference of $2,870. For these reasons, we are proposing to add ICD-
10-CM diagnosis code M00.9 to the list of principal diagnosis codes for 
MS-DRGs 485, 486, and 487.
    Our clinical advisors did not support the addition of ICD-10-CM 
diagnosis code A54.42 to the list of principal diagnosis codes for MS-
DRGs 485, 486, and 487 because ICD-10-CM diagnosis code A54.42 is not 
specifically indexed to include the knee or any infection in the knee. 
Therefore, we are not proposing to add ICD-10-CM diagnosis code A54.42 
to the list of principal diagnosis codes for these MS-DRGs.
    Upon review of the existing list of principal diagnosis codes for 
MS-DRGs 485, 486, and 487, our clinical advisors recommended that we 
review the following ICD-10-CM diagnosis codes currently included on 
the list of principal diagnosis codes because the codes are not 
specific to the knee.

------------------------------------------------------------------------
      ICD-10-CM code                      Code description
------------------------------------------------------------------------
M86.9.....................  Osteomyelitis, unspecified.
T84.50XA..................  Infection and inflammatory reaction due to
                             unspecified internal joint prosthesis,
                             initial encounter.
T84.51XA..................  Infection and inflammatory reaction due to
                             internal right hip prosthesis, initial
                             encounter.
T84.52XA..................  Infection and inflammatory reaction due to
                             internal left hip prosthesis, initial
                             encounter.
T84.59XA..................  Infection and inflammatory reaction due to
                             other internal joint prosthesis, initial
                             encounter.
T84.60XA..................  Infection and inflammatory reaction due to
                             internal fixation device of unspecified
                             site, initial encounter.
T84.63XA..................  Infection and inflammatory reaction due to
                             internal fixation device of spine, initial
                             encounter.
T84.69XA..................  Infection and inflammatory reaction due to
                             internal fixation device of other site,
                             initial encounter.
------------------------------------------------------------------------

    These ICD-10-CM diagnosis codes are currently assigned to medical 
MS-DRGs 559, 560, and 561 (Aftercare, Musculoskeletal System and 
Connective Tissue with MCC, with CC, and without CC/MCC, respectively) 
within MDC 8 in the absence of a surgical procedure. Similar to the 
process described above, we examined the ICD-10-CM Alphabetic Index to 
review the entries that refer and correspond to the diagnosis codes 
shown in the table above. We found the following entries.

------------------------------------------------------------------------
 
-------------------------------------------------------------------------
Index entries referring to M86.9: Osteomyelitis (general) (infective)
 (localized) (neonatal) (purulent) (septic) (staphylococcal)
 (streptococcal) (suppurative) (with periostitis).
Index entries referring to T84.50XA:Complication(s) (from) (of) > joint
 prosthesis, internal > infection or inflammation Infection, infected,
 infective (opportunistic) > joint NEC > due to internal joint
 prosthesis.
Index entries referring to T84.51XA: Infection, infected, infective
 (opportunistic) > hip (joint) NEC > due to internal joint prosthesis >
 right.
Index entries referring to T84.52XA: Infection, infected, infective
 (opportunistic) > hip (joint) NEC > due to internal joint prosthesis >
 left.
Index entries referring to T84.59XA: Complication(s) (from) (of) > joint
 prosthesis, internal > infection or inflammation > specified joint NEC
 Infection, infected, infective (opportunistic) > shoulder (joint) NEC >
 due to internal joint prosthesis.
Index entries referring to T84.60XA: Complication(s) (from) (of) >
 fixation device, internal (orthopedic) > infection and inflammation.
Index entries referring to T84.63XA: Complication(s) (from) (of) >
 fixation device, internal (orthopedic) > infection and inflammation >
 spine.
Index entries referring to T84.69XA: Complication(s) (from) (of) >
 fixation device, internal (orthopedic) > infection and inflammation >
 specified site NEC.
------------------------------------------------------------------------

    The Index entries for the ICD-10-CM diagnosis codes listed above 
reflect terms relating to an infection. However, none of the entries is 
specific to the knee. In addition, we note that there are other 
diagnosis codes in the subcategory T84.5- series (Infection and 
inflammatory reaction due to internal joint prosthesis) that are 
specific to the knee. For example, ICD-10-CM diagnosis code T84.53X- 
(Infection and inflammatory reaction due to internal right knee 
prosthesis) or ICD-10-CM diagnosis code T84.54X- (Infection and 
inflammatory reaction due to internal left knee prosthesis) with the 
appropriate 7th digit character to identify initial encounter, 
subsequent encounter or sequela, would be reported to identify a 
documented infection of the right or left knee due to an internal 
prosthesis. We further note that these ICD-10-CM diagnosis codes 
(T84.53X- and T84.54X-) with the 7th character ``A'' for initial 
encounter are currently already in the list of principal diagnosis 
codes for MS-DRGs 485, 486, and 487.
    Our clinical advisors support the removal of the above ICD-10-CM 
diagnosis codes from the list of principal diagnosis codes for MS-DRGs 
485, 486, and 487 because they are not specifically indexed to include 
an infection of the knee and there are other diagnosis codes in the 
subcategory T84.5- series that uniquely identify an infection and 
inflammatory reaction of the right or left knee due to an internal 
prosthesis as noted above.
    We also analyzed claims data for MS-DRGs 485, 486 and 487 to 
identify cases reporting one of the above listed ICD-10-CM diagnosis 
codes not specific to the knee as a principal diagnosis. Our findings 
are shown in the following table.

[[Page 19197]]



----------------------------------------------------------------------------------------------------------------
                                                                     Number of    Average length
                             MS-DRG                                    cases          of stay      Average costs
----------------------------------------------------------------------------------------------------------------
MS-DRG 485--Cases reporting principal diagnosis code not                      13            11.2         $30,765
 specific to the knee...........................................
MS-DRG 486--Cases reporting principal diagnosis code not                      43             6.5          15,837
 specific to the knee...........................................
MS-DRG 487--Cases reporting principal diagnosis code not                       7             2.6          11,362
 specific to the knee...........................................
----------------------------------------------------------------------------------------------------------------

    For MS-DRG 485, we found 13 cases reporting one of the diagnosis 
codes not specific to the knee as a principal diagnosis with an average 
length of stay of 11.2 days and average costs of $30,765. For MS-DRG 
486, we found 43 cases reporting one of the diagnosis codes not 
specific to the knee as a principal diagnosis with an average length of 
stay of 6.5 days and average costs of $15,837. For MS-DRG 487, we found 
7 cases reporting one of the diagnosis codes not specific to the knee 
as a principal diagnosis with an average length of stay of 2.6 days and 
average costs of $11,362.
    Overall, for MS-DRGs 485, 486, and 487, there were a total of 63 
cases reporting one of the ICD-10-CM diagnosis codes not specific to 
the knee as a principal diagnosis with an average length of stay of 7 
days and average costs of $18,421. Of those 63 cases, there were 32 
cases reporting a principal diagnosis code from the ICD-10-CM 
subcategory T84.5-series (Infection and inflammatory reaction due to 
internal joint prosthesis); 23 cases reporting a principal diagnosis 
code from the ICD-10-CM subcategory T84.6-series (Infection and 
inflammatory reaction due to internal fixation device), with 22 of the 
23 cases reporting ICD-10-CM diagnosis code T84.69XA (Infection and 
inflammatory reaction due to internal fixation device of other site, 
initial encounter) and 1 case reporting ICD-10-CM diagnosis code 
T84.63XA (Infection and inflammatory reaction due to internal fixation 
device of spine, initial encounter); and 8 cases reporting ICD-10-CM 
diagnosis code M86.9 (Osteomyelitis, unspecified) as a principal 
diagnosis.
    Our clinical advisors believe that there may have been coding 
errors among the 63 cases reporting a principal diagnosis of infection 
not specific to the knee. For example, 32 cases reported a principal 
diagnosis code from the ICD-10-CM subcategory T84.5-series (Infection 
and inflammatory reaction due to internal joint prosthesis) that was 
not specific to the knee and, as stated previously, there are other 
codes in this subcategory that uniquely identify an infection and 
inflammatory reaction of the right or left knee due to an internal 
prosthesis.
    Based on the results of our claims analysis and input from our 
clinical advisors, we are proposing to remove the following ICD-10-CM 
diagnosis codes that do not describe an infection of the knee from the 
list of principal diagnosis codes for MS-DRGs 485, 486, and 487: M86.9; 
T84.50XA; T84.51XA; T84.52XA; T84.59XA; T84.60XA; T84.63XA; and 
T84.69XA. We are not proposing to change the current assignment of 
these diagnosis codes in MS-DRGs 559, 560, and 561.
    In addition, our clinical advisors recommended that we add the 
following ICD-10-CM diagnosis codes as principal diagnosis codes for 
MS-DRGs 485, 486, and 487 because they are specific to the knee and 
describe an infection.

------------------------------------------------------------------------
      ICD-10-CM code                      Code description
------------------------------------------------------------------------
A18.02....................  Tuberculous arthritis of other joints.
M01.X61...................  Direct infection of right knee in infectious
                             and parasitic diseases classified
                             elsewhere.
M01.X62...................  Direct infection of left knee in infectious
                             and parasitic diseases classified
                             elsewhere.
M01.X69...................  Direct infection of unspecified knee in
                             infectious and parasitic diseases
                             classified elsewhere.
M71.061...................  Abscess of bursa, right knee.
M71.062...................  Abscess of bursa, left knee.
M71.069...................  Abscess of bursa, unspecified knee.
M71.161...................  Other infective bursitis, right knee.
M71.162...................  Other infective bursitis, left knee.
M71.169...................  Other infective bursitis, unspecified knee.
------------------------------------------------------------------------

    ICD-10-CM diagnosis code A18.02 (Tuberculous arthritis of other 
joints) is currently assigned to medical MS-DRGs 548, 549, and 550 
(Septic Arthritis with MCC, with CC, and without CC/MCC, respectively) 
within MDC 8 and MS-DRGs 974, 975, and 976 (HIV with Major Related 
Condition with MCC, with CC, and without CC/MCC, respectively) within 
MDC 25 (Human Immunodeficiency Virus Infections) in the absence of a 
surgical procedure. ICD-10-CM diagnosis codes M01.X61 (Direct infection 
of right knee in infectious and parasitic diseases classified 
elsewhere), M01.X62 (Direct infection of left knee in infectious and 
parasitic diseases classified elsewhere), and M01.X69 (Direct infection 
of unspecified knee in infectious and parasitic diseases classified 
elsewhere) are currently assigned to medical MS-DRGs 548, 549, and 550 
(Septic Arthritis with MCC, with CC, and without CC/MCC, respectively) 
within MDC 8 in the absence of a surgical procedure. ICD-10-CM 
diagnosis codes M71.061 (Abscess of bursa, right knee), M71.062 
(Abscess of bursa, left knee), M71.069 (Abscess of bursa, unspecified 
knee), M71.161 (Other infective bursitis, right knee), M71.162 (Other 
infective bursitis, left knee), and M71.169 (Other infective bursitis, 
unspecified knee) are currently assigned to medical MS-DRGs 557 and 558 
(Tendonitis, Myositis and Bursitis with and without MCC, respectively) 
within MDC 8 in the absence of a surgical procedure.
    Similar to the process described above, we examined the ICD-10-CM 
Alphabetic Index to review the entries that refer and correspond to the 
diagnosis codes shown in the table above. We found the following 
entries.
BILLING CODE 4120-01-P

[[Page 19198]]

[GRAPHIC] [TIFF OMITTED] TP03MY19.001


[[Page 19199]]


[GRAPHIC] [TIFF OMITTED] TP03MY19.002


[[Page 19200]]


[GRAPHIC] [TIFF OMITTED] TP03MY19.003

BILLING CODE 4120-01-C
    We note that there were no Index entries specifically for ICD-10-CM 
diagnosis codes M71.061, M71.062, M71.069, M71.161, M71.162, and 
M71.169. Rather, there were Index entries at the subcategory levels of 
M71.06- and M71.16-. We found the following entries.

[[Page 19201]]



------------------------------------------------------------------------
 
-------------------------------------------------------------------------
Index entry referring to M71.06-: (connective tissue) (embolic)
 (fistulous) (infective) (metastatic) (multiple) (pernicious) (pyogenic)
 (septic) > bursa > knee.
Index entry referring to M71.16-: Infective NEC > knee.
------------------------------------------------------------------------

    Our clinical advisors agreed that the results of our review of the 
ICD-10-CM Alphabetic Index support the addition of these ICD-10-CM 
diagnosis codes to MS-DRGs 485, 486, and 487 because the Index entries 
and/or the code descriptions clearly describe or include an infection 
that is specific to the knee.
    Therefore, we are proposing to add the following ICD-10-CM 
diagnosis codes to the list of principal diagnosis codes for MS-DRGs 
485, 486, and 487: A18.02; M01.X61; M01.X62; M01.X69; M71.061; M71.062; 
M71.069; M71.161; M71.162; and M71.169.
b. Neuromuscular Scoliosis
    We received a request to add ICD-10-CM diagnosis codes describing 
neuromuscular scoliosis to the list of principal diagnosis codes for 
MS-DRGs 456, 457, and 458 (Spinal Fusion except Cervical with Spinal 
Curvature or Malignancy or Infection or Extensive Fusions with MCC, 
with CC, and without CC/MCC, respectively). Excluding the ICD-10-CM 
diagnosis codes that address the cervical spine, the following ICD-10-
CM diagnosis codes are used to describe neuromuscular scoliosis.

------------------------------------------------------------------------
      ICD-10-CM code                      Code description
------------------------------------------------------------------------
M41.40....................  Neuromuscular scoliosis, site unspecified.
M41.44....................  Neuromuscular scoliosis, thoracic region.
M41.45....................  Neuromuscular scoliosis, thoracolumbar
                             region.
M41.46....................  Neuromuscular scoliosis, lumbar region.
M41.47....................  Neuromuscular scoliosis, lumbosacral region.
------------------------------------------------------------------------

    The requestor asserted that all levels of neuromuscular scoliosis, 
except cervical, should group to the non-cervical spinal fusion MS-DRGs 
for spinal curvature (MS-DRGs 456, 457, and 458). The requestor also 
noted that the current MS-DRG logic only groups cases reporting 
neuromuscular scoliosis to MS-DRGs 456, 457, and 458 when neuromuscular 
scoliosis is reported as a secondary diagnosis. The requestor contended 
that it would be rare for a diagnosis of neuromuscular scoliosis to be 
reported as a secondary diagnosis because there is not a ``code first'' 
note in the ICD-10-CM Tabular List of Diseases and Injuries indicating 
to ``code first'' the underlying cause. According to the requestor, 
when a diagnosis of neuromuscular scoliosis is the reason for an 
admission for non-cervical spinal fusion, neuromuscular scoliosis must 
be sequenced as the principal diagnosis because it is the chief 
condition responsible for the admission. However, this sequencing, 
which adheres to the ICD-10-CM Official Guidelines for Coding and 
Reporting, prevents the admission from grouping to the non-cervical 
spinal fusion MS-DRGs for spinal curvature caused by neuromuscular 
scoliosis.
    We analyzed claims data from the September 2018 update of the FY 
2018 MedPAR file for cases reporting any of the ICD-10-CM diagnosis 
codes describing neuromuscular scoliosis (as listed previously) as a 
principal diagnosis with a non-cervical spinal fusion, which are 
currently assigned to MS-DRGs 459 and 460 (Spinal Fusion except 
Cervical with MCC and without MCC, respectively). Our findings are 
shown in the following table.

   MS-DRGs for Cases Involving Non-Cervical Spinal Fusion With Principal Diagnosis of Neuromuscular Scoliosis
----------------------------------------------------------------------------------------------------------------
                                                                     Number of    Average length
                             MS-DRG                                    cases          of stay      Average costs
----------------------------------------------------------------------------------------------------------------
MS-DRG 459--All cases...........................................           3,903             8.6         $46,416
MS-DRG 459--Cases with principal diagnosis of neuromuscular                    3            15.3          95,745
 scoliosis......................................................
MS-DRG 460--All cases...........................................          52,597             3.3          28,754
MS-DRG 460--Cases with principal diagnosis of neuromuscular                    8             4.3          71,406
 scoliosis......................................................
----------------------------------------------------------------------------------------------------------------

    The data reveal that there was a total of 56,500 cases in MS-DRGs 
459 and 460. We found 3,903 cases reported in MS-DRG 459, with an 
average length of stay of 8.6 days and average costs of $46,416. Of 
these 3,903 cases, 3 reported a principal diagnosis code of 
neuromuscular scoliosis, with an average length of stay of 15.3 days 
and average costs of $95,745. We found a total of 52,597 cases in MS-
DRG 460, with an average length of stay of 3.3 days and average costs 
of $28,754. Of these 52,597 cases, 8 cases reported a principal 
diagnosis code describing neuromuscular scoliosis, with an average 
length of stay of 4.3 days and average costs of $71,406. The data 
clearly demonstrate that the average costs and average length of stay 
for the small number of cases reporting a principal diagnosis of 
neuromuscular scoliosis are higher in comparison to all the cases in 
their assigned MS-DRG.
    We also analyzed claims data for MS-DRGs 456, 457, and 458 (Spinal 
Fusion except Cervical with Spinal Curvature or Malignancy or Infection 
or Extensive Fusions with MCC, with CC, and without CC/MCC, 
respectively) to identify the spinal fusion cases reporting any of the 
ICD-10-CM codes describing neuromuscular scoliosis (as listed 
previously) as a secondary diagnosis. Our findings are shown in the 
following table.

[[Page 19202]]



   MS-DRGs for Cases Involving Non-Cervical Spinal Fusion With Spinal Curvature or Malignancy or Infection or
                      Extensive Fusions With Secondary Diagnosis of Neuromuscular Scoliosis
----------------------------------------------------------------------------------------------------------------
                                                                     Number of    Average length
                             MS-DRG                                    cases          of stay      Average costs
----------------------------------------------------------------------------------------------------------------
MS-DRG 456--All cases...........................................           1,344            12.0         $66,012
MS-DRG 456--Cases with secondary diagnosis of neuromuscular                    6            18.2          79,809
 scoliosis......................................................
MS-DRG 457--All cases...........................................           3,654             6.2          47,577
MS-DRG 457--Cases with secondary diagnosis of neuromuscular                   12             4.5          31,646
 scoliosis......................................................
MS-DRG 458--All cases...........................................           1,245             3.4          34,179
MS-DRG 458--Cases with secondary diagnosis of neuromuscular                    6             3.3          31,117
 scoliosis......................................................
----------------------------------------------------------------------------------------------------------------

    The data indicate that there were 1,344 cases reported in MS-DRG 
456, with an average length of stay of 12 days and average costs of 
$66,012. Of these 1,344 cases, 6 cases reported a secondary diagnosis 
code describing neuromuscular scoliosis, with an average length of stay 
of 18.2 days and average costs of $79,809. We found a total of 3,654 
cases in MS-DRG 457, with an average length of stay of 6.2 days and 
average costs of $47,577. Twelve of these 3,654 cases reported a 
secondary diagnosis code describing neuromuscular scoliosis, with an 
average length of stay of 4.5 days and average costs of $31,646. 
Finally, the 1,245 cases reported in MS-DRG 458 had an average length 
of stay of 3.4 days and average costs of $34,179. Of these 1,245 cases, 
6 cases reported neuromuscular scoliosis as a secondary diagnosis, with 
an average length of stay of 3.3 days and average costs of $31,117.
    We reviewed the ICD-10-CM Tabular List of Diseases for subcategory 
M41.4 and confirmed there is a ``Code also underlying condition'' note. 
We also reviewed the ICD-10-CM Official Guidelines for Coding and 
Reporting for the ``code also'' note at Section 1.A.12.b., which 
states: ``A `code also' note instructs that two codes may be required 
to fully describe a condition, but this note does not provide 
sequencing direction.'' Our clinical advisors agree that the sequencing 
of the ICD-10-CM diagnosis codes is determined by which condition leads 
to the encounter and is responsible for the admission. They also note 
that there may be instances in which the underlying cause of the 
diagnosis of neuromuscular scoliosis is not treated or responsible for 
the admission.
    As discussed earlier, our review of the claims data shows that a 
small number of cases reported neuromuscular scoliosis either as a 
principal diagnosis in MS-DRGs 459 and 460 or as a secondary diagnosis 
in MS-DRGs 456, 457, and 458. Our clinical advisors agree that while 
the volume of cases is small, the average costs and average length of 
stay for the cases reporting neuromuscular scoliosis as a principal 
diagnosis with a non-cervical spinal fusion currently grouping to MS-
DRGs 459 and 460 are more aligned with the average costs and average 
length of stay for the cases reporting neuromuscular scoliosis as a 
secondary diagnosis with a non-cervical spinal fusion currently 
grouping to MS-DRGs 456, 457, and 458. Therefore, for the reasons 
described above, we are proposing to add the following ICD-10-CM codes 
describing neuromuscular scoliosis to the list of principal diagnosis 
codes for MS-DRGs 456, 457, and 458: M41.40; M41.44; M41.45; M41.46; 
and M41.47.
c. Secondary Scoliosis and Secondary Kyphosis
    We received a request to add ICD-10-CM diagnosis codes describing 
secondary scoliosis and secondary kyphosis to the list of principal 
diagnoses for MS-DRGs 456, 457, and 458 (Spinal Fusion except Cervical 
with Spinal Curvature or Malignancy or Infection or Extensive Fusions 
with MCC, with CC, and without CC/MCC, respectively). Excluding the 
ICD-10-CM diagnosis codes that address the cervical spine, the 
following ICD-10-CM diagnosis codes are used to describe secondary 
scoliosis.

------------------------------------------------------------------------
      ICD-10-CM code                      Code description
------------------------------------------------------------------------
M41.50....................  Other secondary scoliosis, site unspecified.
M41.54....................  Other secondary scoliosis, thoracic region.
M41.55....................  Other secondary scoliosis, thoracolumbar
                             region.
M41.56....................  Other secondary scoliosis, lumbar region.
M41.57....................  Other secondary scoliosis, lumbosacral
                             region.
------------------------------------------------------------------------

    Excluding the ICD-10-CM diagnosis codes that address the cervical 
spine, the following ICD-10-CM diagnosis codes are used to describe 
secondary kyphosis.

------------------------------------------------------------------------
      ICD-10-CM code                      Code description
------------------------------------------------------------------------
M40.10....................  Other secondary kyphosis, site unspecified.
M40.14....................  Other secondary kyphosis, thoracic region.
M40.15....................  Other secondary kyphosis, thoracolumbar
                             region.
------------------------------------------------------------------------

    The requestor stated that generally in cases of diagnoses of 
secondary scoliosis or kyphosis, the underlying cause of the condition 
is not treated or is not responsible for the admission. If a patient is 
admitted for surgery to correct non-cervical spinal curvature, it is 
appropriate to sequence the diagnosis of secondary scoliosis or 
secondary kyphosis as principal diagnosis. However, reporting a 
diagnosis of secondary scoliosis or secondary

[[Page 19203]]

kyphosis as the principal diagnosis with a non-cervical spinal fusion 
procedure results in the case grouping to MS-DRG 459 or 460 (Spinal 
Fusion except Cervical with MCC and without MCC, respectively), instead 
of the spinal fusion with spinal curvature MS-DRGs 456, 457, and 458.
    We analyzed claims data from the September 2018 update of the FY 
2018 MedPAR file for MS-DRGs 459 and 460 to determine the number of 
cases reporting an ICD-10-CM diagnosis code describing secondary 
scoliosis or secondary kyphosis as the principal diagnosis. Our 
findings are shown in the following table.

   MS-DRGs for Cases Involving Non-Cervical Spinal Fusion With a Principal Diagnosis of Secondary Scoliosis or
                                               Secondary Kyphosis
----------------------------------------------------------------------------------------------------------------
                                                                     Number of        Average
                             MS-DRG                                    cases      length of stay   Average costs
----------------------------------------------------------------------------------------------------------------
MS-DRG 459--All cases...........................................           3,903             8.6         $46,416
MS-DRG 459--Cases with a principal diagnosis of secondary                      4             7.3          56,024
 scoliosis......................................................
MS-DRG 459--Cases with a principal diagnosis of secondary                      4             5.8          41,883
 kyphosis.......................................................
MS-DRG 460--All cases...........................................          52,597             3.3          28,754
MS-DRG 460--Cases with a principal diagnosis of secondary                     34             3.6          34,424
 scoliosis......................................................
MS-DRG 460--Cases with a principal diagnosis of secondary                     31             4.6          42,315
 kyphosis.......................................................
----------------------------------------------------------------------------------------------------------------

    As shown in the table, we found a total of 3,903 cases in MS-DRG 
459, with an average length of stay of 8.6 days and average costs of 
$46,416. Of these 3,903 cases, we found 4 cases that reported a 
principal diagnosis of secondary scoliosis, with an average length of 
stay of 7.3 days and average costs of $56,024. We also found 4 cases 
that reported a principal diagnosis of secondary kyphosis, with an 
average length of stay of 5.8 days and average costs of $41,883. For 
MS-DRG 460, we found a total of 52,597 cases with an average length of 
stay of 3.3 days and average costs of $28,754. Of these 52,597 cases, 
we found 34 cases that reported a principal diagnosis of secondary 
scoliosis, with an average length of stay of 3.6 days and average costs 
of $34,424. We found 31 cases that reported a principal diagnosis of 
secondary kyphosis in MS-DRG 460, with an average length of stay of 4.6 
days and average costs of $42,315.
    We also analyzed claims data for MS-DRGs 456, 457, and 458 to 
determine the number of cases reporting an ICD-10-CM diagnosis code 
describing secondary scoliosis or secondary kyphosis as a secondary 
diagnosis. Our findings are shown in the following table.

   MS-DRGs for Cases Involving Non-Cervical Spinal Fusion With Spinal Curvature or Malignancy or Infection or
             Extensive Fusions With Secondary Diagnosis of Secondary Scoliosis or Secondary Kyphosis
----------------------------------------------------------------------------------------------------------------
                                                                     Number of        Average
                             MS-DRG                                    cases      length of stay   Average costs
----------------------------------------------------------------------------------------------------------------
MS-DRG 456--All cases...........................................           1,344              12         $66,012
MS-DRG 456--Cases with a secondary diagnosis of secondary                     37             7.7          58,009
 scoliosis......................................................
MS-DRG 456--Cases with a secondary diagnosis of secondary                     52              12          78,865
 kyphosis.......................................................
MS-DRG 457--All cases...........................................           3,654             6.2          47,577
MS-DRG 457--Cases with a secondary diagnosis of secondary                    187             4.9          37,655
 scoliosis......................................................
MS-DRG 457--Cases with a secondary diagnosis of secondary                    114             5.2          37,357
 kyphosis.......................................................
MS-DRG 458--All cases...........................................           1,245             3.4          34,179
MS-DRG 458--Cases with a secondary diagnosis of secondary                    190             3.0          29,052
 scoliosis......................................................
MS-DRG 458--Cases with a secondary diagnosis of secondary                     39             3.7          31,015
 kyphosis.......................................................
----------------------------------------------------------------------------------------------------------------

    The data indicate that there were 1,344 cases in MS-DRG 456, with 
an average length of stay of 12 days and average costs of $66,012. Of 
these 1,344 cases, there were 37 cases that reported a secondary 
diagnosis of secondary scoliosis, with an average length of stay of 7.7 
days and average costs of $58,009. There were also 52 cases in MS-DRG 
456 reporting a secondary diagnosis of secondary kyphosis, with an 
average length of stay of 12 days and average costs of $78,865. In MS-
DRG 457, there was a total of 3,654 cases, with an average length of 
stay of 6.2 days and average costs of $47,577. Of these 3,654 cases, 
there were 187 cases that reported secondary scoliosis as a secondary 
diagnosis, with an average length of stay of 4.9 days and average costs 
of $37,655. In MS-DRG 457, there were also 114 cases that reported a 
secondary diagnosis of secondary kyphosis, with an average length of 
stay of 5.2 days and average costs of $37,357. Finally, there was a 
total of 1,245 cases in MS-DRG 458, with an average length of stay of 
3.4 days and average costs of $34,179. Of these 1,245 cases, there were 
190 cases that reported a secondary diagnosis of secondary scoliosis, 
with an average length of stay of 3 days and average costs of $29,052. 
There were 39 cases in MS-DRG 458 that reported a secondary diagnosis 
of secondary kyphosis, with an average length of stay of 3.7 days and 
average costs of $31,015.
    Our clinical advisors agree that the average length of stay and 
average costs for the small number of cases reporting secondary 
scoliosis or secondary kyphosis as a principal diagnosis with a non-
cervical spinal fusion currently grouping to MS-DRGs 459 and 460 are 
generally more aligned with the average length of stay and average 
costs for the cases reporting secondary scoliosis or secondary kyphosis 
as a secondary diagnosis with a non-cervical spinal fusion currently 
grouping to MS-DRGs 456, 457, and 458. They also note that there may be 
instances in which the underlying cause of the diagnosis of secondary 
scoliosis or secondary kyphosis is not treated or responsible for the 
admission.
    Therefore, for the reasons described above, we are proposing to add 
the following ICD-10-CM diagnosis codes describing secondary scoliosis 
and

[[Page 19204]]

secondary kyphosis to the list of principal diagnosis codes for MS-DRGs 
456, 457, and 458: M40.10; M40.14; M40.15; M41.50; M41.54; M41.55; 
M41.56; and M41.57. During our review of MS-DRGs 456, 457, and 458, we 
found the following diagnosis codes that describe conditions involving 
the cervical region.

------------------------------------------------------------------------
      ICD-10-CM code                      Code description
------------------------------------------------------------------------
M40.03....................  Postural kyphosis, cervicothoracic region.
M40.202...................  Unspecified kyphosis, cervical region.
M40.203...................  Unspecified kyphosis, cervicothoracic
                             region.
M40.292...................  Other kyphosis, cervical region.
M40.293...................  Other kyphosis, cervicothoracic region.
M41.02....................  Infantile idiopathic scoliosis, cervical
                             region.
M41.03....................  Infantile idiopathic scoliosis,
                             cervicothoracic region.
M41.112...................  Juvenile idiopathic scoliosis, cervical
                             region.
M41.113...................  Juvenile idiopathic scoliosis,
                             cervicothoracic region.
M41.122...................  Adolescent idiopathic scoliosis, cervical
                             region.
M41.123...................  Adolescent idiopathic scoliosis,
                             cervicothoracic region.
M41.22....................  Other idiopathic scoliosis, cervical region.
M41.23....................  Other idiopathic scoliosis, cervicothoracic
                             region.
M41.82....................  Other forms of scoliosis, cervical region.
M41.83....................  Other forms of scoliosis, cervicothoracic
                             region.
M42.01....................  Juvenile osteochondrosis of spine, occipito-
                             atlanto-axial region.
M42.02....................  Juvenile osteochondrosis of spine, cervical
                             region.
M42.03....................  Juvenile osteochondrosis of spine,
                             cervicothoracic region.
M43.8X1...................  Other specified deforming dorsopathies,
                             occipito-atlanto-axial region.
M43.8X2...................  Other specified deforming dorsopathies,
                             cervical region.
M43.8X3...................  Other specified deforming dorsopathies,
                             cervicothoracic region.
M46.21....................  Osteomyelitis of vertebra, occipito-atlanto-
                             axial region.
M46.22....................  Osteomyelitis of vertebra, cervical region.
M46.23....................  Osteomyelitis of vertebra, cervicothoracic
                             region.
M48.51XA..................  Collapsed vertebra, not elsewhere
                             classified, occipito-atlanto-axial region,
                             initial encounter for fracture.
M48.52XA..................  Collapsed vertebra, not elsewhere
                             classified, cervical region, initial
                             encounter for fracture.
M48.53XA..................  Collapsed vertebra, not elsewhere
                             classified, cervicothoracic region, initial
                             encounter for fracture.
M40.12....................  Other secondary kyphosis, cervical region.
M40.13....................  Other secondary kyphosis, cervicothoracic
                             region.
M41.41....................  Neuromuscular scoliosis, occipito-atlanto-
                             axial region.
M4.142....................  Neuromuscular scoliosis, cervical region.
M4143.....................  Neuromuscular scoliosis, cervicothoracic
                             region.
M41.52....................  Other secondary scoliosis, cervical region.
M41.53....................  Other secondary scoliosis, cervicothoracic
                             region.
------------------------------------------------------------------------

    Our clinical advisors noted that because the diagnosis codes shown 
in the table above describe conditions involving the cervical region, 
they are not clinically appropriate for assignment to MS-DRGs 456, 457, 
and 458, which are defined by non-cervical spinal fusion procedures 
(with spinal curvature or malignancy or infection or extensive 
fusions). Therefore, our clinical advisors recommended that these codes 
be removed from the MS-DRG logic for these MS-DRGs. As such, we are 
proposing to remove the diagnosis codes that describe conditions 
involving the cervical region as shown in the table above from MS-DRGs 
456, 457, and 458.
7. MDC 11 (Diseases and Disorders of the Kidney and Urinary Tract): 
Extracorporeal Shock Wave Lithotripsy (ESWL)
    We received two separate, but related requests to add ICD-10-CM 
diagnosis code N13.6 (Pyonephrosis) and ICD-10-CM diagnosis code 
T83.192A (Other mechanical complication of indwelling ureteral stent, 
initial encounter) to the list of principal diagnosis codes for MS-DRGs 
691 and 692 (Urinary Stones with ESW Lithotripsy with CC/MCC and 
without CC/MCC, respectively) in MDC 11 so that cases are assigned more 
appropriately when an Extracorporeal Shock Wave Lithotripsy (ESWL) 
procedure is performed.
    ICD-10-CM diagnosis code N13.6 currently groups to MS-DRGs 689 and 
690 (Kidney and Urinary Tract Infections with MCC and without MCC, 
respectively) and ICD-10-CM diagnosis code T83.192A currently groups to 
MS-DRGs 698, 699, and 700 (Other Kidney and Urinary Tract Diagnoses 
with MCC, with CC, and without CC/MCC, respectively).
    The ICD-10-PCS procedure codes for identifying procedures involving 
ESWL are designated as non-O.R. procedures and are shown in the 
following table.

------------------------------------------------------------------------
      ICD-10-PCS code                     Code description
------------------------------------------------------------------------
0TF3XZZ...................  Fragmentation in right kidney pelvis,
                             external approach.
0TF4XZZ...................  Fragmentation in left kidney pelvis,
                             external approach.
OTF6XZZ...................  Fragmentation in right ureter, external
                             approach.
OTF7XZZ...................  Fragmentation in left ureter, external
                             approach.
OTFBXZZ...................  Fragmentation in bladder, external approach.
OTFCXZZ...................  Fragmentation in bladder neck, external
                             approach.
OTFDXZZ...................  Fragmentation in urethra, external approach.
------------------------------------------------------------------------


[[Page 19205]]

    Pyonephrosis can be described as an infection of the kidney with 
pus in the upper collecting system which can progress to obstruction. 
Patients with an obstruction in the upper urinary tract due to urinary 
stones (calculi), tumors, fungus balls or ureteropelvic obstruction 
(UPJ) may also have a higher risk of developing pyonephrosis. If 
pyonephrosis is not recognized and treated promptly, it can result in 
serious complications, including fistulas, septic shock, irreversible 
damage to the kidneys, and death.
    As noted above, the requestor recommended that ICD-10-CM diagnosis 
codes N13.6 and T83.192A be added to the list of principal diagnosis 
codes for MS-DRGs 691 and 692. There are currently four MS-DRGs that 
group cases for diagnoses involving urinary stones, which are 
subdivided to identify cases with and without an ESWL procedure: MS-
DRGs 691 and 692 (Urinary Stones with ESW Lithotripsy with and without 
CC/MCC, respectively) and MS-DRGs 693 and 694 (Urinary Stones without 
ESW Lithotripsy with and without MCC, respectively).
    The requestor stated that when patients who have been diagnosed 
with hydronephrosis secondary to renal and ureteral calculus 
obstruction undergo an ESWL procedure, ICD-10-CM diagnosis code N13.2 
(Hydronephrosis with renal and ureteral calculous obstruction) is 
reported and groups to MS-DRGs 691 and 692. However, if a patient with 
a diagnosis of hydronephrosis has a urinary tract infection (UTI) in 
addition to a renal calculus obstruction and undergoes an ESWL 
procedure, ICD-10-CM diagnosis code N13.6 must be coded and reported as 
the principal diagnosis, which groups to MS-DRGs 689 and 690. The 
requestor stated that ICD-10-CM diagnosis code N13.6 should be grouped 
to MS-DRGs 691 and 692 when reported as a principal diagnosis because 
this grouping will more appropriately reflect resource consumption for 
patients who undergo an ESWL procedure for obstructive urinary calculi, 
while also receiving treatment for urinary tract infections.
    With regard to ICD-10-CM diagnosis code T83.192A, the requestor 
believed that when an ESWL procedure is performed for the treatment of 
calcifications within and around an indwelling ureteral stent, it is 
comparable to an ESWL procedure performed for the treatment of urinary 
calculi. Therefore, the requestor recommended adding ICD-10-CM 
diagnosis code T83.192A to MS-DRGs 691 and 692 when reported as a 
principal diagnosis and an ESWL procedure is also reported on the 
claim.
    To analyze these separate, but related requests, we first reviewed 
the reporting of ICD-10-CM diagnosis code N13.6 within the ICD-10-CM 
classification. ICD-10-CM diagnosis code N13.6 is to be assigned for 
conditions identified in the code range N13.0-N13.5 with infection. 
(Codes in this range describe hydronephrosis with obstruction.) 
Infection may be documented by the patient's provider as urinary tract 
infection (UTI) or as specific as acute pyelonephritis. We agree with 
the requestor that if a patient with a diagnosis of hydronephrosis has 
a urinary tract infection (UTI) in addition to a renal calculus 
obstruction and undergoes an ESWL procedure, ICD-10-CM diagnosis code 
N13.6 must be coded and reported as the principal diagnosis, which 
groups to MS-DRGs 689 and 690. In this case scenario, the ESWL 
procedure is designated as a non-O.R. procedure and does not impact the 
MS-DRG assignment when reported with ICD-10-CM diagnosis code N13.6.
    The ICD-10-CM classification instructs that when both a urinary 
obstruction and a genitourinary infection co-exist, the correct code 
assignment for reporting is ICD-10-CM diagnosis code N13.6, which is 
appropriately grouped to MS-DRGs 689 and 690 (Kidney and Urinary Tract 
Infections with MCC and without MCC, respectively) because it describes 
a type of urinary tract infection. Therefore, in response to the 
requestor's suggestion that ICD-10-CM diagnosis code N13.6 be grouped 
to MS-DRGs 691 and 692 when reported as a principal diagnosis to more 
appropriately reflect resource consumption for patients who undergo an 
ESWL procedure for obstructive urinary calculi while also receiving 
treatment for urinary tract infections, we note that the ICD-10-CM 
classification provides instruction to identify the conditions reported 
with ICD-10-CM diagnosis code N13.6 as an infection, and not as urinary 
stones. Our clinical advisors agree with this classification and the 
corresponding MS-DRG assignment for diagnosis code N13.6. In addition, 
our clinical advisors noted that an ESWL procedure is a non-O.R. 
procedure and they do not believe that this procedure is a valid 
indicator of resource consumption for cases that involve an infection 
and obstruction. Our clinical advisors believe that the resources used 
for a case that involves an infection and an obstruction are clinically 
distinct from the cases that involve an obstruction only in the course 
of treatment. Therefore, our clinical advisors do not agree with the 
request to add ICD-10-CM diagnosis code N13.6 to the list of principal 
diagnoses for MS-DRGs 691 and 692.
    We also performed various analyses of claims data to evaluate this 
request. We analyzed claims data from the September 2018 update of the 
FY 2018 MedPAR file for MS-DRGs 689 and 690 to identify cases reporting 
ICD-10-CM diagnosis code N13.6 as the principal diagnosis with and 
without an ESWL procedure. Our findings are reflected in the table 
below.

       Kidney and Urinary Tract Infections With Principal Diagnosis of Pyonephrosis With and Without ESWL
----------------------------------------------------------------------------------------------------------------
                                                                     Number of    Average length
                             MS-DRG                                    cases          of stay      Average costs
----------------------------------------------------------------------------------------------------------------
MS-DRG 689--All cases...........................................          68,020             4.8          $7,873
MS-DRG 689--Cases with principal diagnosis of pyonephrosis......           1,024             6.1          13,809
MS-DRG 689--Cases with principal diagnosis of pyonephrosis with                6            14.2          45,489
 ESWL...........................................................
MS-DRG 690--All cases...........................................         131,999             3.5           5,692
MS-DRG 690--Cases with principal diagnosis of pyonephrosis......           4,625             3.6           5,483
MS-DRG 690--Cases with principal diagnosis of pyonephrosis with               24             4.8          14,837
 ESWL...........................................................
----------------------------------------------------------------------------------------------------------------

    For MS-DRG 689, we found a total of 68,020 cases with an average 
length of stay of 4.8 days and average costs of $7,873. Of those 68,020 
cases, we found 1,024 cases reporting pyonephrosis (ICD-10-CM diagnosis 
code N13.6) as a principal diagnosis with an average length of stay of 
6.1 days and average costs of $13,809. Of those 1,024 cases reporting 
pyonephrosis (ICD-10-CM diagnosis code N13.6) as a principal diagnosis, 
there were 6 cases that also reported an ESWL procedure with an average 
length of stay of 14.2 days and average costs of $45,489. For MS-DRG

[[Page 19206]]

690, we found a total of 131,999 cases with an average length of stay 
of 3.5 days and average costs of $5,692. Of those 131,999 cases, we 
found 4,625 cases reporting pyonephrosis (ICD-10-CM diagnosis code 
N13.6) as a principal diagnosis with an average length of stay of 3.6 
days and average costs of $5,483. Of those 4,625 cases reporting 
pyonephrosis (ICD-10-CM diagnosis code N13.6) as a principal diagnosis, 
there were 24 cases that also reported an ESWL procedure with an 
average length of stay of 4.8 days and average costs of $14,837.
    The data indicate that the 1,024 cases reporting pyonephrosis (ICD-
10-CM diagnosis code N13.6) as a principal diagnosis in MS-DRG 689 have 
a longer average length of stay (6.1 days versus 4.8 days) and higher 
average costs ($13,809 versus $7,873) compared to all the cases in MS-
DRG 689. The data also indicate that the 6 cases reporting pyonephrosis 
(ICD-10-CM diagnosis code N13.6) as a principal diagnosis that also 
reported an ESWL procedure have a longer average length of stay (14.2 
days versus 4.8 days) and higher average costs ($45,489 versus $7,873) 
in comparison to all the cases in MS-DRG 689. We found similar results 
for cases reporting pyonephrosis (ICD-10-CM diagnosis code N13.6) as a 
principal diagnosis with an ESWL procedure in MS-DRG 690, where the 
average length of stay was slightly longer (4.8 days versus 3.5 days) 
and the average costs were higher ($14,837 versus $5,692).
    We then conducted further analysis for the six cases in MS-DRG 689 
that reported a principal diagnosis of pyonephrosis with ESWL to 
determine what factors may be contributing to the longer lengths of 
stay and higher average costs. Specifically, we analyzed the MCC 
conditions that were reported across the six cases. Our findings are 
shown in the table below.

  Secondary Diagnosis MCC Conditions Reported in MS-DRG 689 With Principal Diagnosis of Pyonephrosis with ESWL
----------------------------------------------------------------------------------------------------------------
                                                                     Number of        Average
         ICD-10-CM code                     Description           times reported  length of stay   Average costs
----------------------------------------------------------------------------------------------------------------
A41.9...........................  Sepsis, unspecified organism..               2            26.5          96,525
G82.50..........................  Quadriplegia, unspecified.....               1               7          13,782
I50.23..........................  Acute on chronic systolic                    1               7          13,304
                                   (congestive) heart failure.
J96. 01.........................  Acute respiratory failure with               1               7          13,304
                                   hypoxia.
K66.1...........................  Hemoperitoneum................               1              10          26,314
L89.153.........................  Pressure ulcer of sacral                     1               8          26,487
                                   region, stage 3.
R57.1...........................  Hypovolemic shock.............               1              10          26,314
                                                                 -----------------------------------------------
    Total.......................  ..............................               8            12.8          39,069
----------------------------------------------------------------------------------------------------------------

    We found seven secondary diagnosis MCC conditions reported among 
the six cases in MS-DRG 689 that had a principal diagnosis of 
pyonephrosis with ESWL. These MCC conditions appear to have contributed 
to the longer lengths of stay and higher average costs for those six 
cases. As shown in the table above, the overall average length of stay 
for the cases reporting these conditions is 12.8 days with average 
costs of $39,069, which is consistent with the average length of stay 
of 14.2 days and average costs of $45,489 for the cases in MS-DRG 689 
that had a principal diagnosis of pyonephrosis with ESWL.
    We then analyzed the 24 cases in MS-DRG 690 that reported a 
principal diagnosis of pyonephrosis with ESWL to determine what factors 
may be contributing to the longer lengths of stay and higher average 
costs. Specifically, we analyzed the CC conditions that were reported 
across the 24 cases. Our findings are shown in the table below.

                       Secondary Diagnosis CC Conditions Reported in MS-DRG 690 With Principal Diagnosis of Pyonephrosis With ESWL
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                             Number of        Average
                ICD-10-CM code                                        Description                         times reported  length of stay   Average costs
--------------------------------------------------------------------------------------------------------------------------------------------------------
B37.0........................................  Candidal stomatitis......................................               2             9.5         $18,895
B37.49.......................................  Other urogenital candidiasis.............................               2             7.5          30,458
C79.89.......................................  Secondary malignant neoplasm of other specified sites....               1               3           5,882
E22.2........................................  Syndrome of inappropriate secretion of antidiuretic                     1               2           5,979
                                                hormone.
E44.0........................................  Moderate protein-calorie malnutrition....................               1               6           9,027
E46..........................................  Unspecified protein-calorie malnutrition.................               2             5.5           8,704
E87.0........................................  Hyperosmolality and hypernatremia........................               1               6           9,027
E87.1........................................  Hypo-osmolality and hyponatremia.........................               1               5          12,339
F11.20.......................................  Opioid dependence, uncomplicated.........................               1               1           8,209
F33.1........................................  Major depressive disorder, recurrent, moderate...........               1              12          55,034
G81.94.......................................  Hemiplegia, unspecified affecting left nondominant side..               3             9.3          25,390
G82.20.......................................  Paraplegia, unspecified..................................               1              10          15,142
G93.40.......................................  Encephalopathy, unspecified..............................               2               7          10,277
I13.0........................................  Hypertensive heart and chronic kidney disease with heart                1               4          12,348
                                                failure and stage 1 through stage 4 chronic kidney
                                                disease, or unspecified chronic kidney dis.
I48.1........................................  Persistent atrial fibrillation...........................               1              12          55,034
I50.22.......................................  Chronic systolic (congestive) heart failure..............               1              12          55,034
I50.32.......................................  Chronic diastolic (congestive) heart failure.............               2             3.5           9,115
I69.351......................................  Hemiplegia and hemiparesis following cerebral infarction                1               3           4,845
                                                affecting right dominant side.

[[Page 19207]]

 
I69.859......................................  Hemiplegia and hemiparesis following other                              1               4          18,160
                                                cerebrovascular disease affecting unspecified side.
I97.791......................................  Other intraoperative cardiac functional disturbances                    1               8           8,114
                                                during other surgery.
J44.0........................................  Chronic obstructive pulmonary disease with acute lower                  1              11          25,641
                                                respiratory infection.
J44.1........................................  Chronic obstructive pulmonary disease with (acute)                      2               5          11,283
                                                exacerbation.
J96.10.......................................  Chronic respiratory failure, unspecified whether with                   1              12          55,034
                                                hypoxia or hypercapnia.
J96.11.......................................  Chronic respiratory failure with hypoxia.................               2               7          15,243
K57.92.......................................  Diverticulitis of intestine, part unspecified, without                  1               8          12,150
                                                perforation or abscess without bleeding.
N12..........................................  Tubulo-interstitial nephritis, not specified as acute or                1              11          25,641
                                                chronic.
N13.8........................................  Other obstructive and reflux uropathy....................               1               5          32,854
N17.9........................................  Acute kidney failure, unspecified........................               1               2          21,329
N20.1........................................  Calculus of ureter.......................................               1              10          15,142
N20.2........................................  Calculus of kidney with calculus of ureter...............               1               6           9,027
R44.3........................................  Hallucinations, unspecified..............................               1               2          21,329
R47.01.......................................  Aphasia..................................................               1               4          10,161
R78.81.......................................  Bacteremia...............................................               1              11           4,849
S37.012A.....................................  Minor contusion of left kidney, initial encounter........               1               2          21,329
T83.511A.....................................  Infection and inflammatory reaction due to indwelling                   1              10          15,142
                                                urethral catheter, initial encounter.
Z68.1........................................  Body mass index (BMI) 19.9 or less, adult................               2             4.5          10,040
Z68.43.......................................  Body mass index (BMI) 50-59.9, adult.....................               1               3           6,145
                                                                                                         -----------------------------------------------
    Total....................................  .........................................................              47             6.6          18,173
--------------------------------------------------------------------------------------------------------------------------------------------------------

    We found 37 secondary diagnosis CC conditions reported among the 24 
cases in MS-DRG 690 that had a principal diagnosis of pyonephrosis with 
ESWL. These CC conditions appear to have contributed to the longer 
length of stay and higher average costs for those 24 cases. As shown in 
the table above, the overall average length of stay for the cases 
reporting these conditions is 6.6 days with average costs of $18,173, 
which is higher, although comparable, to the average length of stay of 
4.8 days and average costs of $14,837 for the cases in MS-DRG 690 that 
had a principal diagnosis of pyonephrosis with ESWL. We note that it 
appears that 1 of the 24 cases had at least 4 secondary diagnosis CC 
conditions (F33.1, I48.1, I50.22, and J96.10) with an average length of 
stay of 12 days and average costs of $55,034, which we believe 
contributed greatly overall to the longer length of stay and higher 
average costs for those secondary diagnosis CC conditions reported 
among the 24 cases.
    Our clinical advisors agree that the resource consumption for the 6 
cases in MS-DRG 689 and the 24 cases in MS-DRG 690 that reported a 
principal diagnosis of pyonephrosis with ESWL cannot be directly 
attributed to ESWL and believe that it is the secondary diagnosis MCC 
and CC conditions that are the major contributing factors to the longer 
average length of stay and higher average costs for these cases.
    We also analyzed claims data for MS-DRGs 691 and 692 (Urinary 
Stones with ESW Lithotripsy with CC/MCC and without CC/MCC, 
respectively) and MS-DRGs 693 and 694 (Urinary Stones without ESW 
Lithotripsy with MCC and without MCC, respectively) to identify claims 
reporting pyonephrosis (ICD-10-CM diagnosis code N13.6) as a secondary 
diagnosis. Our findings are shown in the following table.

            MS-DRGs for Urinary Stones With Secondary Diagnosis of Pyonephrosis With and Without ESWL
----------------------------------------------------------------------------------------------------------------
                                                                     Number of        Average
                             MS-DRG                               times reported  length of stay   Average costs
----------------------------------------------------------------------------------------------------------------
MS-DRG 691--All cases...........................................             140             3.9         $11,997
MS-DRG 691--Cases with secondary diagnosis of pyonephrosis and                 3               8          24,280
 ESWL...........................................................
MS-DRG 692--All cases...........................................             124             2.1           8,326
MS-DRG 693--All cases...........................................           1,315             5.1           9,668
MS-DRG 693--Cases with secondary diagnosis of pyonephrosis......              16             5.5           9,962
MS-DRG 694--All cases...........................................           7,240             2.7           5,263
MS-DRG 694--Cases with secondary diagnosis of pyonephrosis......              89             3.5           6,678
----------------------------------------------------------------------------------------------------------------

    As shown in the table above, in MS-DRG 691, there was a total of 
140 cases with an average length of stay of 3.9 days and average costs 
of $11,997. Of those 140 cases, there were 3 cases that reported 
pyonephrosis as a secondary diagnosis and an ESWL procedure with an 
average length of stay of 8.0 days and average costs of $24,280. There 
was a total of 124 cases found in MS-DRG 692 with an average length of 
stay of 2.1 days and average costs of $8,326. There were no cases in 
MS-DRG 692 that reported pyonephrosis as a secondary diagnosis with an 
ESWL procedure. For MS-DRG 693, there was a total of 1,315 cases with 
an average length of stay of 5.1 days and average costs of $9,668. Of

[[Page 19208]]

those 1,315 cases, there were 16 cases reporting pyonephrosis as a 
secondary diagnosis with an average length of stay of 5.5 days and 
average costs of $9,962. For MS-DRG 694, there was a total of 7,240 
cases with an average length of stay of 2.7 days and average costs of 
$5,263. Of those 7,240 cases, there were 89 cases reporting 
pyonephrosis as a secondary diagnosis with an average length of stay of 
3.5 days and average costs of $6,678.
    Similar to the process described above, we then conducted further 
analysis for the three cases in MS-DRG 691 that reported a secondary 
diagnosis of pyonephrosis with ESWL to determine what factors may be 
contributing to the longer lengths of stay and higher average costs. 
Specifically, we analyzed what other MCC and CC conditions were 
reported across the three cases. We found no other MCC conditions 
reported for those three cases. Our findings for the CC conditions 
reported for those three cases are shown in the table below.

                            Secondary Diagnosis CC Conditions Reported in MS-DRG 691
----------------------------------------------------------------------------------------------------------------
                                                                     Number of    Average length
         ICD-10-CM code                     Description           times reported      of stay      Average costs
----------------------------------------------------------------------------------------------------------------
E44.0...........................  Moderate protein-calorie                     1              15         $52,384
                                   malnutrition.
J96.10..........................  Chronic respiratory failure,                 1               7          15,110
                                   unspecified whether with
                                   hypoxia or hypercapnia.
N13.6...........................  Pyonephrosis..................               2             8.5          28,865
N17.9...........................  Acute kidney failure,                        1               2           5,346
                                   unspecified.
N39.0...........................  Urinary tract infection, site                1               2           5,346
                                   not specified.
Q79.6...........................  Ehlers-Danlos syndrome........               1               2           5,346
                                                                 -----------------------------------------------
    Total.......................  ..............................               7             6.4          20,181
----------------------------------------------------------------------------------------------------------------

    We found six secondary diagnosis CC conditions reported among the 
three cases in MS-DRG 691 that had a secondary diagnosis of 
pyonephrosis with ESWL. These CC conditions appear to have contributed 
to the longer lengths of stay and higher average costs for those three 
cases. As shown in the table above, the overall average length of stay 
for the cases reporting these conditions is 6.4 days with average costs 
of $20,181, which is more consistent with the average length of stay of 
8.0 days and average costs of $24,280 for the cases in MS-DRG 691 that 
had a secondary diagnosis of pyonephrosis with ESWL.
    Our clinical advisors believe that the resource consumption for 
those three cases cannot be directly attributed to ESWL and that it is 
the secondary diagnosis CC conditions reported in addition to 
pyonephrosis, which is also designated as a CC condition, that are the 
major contributing factors for the longer average lengths of stay and 
higher average costs for these cases in MS-DRG 691.
    We did not conduct further analysis for the 16 cases in MS-DRG 693 
or the 89 cases in MS-DRG 694 that reported a secondary diagnosis of 
pyonephrosis because MS-DRGs 693 and 694 do not include ESWL procedures 
and the average length of stay and average costs for those cases were 
consistent with the data findings for all of the cases in their 
assigned MS-DRG.
    As discussed earlier in this section, the requestor suggested that 
ICD-10-CM diagnosis code N13.6 should be grouped to MS-DRGs 691 and 692 
when reported as a principal diagnosis because this grouping will more 
appropriately reflect resource consumption for patients who undergo an 
ESWL procedure for obstructive urinary calculi, while also receiving 
treatment for urinary tract infections. However, based on the results 
of the data analysis and input from our clinical advisors, we believe 
that cases for which ICD-10-CM diagnosis code N13.6 was reported as a 
principal diagnosis or as a secondary diagnosis with an ESWL procedure 
should not be utilized as an indicator for increased utilization of 
resources based on the performance of an ESWL procedure. Rather, we 
believe that the resource consumption is more likely the result of 
secondary diagnosis CC and/or MCC diagnosis codes.
    With respect to the requestor's concern that cases reporting ICD-
10-CM diagnosis code T83.192A (Other mechanical complication of 
indwelling ureteral stent, initial encounter) and an ESWL procedure are 
not appropriately assigned and should be added to the list of principal 
diagnoses for MS-DRGs 691 and 692 (Urinary Stones with ESW Lithotripsy 
with CC/MCC and without CC/MCC, respectively), our clinical advisors 
note that ICD-10-CM diagnosis code T83.192A is not necessarily 
indicative of a patient having urinary stones. As such, they do not 
support adding ICD-10-CM diagnosis code T83.192A to the list of 
principal diagnosis codes for MS-DRGs 691 and 692.
    We analyzed claims data to identify cases reporting ICD-10-CM 
diagnosis code T83.192A as a principal diagnosis with ESWL in MS-DRGs 
698, 699, and 700 (Other Kidney and Urinary Tract Diagnoses with MCC, 
with CC, and without CC/MCC, respectively). Our findings are shown in 
the following table.

 MS-DRGs for Other Kidney and Urinary Tract Diagnoses With Principal Diagnosis of Other Mechanical Complications
                                     of Indwelling Ureteral Stent With ESWL
----------------------------------------------------------------------------------------------------------------
                                                                     Number of        Average
                             MS-DRG                                    cases      length of stay   Average costs
----------------------------------------------------------------------------------------------------------------
MS-DRG 698--All cases...........................................          56,803             6.1         $11,220
MS-DRG 698--Cases with diagnosis code T83.192A reported as                    35             7.1          14,574
 principal diagnosis............................................
MS-DRG 699--All cases...........................................          33,693             4.2           7,348
MS-DRG 699--Cases with diagnosis code T83.192A reported as                    63             4.1           7,652
 principal diagnosis............................................
MS-DRG 699--Cases with diagnosis code T83.192A reported as                     1               3           7,986
 principal diagnosis with ESWL..................................

[[Page 19209]]

 
MS-DRG 700--All cases...........................................           3,719               3           5,356
----------------------------------------------------------------------------------------------------------------

    For MS-DRG 698, there was a total of 56,803 cases reported, with an 
average length of stay of 6.1 days and average costs of $11,220. Of 
these 56,803 cases, 35 cases reported ICD-10-CM diagnosis code T83.192A 
as the principal diagnosis, with an average length of stay of 7.1 days 
and average costs of $14,574. There were no cases that reported an ESWL 
procedure with ICD-10-CM diagnosis code T83.192A as the principal 
diagnosis in MS-DRG 698. For MS-DRG 699, there was a total of 33,693 
cases reported, with an average length of stay of 4.2 days and average 
costs of $7,348. Of the 33,693 cases in MS-DRG 699, there were 63 cases 
that reported ICD-10-CM diagnosis code T83.192A as the principal 
diagnosis, with an average length of stay of 4.1 days and average costs 
of $7,652. There was only 1 case in MS-DRG 699 that reported ICD-10-CM 
diagnosis code T83.192A as the principal diagnosis with an ESWL 
procedure, with an average length of stay of 3 days and average costs 
of $7,986. For MS-DRG 700, there was a total of 3,719 cases reported, 
with an average length of stay of 3 days and average costs of $5,356. 
There were no cases that reported ICD-10-CM diagnosis code T83.192A as 
the principal diagnosis in MS-DRG 700. Of the 98 cases in MS-DRGs 698 
and 699 that reported a principal diagnosis of other mechanical 
complication of indwelling ureteral stent (diagnosis code T83.192A), 
only 1 case also reported an ESWL procedure. Based on the results of 
our data analysis and input from our clinical advisors, we are not 
proposing to add ICD-10-CM diagnosis code T83.192A to the list of 
principal diagnosis codes for MS-DRGs 691 and 692.
    In connection with these requests, our clinical advisors 
recommended that we evaluate the frequency with which ESWL is reported 
in the inpatient setting across all the MS-DRGs. Therefore, we also 
analyzed claims data from the September 2018 update of the FY 2018 
MedPAR file to identify the other MS-DRGs to which claims reporting an 
ESWL procedure were reported. Our findings are shown in the following 
table.

------------------------------------------------------------------------
          MS-DRGs                        MS-DRG description
------------------------------------------------------------------------
654.......................  Major Bladder Procedures with CC.
657.......................  Kidney and Ureter Procedures for Neoplasm
                             with CC.
659, 660, 661.............  Kidney and Ureter Procedures for Non-
                             Neoplasm with MCC, with CC, without CC/MCC,
                             respectively.
662, 663..................  Minor Bladder Procedures with MCC and with
                             CC, respectively.
665, 666..................  Prostatectomy with MCC and with CC,
                             respectively.
668, 669, 670.............  Transurethral Procedures with MCC, with CC,
                             and without CC/MCC, respectively.
671.......................  Urethral Procedures with CC/MCC.
682, 683..................  Renal Failure with MCC and with CC,
                             respectively.
689, 690..................  Kidney and Urinary Tract Infections with MCC
                             and without MCC, respectively.
691, 692..................  Urinary Stones with ESW Lithotripsy with CC/
                             MCC and without CC/MCC, respectively.
696.......................  Kidney and Urinary Tract Signs and Symptoms
                             without MCC.
698, 699, 700.............  Other Kidney and Urinary Tract Diagnoses
                             with MCC, with CC, and without CC/MCC,
                             respectively.
982.......................  Extensive O.R. Procedure Unrelated to
                             Principal Diagnosis with CC.
------------------------------------------------------------------------

    Our findings with respect to the cases reporting an ESWL procedure 
in each of these MS-DRGs, as compared to all cases in the applicable 
MS-DRG, are shown in the table below.

----------------------------------------------------------------------------------------------------------------
                                                                     Number of        Average
                             MS-DRG                               times reported  length of stay   Average costs
----------------------------------------------------------------------------------------------------------------
MS-DRG 654--All cases...........................................           3,838             6.7         $19,805
MS-DRG 654--Cases reporting ESWL................................               1               5           9,102
MS-DRG 657--All cases...........................................           7,242             4.1          14,047
MS-DRG 657--Cases reporting ESWL................................               2               2          19,021
MS-DRG 659--All cases...........................................           7,761             8.1          18,717
MS-DRG 659--Cases reporting ESWL................................              71            11.1          26,366
MS-DRG 660--All cases...........................................          17,617             4.1          10,292
MS-DRG 660--Cases reporting ESWL................................             193               4          13,627
MS-DRG 661--All cases...........................................          12,434             2.3           7,997
MS-DRG 661--Cases reporting ESWL................................             154             2.7          12,639
MS-DRG 662--All cases...........................................             614            10.2          23,110
MS-DRG 662--Cases reporting ESWL................................               1              22          57,520
MS-DRG 663--All cases...........................................           1,349               5          11,213
MS-DRG 663--Cases reporting ESWL................................               2             3.5          15,870
MS-DRG 665--All cases...........................................             589             9.4          21,328
MS-DRG 665--Cases reporting ESWL................................               2            16.5          17,710
MS-DRG 666--All cases...........................................           1,517             5.6          13,060
MS-DRG 666--Cases reporting ESWL................................               2             9.5          16,521
MS-DRG 668--All cases...........................................           2,065               9          20,229

[[Page 19210]]

 
MS-DRG 668--Cases reporting ESWL................................               1               4          19,383
MS-DRG 669--All cases...........................................           5,259             4.9          11,217
MS-DRG 669--Cases reporting ESWL................................               5             2.4          13,006
MS-DRG 670--All cases...........................................           1,707             2.6           7,177
MS-DRG 670--Cases reporting ESWL................................               5               3          18,416
MS-DRG 671--All cases...........................................             367             6.4          13,519
MS-DRG 671--Cases reporting ESWL................................               1               3          29,731
MS-DRG 682--All cases...........................................          97,347             5.7          10,384
MS-DRG 682--Cases reporting ESWL................................               5              10          26,773
MS-DRG 683--All cases...........................................         132,206             3.9           6,450
MS-DRG 683--Cases reporting ESWL................................               4            13.3          19,706
MS-DRG 689--All cases...........................................          68,020             4.8           7,873
MS-DRG 689--Cases reporting ESWL................................              11            13.3          35,510
MS-DRG 690--All cases...........................................         131,999             3.5           5,692
MS-DRG 690--Cases reporting ESWL................................              39             4.9          13,567
MS-DRG 691--All cases...........................................             140             3.9          11,997
MS-DRG 691--Cases reporting ESWL................................             140             3.9          11,997
MS-DRG 692--All cases...........................................             124             2.1           8,326
MS-DRG 692--Cases reporting ESWL................................             124             2.1           8,326
MS-DRG 696--All cases...........................................           5,933             2.9           4,938
MS-DRG 696--Cases reporting ESWL................................               2             2.5           6,238
MS-DRG 698--All cases...........................................          56,803             6.1          11,220
MS-DRG 698--Cases reporting ESWL................................              18             9.2          27,818
MS-DRG 699--All cases...........................................          33,693             4.2           7,348
MS-DRG 699--Cases reporting ESWL................................               9             4.4          10,986
MS-DRG 700--All cases...........................................           3,719               3           5,356
MS-DRG 700--Cases reporting ESWL................................               1               1           7,580
MS-DRG 982--All cases...........................................          16,834             6.3          16,939
MS-DRG 982--Cases reporting ESWL................................               2              11          74,751
----------------------------------------------------------------------------------------------------------------

    Our data analysis indicates that, generally, the subset of cases 
reporting an ESWL procedure appear to have a longer average length of 
stay and higher average costs when compared to all the cases in their 
assigned MS-DRG. However, we note that this same subset of cases also 
reported at least one O.R. procedure and/or diagnosis designated as a 
CC or an MCC, which our clinical advisors believe are contributing 
factors to the longer average lengths of stay and higher average costs, 
with the exception of the case assigned to MS-DRG 700, which is a 
medical MS-DRG and has no CC or MCC conditions in the logic. Therefore, 
our clinical advisors do not believe that cases reporting an ESWL 
procedure should be considered as an indication of increased resource 
consumption for inpatient hospitalizations.
    Our clinical advisors also suggested that we evaluate the reporting 
of ESWL procedures in the inpatient setting over the past few years. We 
analyzed claims data for MS-DRGs 691 and 692 from the FY 2012 through 
the FY 2016 MedPAR files, which were used in our analysis of claims 
data for MS-DRG reclassification requests effective for FY 2014 through 
FY 2018. We note that the analysis findings shown in the following 
table reflect ICD-9-CM, ICD-10-CM and ICD-10-PCS coded claims data.

------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                FY 2014 (version 31)          FY 2015 (version 32)          FY 2016 (version 33)          FY 2017 (version 34)          FY 2018 (version 35)
                                           -----------------------------------------------------------------------------------------------------------------------------------------------------
                  MS-DRG                               Average                       Average                       Average                       Average                       Average
                                             Number    length    Average   Number    length    Average   Number    length    Average   Number    length    Average   Number    length    Average
                                            of cases   of stay    costs   of cases   of stay    costs   of cases   of stay    costs   of cases   of stay    costs   of cases   of stay    costs
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
MS-DRG 691--Urinary Stones with ESW              898      3.77   $10,274       832      3.81   $11,141       812      3.72   $11,534       750      4.06   $11,907       448       3.4   $11,502
 Lithotripsy w CC/MCC.....................
MS-DRG 692--Urinary Stones with ESW              231      2.02     7,292       197      2.14     8,041       133      2.32     9,273       103      2.39     9,398        61       2.3     8,702
 Lithotripsy without CC/MCC...............
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

    The data show a steady decline in the number of cases reporting 
urinary stones with an ESWL procedure for the past 5 years. As 
previously noted, the total number of cases reporting urinary stones 
with an ESWL procedure for MS-DRGs 691 and 692 based on our analysis of 
the September 2018 update of the FY 2018 MedPAR file was 264, which 
again is a decline from the prior year's figures. As discussed 
throughout this section, an ESWL procedure is a non-O.R. procedure 
which currently groups to medical MS-DRGs 691 and 692. Therefore, 
because an ESWL procedure is a non-O.R. procedure and due to decreased 
usage of this procedure in the inpatient setting for the treatment of 
urinary stones, our clinical advisors believe that there is no longer a 
clinical reason to subdivide the MS-DRGs for urinary stones (MS-DRGs 
691, 692, 693, and 694) based on ESWL procedures.
    Therefore, we are proposing to delete MS-DRGs 691 and 692 and to 
revise the titles for MS-DRGs 693 and 694 from ``Urinary Stones without 
ESW Lithotripsy with MCC'' and ``Urinary Stones without ESW Lithotripsy 
without MCC'', respectively to ``Urinary Stones with MCC'' and 
``Urinary Stones without MCC'', respectively.
8. MDC 12 (Diseases and Disorders of the Male Reproductive System): 
Diagnostic Imaging of Male Anatomy
    We received a request to review four ICD-10-CM diagnosis codes 
describing

[[Page 19211]]

body parts associated with male anatomy that are currently assigned to 
MDC 5 (Diseases and Disorders of the Circulatory System) in MS-DRGs 302 
and 303 (Atherosclerosis with MCC and Atherosclerosis without MCC, 
respectively). The four codes are listed in the following table.

------------------------------------------------------------------------
      ICD-10-CM code                      Code description
------------------------------------------------------------------------
R93.811...................  Abnormal radiologic findings on diagnostic
                             imaging of right testicle.
R93.812...................  Abnormal radiologic findings on diagnostic
                             imaging of left testicle.
R93.813...................  Abnormal radiologic findings on diagnostic
                             imaging of testicles, bilateral.
R93.819...................  Abnormal radiologic findings on diagnostic
                             imaging of unspecified testicle.
------------------------------------------------------------------------

    The requestor recommended that the four diagnosis codes shown in 
the table above be considered for assignment to MDC 12 (Diseases and 
Disorders of the Male Reproductive System), consistent with other 
diagnosis codes that include the male anatomy. However, the requestor 
did not suggest a specific MS-DRG assignment within MDC 12.
    We examined claims data from the September 2018 update of the FY 
2018 MedPAR file for MS-DRGs 302 and 303 to identify any cases 
reporting a diagnosis code for abnormal radiologic findings on 
diagnostic imaging of the testicles. We did not find any such cases.
    Our clinical advisors reviewed this request and determined that the 
assignment of diagnosis codes R93.811, R93.812, R93.813, and R93.819 to 
MDC 5 in MS-DRGs 302 and 303 was a result of replication from ICD-9-CM 
diagnosis code 793.2 (Nonspecific (abnormal) findings on radiological 
and other examination of other intrathoracic organs) which was assigned 
to those MS-DRGs. Therefore, our clinical advisors support reassignment 
of these codes to MDC 12. Our clinical advisors agree that this 
reassignment is clinically appropriate because these diagnosis codes 
are specific to the male anatomy, consistent with other diagnosis codes 
in MDC 12 that include the male anatomy. Specifically, our clinical 
advisors suggest reassignment of the four diagnosis codes to MS-DRGs 
729 and 730 (Other Male Reproductive System Diagnoses with CC/MCC and 
without CC/MCC, respectively). Therefore, we are proposing to reassign 
ICD-10-CM diagnosis codes R93.811, R93.812, R93.813, and R93.819 from 
MDC 5 in MS-DRGs 302 and 303 to MDC 12 in MS-DRGs 729 and 730.
9. MDC 14 (Pregnancy, Childbirth and the Puerperium): Proposed 
Reassignment of Diagnosis Code O99.89
    We received a request to review the MS-DRG assignment for cases 
reporting ICD-10-CM diagnosis code O99.89 (Other specified diseases and 
conditions complicating pregnancy, childbirth and the puerperium). The 
requestor stated that it is experiencing MS-DRG shifts to MS-DRG 769 
(Postpartum and Post Abortion Diagnoses with O.R. Procedure) as a 
result of the new obstetric MS-DRG logic when ICD-10-CM diagnosis code 
O99.89 is reported as a principal diagnosis in the absence of a 
delivery code on the claim (to indicate the patient delivered during 
that hospitalization), or when there is no other secondary diagnosis 
code on the claim indicating that the patient is in the postpartum 
period. According to the requestor, claims reporting ICD-10-CM 
diagnosis code O99.89 as a principal diagnosis for conditions described 
as occurring during the antepartum period that are reported with an 
O.R. procedure are grouping to MS-DRG 769. In the example provided by 
the requestor, ICD-10-CM diagnosis code O99.89 was reported as the 
principal diagnosis, with ICD-10-CM diagnosis codes N13.2 
(Hydronephrosis with renal and ureteral calculous obstruction) and 
Z3A.25 (25 weeks of gestation of pregnancy) reported as secondary 
diagnoses with ICD-10-PCS procedure code 0T68DZ (Dilation of right 
ureter with intraluminal device, endoscopic approach), resulting in 
assignment to MS-DRG 769. The requestor noted that, in the FY 2019 
IPPS/LTCH PPS final rule (83 FR 41212), we stated ``If there was not a 
principal diagnosis of abortion reported on the claim, the logic asks 
if there was a principal diagnosis of an antepartum condition reported 
on the claim. If yes, the logic then asks if there was an O.R. 
procedure reported on the claim. If yes, the logic assigns the case to 
one of the proposed new MS-DRGs 817, 818, or 819.'' In the requestor's 
example, there were not any codes reported to indicate that the patient 
was in the postpartum period, nor was there a delivery code reported on 
the claim. Therefore, the requestor suggested that a more appropriate 
assignment for ICD-10-CM diagnosis code O99.89 may be MS-DRGs 817, 818, 
and 819 (Other Antepartum Diagnoses with O.R. Procedure with MCC, with 
CC and without CC/MCC, respectively).
    In the FY 2019 IPPS/LTCH PPS final rule (83 FR 41202 through 
41216), we finalized our proposal to restructure the MS-DRGs within MDC 
14 (Pregnancy, Childbirth and the Puerperium) which established new 
concepts for the GROUPER logic. As a result of the modifications made, 
ICD-10-CM diagnosis code O99.89 was classified as a postpartum 
condition and is currently assigned to MS-DRG 769 (Postpartum and Post 
Abortion Diagnoses with O.R. Procedure) and MS-DRG 776 (Postpartum and 
Post Abortion Diagnoses without O.R. Procedure) under the Version 36 
ICD-10 MS-DRGs. As also discussed and displayed in Diagram 2 in the FY 
2019 IPPS/LTCH PPS final rule (83 FR 41212 through 41213), the logic 
asks if there was a principal diagnosis of a postpartum condition 
reported on the claim. If yes, the logic then asks if there was an O.R. 
procedure reported on the claim. If yes, the logic assigns the case to 
MS-DRG 769. If no, the logic assigns the case to MS-DRG 776. Therefore, 
the MS-DRG assignment for the example provided by the requestor is 
grouping accurately according to the current GROUPER logic.
    We analyzed claims data from the September 2018 update of the FY 
2018 MedPAR file for cases reporting diagnosis code O99.89 in MS-DRGs 
769 and 776 as a principal diagnosis or as a secondary diagnosis. Our 
findings are shown in the following table.

[[Page 19212]]



Postpartum MS-DRGs With Principal or Secondary Diagnosis of Other Specified Diseases and Conditions Complicating
                                    Pregnancy, Childbirth and the Puerperium
----------------------------------------------------------------------------------------------------------------
                                                                     Number of    Average length
                             MS-DRG                                    cases          of stay      Average costs
----------------------------------------------------------------------------------------------------------------
MS-DRG 769--All cases...........................................              91             4.3         $11,015
MS-DRG 769--Cases reporting diagnosis code O99.89 as principal                 7             5.6          19,059
 diagnosis......................................................
MS-DRG 769--Cases reporting diagnosis code O99.89 as secondary                61            12.1          41,717
 diagnosis......................................................
MS-DRG 776--All cases...........................................             560             3.1           5,332
MS-DRG 776--Cases reporting diagnosis code O99.89 as principal                57             3.5           6,439
 diagnosis......................................................
----------------------------------------------------------------------------------------------------------------

    As shown in the table above, we found a total of 91 cases in MS-DRG 
769 with an average length of stay of 4.3 days and average costs of 
$11,015. Of these 91 cases, 7 cases reported ICD-10-CM diagnosis code 
O99.89 as a principal diagnosis with an average length of stay of 5.6 
days and average costs of $19,059, and 61 cases reported ICD-10-CM 
diagnosis code O99.89 as a secondary diagnosis with an average length 
of stay of 12.1 days and average costs of $41,717. For MS-DRG 776, we 
found a total of 560 cases with an average length of stay of 3.1 days 
and average costs of $5,332. Of these 560 cases, 57 cases reported ICD-
10-CM diagnosis code O99.89 as a principal diagnosis with an average 
length of stay of 3.5 days and average costs of $6,439. There were no 
cases reporting ICD-10-CM diagnosis code O99.89 as a secondary 
diagnosis in MS-DRG 776.
    For MS-DRG 769, the data show that the 68 cases reporting ICD-10-CM 
diagnosis code O99.89 as a principal or secondary diagnosis have a 
longer average length of stay and higher average costs compared to all 
the cases in MS-DRG 769. For MS-DRG 776, the data show that the 57 
cases reporting a principal diagnosis of ICD-10-CM diagnosis code 
O99.89 have a similar average length of stay compared to all the cases 
in MS-DRG 776 (3.5 days versus 3.1 days) and average costs that are 
consistent with the average costs of all cases in MS-DRG 776 ($6,439 
versus $5,332).
    We note that the description for ICD-10-CM diagnosis code O99.89 
``Other specified diseases and conditions complicating pregnancy, 
childbirth and the puerperium'', describes conditions that may occur 
during the antepartum period (pregnancy), during childbirth, or during 
the postpartum period (puerperium). In addition, in the ICD-10-CM 
Tabular List of Diseases, there is an inclusion term at subcategory 
O99.8- instructing users that the reporting of any diagnosis codes in 
that subcategory is intended for conditions that are reported in 
certain ranges of the classification. Specifically, the inclusion term 
states ``Conditions in D00-D48, H00-H95, M00-N99, and Q00-Q99.'' There 
is also an instructional note to ``Use additional code to identify 
condition.'' As a result, ICD-10-CM diagnosis code O99.89 may be 
reported to identify conditions that occur during the antepartum period 
(pregnancy), during childbirth, or during the postpartum period 
(puerperium). However, it is not restricted to the reporting of 
obstetric specific conditions only. In the example provided by the 
requestor, ICD-10-CM diagnosis code O99.89 was reported as the 
principal diagnosis with ICD-10-CM diagnosis code N13.2 (Hydronephrosis 
with renal and ureteral calculous obstruction) as a secondary 
diagnosis. ICD-10-CM diagnosis code N13.2 is within the code range 
referenced earlier in this section (M00-N99) and qualifies as an 
appropriate condition for reporting according to the instruction.
    As noted earlier, ICD-10-CM diagnosis code O99.89 is intended to 
report conditions that occur during the antepartum period (pregnancy), 
during childbirth, or during the postpartum period (puerperium) and is 
not restricted to the reporting of obstetric specific conditions only. 
However, because the diagnosis code description includes three distinct 
obstetric related stages, it is not clear what stage the patient is in 
by this single code. For example, upon review of subcategory O99.8-, we 
recognized that the other ICD-10-CM diagnosis code sub-subcategories 
are expanded to include unique codes that identify the condition as 
occurring or complicating pregnancy, childbirth or the puerperium. 
Specifically, sub-subcategory O99.81- (Abnormal glucose complicating 
pregnancy, childbirth, and the puerperium) is expanded to include the 
following ICD-10-CM diagnosis codes.

------------------------------------------------------------------------
      ICD-10-CM code                      Code description
------------------------------------------------------------------------
O99.810...................  Abnormal glucose complicating pregnancy.
O99.814...................  Abnormal glucose complicating childbirth.
O99.815...................  Abnormal glucose complicating the
                             puerperium.
------------------------------------------------------------------------

    The codes listed above specifically identify at what stage the 
abnormal glucose was a complicating condition. Because each code 
uniquely identifies a stage, the code can be easily classified under 
MDC 14 as an antepartum condition (ICD-10-CM diagnosis code O99.810), 
occurring during a delivery episode (ICD-10-CM diagnosis code O99.814), 
or as a postpartum condition (ICD-10-CM diagnosis code O99.815). The 
same is not true for ICD-10-CM diagnosis code O99.89 because it 
includes all three stages in the single code.
    Therefore, we examined the number and type of secondary diagnoses 
reported with ICD-10-CM diagnosis code O99.89 as a principal diagnosis 
for MS-DRGs 769 and 776 to identify how many secondary diagnoses were 
related to other obstetric conditions and how many were related to non-
obstetric conditions.

[[Page 19213]]



--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                             Number of
                                                             secondary       Number of       Number of       Number of       Number of       Number of
                                                             diagnoses     secondary  OB   secondary  OB   secondary  OB   secondary  OB  secondary non-
                         MS-DRG                            reported with      related         related         related         related       OB  related
                                                            O99.89  as       diagnoses      antepartum      postpartum       delivery        diagnoses
                                                             principal                       diagnoses       diagnoses       diagnoses
--------------------------------------------------------------------------------------------------------------------------------------------------------
MS-DRG 769..............................................              59              13              11               1               1              46
MS-DRG 776..............................................             376             113              88              19               6             263
--------------------------------------------------------------------------------------------------------------------------------------------------------

    As shown in the table above, there was a total of 59 secondary 
diagnoses reported with diagnosis code O99.89 as the principal 
diagnosis for MS-DRG 769. Of those 59 secondary diagnoses, 13 were 
obstetric (OB) related diagnosis codes (11 antepartum, 1 postpartum and 
1 delivery) and 46 were non-obstetric (Non-OB) related diagnosis codes. 
For MS-DRG 776, there was a total of 376 secondary diagnoses reported 
with diagnosis code O99.89 as the principal diagnosis. Of those 376 
secondary diagnoses, 113 were obstetric (OB) related diagnosis codes 
(88 antepartum, 19 postpartum and 6 delivery) and 263 were non-
obstetric (Non-OB) related diagnosis codes.
    The data reflect that, for MS-DRGs 769 and 776, the number of 
secondary diagnoses identified as OB-related antepartum diagnoses is 
greater than the number of secondary diagnoses identified as OB-related 
postpartum diagnoses (99 antepartum diagnoses versus 20 postpartum 
diagnoses). The data also indicate that, of the 435 secondary diagnoses 
reported with ICD-10-CM diagnosis code O99.89 as the principal 
diagnosis, 309 (71 percent) of those secondary diagnoses were non-OB-
related diagnosis codes. Because there was a greater number of 
secondary diagnoses identified as OB-related antepartum diagnoses 
compared to the OB-related postpartum diagnoses within the postpartum 
MS-DRGs when ICD-10-CM diagnosis code O99.89 was reported as the 
principal diagnosis, we performed further analysis of diagnosis code 
O99.89 within the antepartum MS-DRGs.
    Under the Version 35 ICD-10 MS-DRGs, diagnosis code O99.89 was 
classified as an antepartum condition and was assigned to MS-DRG 781 
(Other Antepartum Diagnoses with Medical Complications). Therefore, we 
also analyzed claims data for MS-DRGs 817, 818 and 819 (Other 
Antepartum Diagnoses with O.R. Procedure with MCC, with CC and without 
CC/MCC, respectively) and MS-DRGs 831, 832, and 833 (Other Antepartum 
Diagnoses without O.R. Procedure with MCC, with CC and without CC/MCC, 
respectively) for cases reporting ICD-10-CM diagnosis code O99.89 as a 
secondary diagnosis. We note that the analysis for the proposed FY 2020 
ICD-10 MS-DRGs is based upon the September 2018 update of the FY 2018 
MedPAR claims data that were grouped through the ICD-10 MS-DRG GROUPER 
Version 36. Our findings are shown in the table below.

 Antepartum MS-DRGs With Secondary Diagnosis of Other Specified Diseases and Conditions Complicating Pregnancy,
                                          Childbirth and the Puerperium
----------------------------------------------------------------------------------------------------------------
                                                                     Number of    Average length
                             MS-DRG                                    cases          of stay      Average costs
----------------------------------------------------------------------------------------------------------------
MS-DRG 817--All cases...........................................              63             5.7         $14,948
MS-DRG 817--Cases reporting diagnosis code O99.89 as secondary                 8            10.8          24,359
 diagnosis......................................................
MS-DRG 818--All cases...........................................              78             4.1           9,343
MS-DRG 818--Cases reporting diagnosis code O99.89 as secondary                 7             3.4          14,182
 diagnosis......................................................
MS-DRG 819--All cases...........................................              25             2.2           5,893
MS-DRG 819--Cases reporting diagnosis code O99.89 as secondary                 1               1           4,990
 diagnosis......................................................
MS-DRG 831--All cases...........................................             747             4.8           7,714
MS-DRG 831--Cases reporting diagnosis code O99.89 as secondary               127             5.4           7,050
 diagnosis......................................................
MS-DRG 832--All cases...........................................           1,142             3.6           5,159
MS-DRG 832--Cases reporting diagnosis code O99.89 as secondary               145             4.2           5,656
 diagnosis......................................................
MS-DRG 833--All cases...........................................             537             2.6           3,807
MS-DRG 833--Cases reporting diagnosis code O99.89 as secondary                47             2.6           3,307
 diagnosis......................................................
----------------------------------------------------------------------------------------------------------------

    As shown in the table above, we found a total of 63 cases in MS-DRG 
817 with an average length of stay of 5.7 days and average costs of 
$14,948. Of these 63 cases, there were 8 cases reporting ICD-10-CM 
diagnosis code O99.89 as a secondary diagnosis with an average length 
of stay of 10.8 days and average costs of $24,359. For MS-DRG 818, we 
found a total of 78 cases with an average length of stay of 4.1 days 
and average costs of $9,343. Of these 78 cases, there were 7 cases 
reporting ICD-10-CM diagnosis code O99.89 as a secondary diagnosis with 
an average length of stay of 3.4 days and average costs of $14,182. For 
MS-DRG 819, we found a total of 25 cases with an average length of stay 
of 2.2 days and average costs of $5,893. Of these 25 cases, there was 1 
case reporting ICD-10-CM diagnosis code O99.89 as a secondary diagnosis 
with an average length of stay of 1 day and average costs of $4,990.
    For MS-DRG 831, we found a total of 747 cases with an average 
length of stay of 4.8 days and average costs of $7,714. Of these 747 
cases, there were 127 cases reporting ICD-10-CM diagnosis code O99.89 
as a secondary diagnosis with an average length of stay of 5.4 days and 
average costs of $7,050. For MS-DRG 832, we found a total of 1,142 
cases with an average length of stay of 3.6 days and average costs of 
$5,159. Of these 1,142 cases, there were 145 cases reporting ICD-10-CM 
diagnosis code O99.89 as a secondary diagnosis with an average length 
of stay of 4.2 days and average costs of $5,656. For MS-DRG 833, we 
found a total of 537 cases with an average length of stay of 2.6 days 
and average costs of $3,807. Of these 537 cases, there were 47 cases 
reporting ICD-10-CM diagnosis code O99.89 as a secondary diagnosis with 
an average length of stay of 2.6 days and average costs of $3,307.

[[Page 19214]]

    Overall, there was a total of 335 cases reporting ICD-10-CM 
diagnosis code O99.89 as a secondary diagnosis within the antepartum 
MS-DRGs. Of those 335 cases, 16 cases involved an O.R. procedure and 
319 cases did not involve an O.R. procedure. The data indicate that 
ICD-10-CM diagnosis code O99.89 is reported more often as a secondary 
diagnosis within the antepartum MS-DRGs (335 cases) than it is reported 
as a principal or secondary diagnosis within the postpartum MS-DRGs 
(125 cases).
    Our clinical advisors believe that, because ICD-10-CM diagnosis 
code O99.89 can be reported during the antepartum period (pregnancy), 
during childbirth, or during the postpartum period (puerperium), there 
is not a clear clinical indication as to which set of MS-DRGs 
(antepartum, delivery, or postpartum) would be the most appropriate 
assignment for this diagnosis code. They recommended that we 
collaborate with the National Center for Health Statistics (NCHS) at 
the Centers for Disease Control and Prevention (CDC), in consideration 
of a proposal to possibly expand ICD-10-CM diagnosis code O99.89 to 
become a sub-subcategory that would result in the creation of unique 
codes with a sixth digit character to specify which obstetric related 
stage the patient is in. For example, under subcategory O99.8-, a 
proposed new sub-subcategory for ICD-10-CM diagnosis code O99.89- could 
include the following proposed new diagnosis codes:
     O99.890 (Other specified diseases and conditions 
complicating pregnancy);
     O99.894 (Other specified diseases and conditions 
complicating childbirth); and
     O99.85 (Other specified diseases and conditions 
complicating the puerperium).
    If such a proposal to create this new sub-subcategory and new 
diagnosis codes were approved and finalized, it would enable improved 
data collection and more appropriate MS-DRG assignment, consistent with 
the current MS-DRG assignments of the existing obstetric related 
diagnosis codes. For instance, a new diagnosis code described as 
``complicating pregnancy'' would be clinically aligned with the 
antepartum MS-DRGs, a new diagnosis code described as ``complicating 
childbirth'' would be clinically aligned with the delivery MS-DRGs, and 
a new diagnosis code described as ``complicating the puerperium'' would 
be clinically aligned with the postpartum MS-DRGs. (We note that all 
requests for new diagnosis codes require that a proposal be approved 
for discussion at a future ICD-10 Coordination and Maintenance 
Committee meeting.)
    While our clinical advisors could not provide a strong clinical 
justification for classifying ICD-10-CM diagnosis code O99.89 as an 
antepartum condition versus as a postpartum condition for the reasons 
described above, they did consider the claims data to be informative as 
to how the diagnosis code is being reported for obstetric patients. In 
analyzing both the postpartum MS-DRGs and the antepartum MS-DRGs 
discussed earlier in this section, they agreed that the data clearly 
show that ICD-10-CM diagnosis code O99.89 is reported more frequently 
as a secondary diagnosis within the antepartum MS-DRGs than it is 
reported as a principal or secondary diagnosis within the postpartum 
MS-DRGs.
    Based on our analysis of claims data and input from our clinical 
advisors, we are proposing to reclassify ICD-10-CM diagnosis code 
O99.89 from a postpartum condition to an antepartum condition under MDC 
14. If finalized, ICD-10-CM diagnosis code O99.89 would follow the 
logic as described in the FY 2019 IPPS/LTCH PPS final rule (83 FR 
41212) which asks if there was a principal diagnosis of an antepartum 
condition reported on the claim. If yes, the logic then asks if there 
was an O.R. procedure reported on the claim. If yes, the logic assigns 
the case to MS-DRG 817, 818, or 819. If no (there was not an O.R. 
procedure reported on the claim), the logic assigns the case to MS-DRG 
831, 832, or 833.
10. MDC 22 (Burns): Skin Graft to Perineum for Burn
    We received a request to add seven ICD-10-PCS procedure codes that 
describe a skin graft to the perineum to MS-DRG 927 (Extensive Burns Or 
Full Thickness Burns with MV >96 Hours with Skin Graft) and MS-DRGs 928 
and 929 (Full Thickness Burn with Skin Graft Or Inhalation Injury with 
CC/MCC and without CC/MCC, respectively) in MDC 22. The seven procedure 
codes are listed in the following table.

------------------------------------------------------------------------
      ICD-10-PCS code                     Code description
------------------------------------------------------------------------
0HR9X73...................  Replacement of perineum skin with autologous
                             tissue substitute, full thickness, external
                             approach.
0HR9X74...................  Replacement of perineum skin with autologous
                             tissue substitute, partial thickness,
                             external approach.
0HR9XJ3...................  Replacement of perineum skin with synthetic
                             substitute, full thickness, external
                             approach.
0HR9XJ4...................  Replacement of perineum skin with synthetic
                             substitute, partial thickness, external
                             approach.
0HR9XJZ...................  Replacement of perineum skin with synthetic
                             substitute, external approach.
0HR9XK3...................  Replacement of perineum skin with non-
                             autologous tissue substitute, full
                             thickness, external approach.
0HR9XK4...................  Replacement of perineum skin with non-
                             autologous tissue substitute, partial
                             thickness, external approach.
------------------------------------------------------------------------

    These seven procedure codes are currently assigned to MS-DRGs 746 
and 747 (Vagina, Cervix and Vulva Procedures with CC/MCC and without 
CC/MCC, respectively). In addition, when reported in conjunction with a 
principal diagnosis in MDC 21 (Injuries, Poisonings and Toxic Effects 
of Drugs), these codes group to MS-DRGs 907, 908, and 909 (Other O.R. 
Procedures For Injuries with MCC, with CC and without CC/MCC, 
respectively), and when reported in conjunction with a principal 
diagnosis in MDC 24 (Multiple Significant Trauma), these codes group to 
MS-DRGs 957, 958, and 959 (Other O.R. Procedures For Multiple 
Significant Trauma with MCC, with CC and without CC/MCC, respectively). 
In addition, these procedures are designated as non-extensive O.R. 
procedures and are assigned to MS-DRGs 987, 988 and 989 (Non-Extensive 
O.R. Procedure Unrelated to Principal Diagnosis with MCC, with CC, and 
without CC/MCC, respectively) when a principal diagnosis that is 
unrelated to the procedure is reported on the claim.
    The requestor provided an example in which it identified one case 
where a patient underwent debridement and split thickness skin graft 
(STSG) to the perineum area (only), and expressed concern that the case 
did not route to MS-DRGs 928 and 929 to recognize operating room 
resources. (We note that the requestor did not specify the diagnosis 
associated with this case nor the MS-DRG to which this one case was 
grouped.) The requestor stated that providers may document various 
terminologies for this anatomic site,

[[Page 19215]]

including perineum, groin, and buttocks crease; therefore, when a 
provider deems a burn to affect the perineum as opposed to the groin or 
buttock crease, cases should route to MS-DRGs which compensate 
hospitals for skin grafting operating room resources. Therefore, the 
requestor recommended that the cited seven ICD-10-PCS codes be added to 
the list of procedure codes for a skin graft within MS-DRGs 927, 928, 
and 929.
    We reviewed this request by analyzing claims data from the 
September 2018 update of the FY 2018 MedPAR file for cases reporting 
any of the above seven procedure codes in MS-DRGs 746, 747, 907, 908, 
909, 957, 958, 959, 987, 988, and 989. Our findings are shown in the 
following table.

                                   Cases Involving Skin Graft to the Perineum
----------------------------------------------------------------------------------------------------------------
                                                                     Number of    Average length
                             MS-DRG                                    cases          of stay      Average costs
----------------------------------------------------------------------------------------------------------------
MS-DRG 746--All cases...........................................           1,344               5         $11,847
MS-DRG 746--Cases with skin graft to the perineum procedure.....               1               2          10,830
MS-DRG 907--All cases...........................................           7,843              10          28,919
MS-DRG 907--Cases with skin graft to the perineum procedure.....               1               8          21,909
MS-DRG 908--All cases...........................................           9,286             5.3          14,601
MS-DRG 908--Cases with skin graft to the perineum procedure.....               1               6           8,410
MS-DRG 988--All cases...........................................           8,391             5.7          12,294
MS-DRG 988--Cases with skin graft to the perineum procedure.....               2               3           6,906
MS-DRG 989--All cases...........................................           1,551             3.1           8,171
MS-DRG 989--Cases with skin graft to the perineum procedure.....               1               7          14,080
----------------------------------------------------------------------------------------------------------------

    As shown in the table above, the overall volume of cases reporting 
a skin graft to the perineum procedure is low, with a total of 6 cases 
found. In MS-DRG 746, we found a total of 1,344 cases with an average 
length of stay of 5 days and average costs of $11,847. The single case 
reporting a skin graft to the perineum procedure in MS-DRG 746 had a 
length of stay of 2 days and a cost of $10,830. In MS-DRG 907, we found 
a total of 7,843 cases with an average length of stay of 10 days and 
average costs of $28,919. The single case reporting a skin graft to the 
perineum procedure in MS-DRG 907 had a length of stay of 8 days and a 
cost of $21,909. In MS-DRG 908, we found a total of 9,286 cases with an 
average length of stay of 5.3 days and average costs of $14,601. The 
single case reporting a skin graft to the perineum procedure in MS-DRG 
908 had a length of stay of 6 days and a cost of $8,410. In MS-DRG 988, 
we found a total of 8,391 cases with an average length of stay of 5.7 
days and average costs of $12,294. The 2 cases reporting a skin graft 
to the perineum procedure in MS-DRG 988 had an average length of stay 
of 3 days and average costs of $6,906. In MS-DRG 989, we found a total 
of 1,551 cases with an average length of stay of 3.1 days and average 
costs of $8,171. The single case reporting a skin graft to the perineum 
procedure in MS-DRG 989 had a length of stay of 7 day and a cost of 
$14,080. We found no cases reporting a skin graft to the perineum 
procedure in MS-DRG 747, 909, 957, 958, 959, or 987. Cases reporting a 
skin graft to the perineum procedure generally had shorter length of 
stays and lower average costs than those of their assigned MS-DRGs 
overall.
    We then analyzed claims data for MS-DRGs 927, 928, and 929 (the MS-
DRGs to which the requestor suggested that these cases group) for all 
cases reporting a procedure describing a skin graft to the perineum 
listed in the table above to consider how the resources involved in the 
cases reporting a procedure describing a skin graft to the perineum 
compared to those of all cases in MS-DRGs 927, 928, and 929. Our 
findings are shown in the following table.

----------------------------------------------------------------------------------------------------------------
                                                                     Number of    Average length
                             MS-DRG                                    cases          of stay      Average costs
----------------------------------------------------------------------------------------------------------------
MS-DRG 927--All cases...........................................             146            30.9        $147,903
MS-DRG 928--All cases...........................................           1,149            15.7          45,523
MS-DRG 928--Cases with skin graft to the perineum procedure.....               5              39          64,041
MS-DRG 929--All cases...........................................             296             7.9          21,474
----------------------------------------------------------------------------------------------------------------

    As shown in the table above, for MS-DRG 927, we found a total of 
146 cases with an average length of stay of 30.9 days and average costs 
of $147,903; no cases reporting a skin graft to the perineum procedure 
were found. For MS-DRG 928, we found a total of 1,149 cases with an 
average length of stay of 15.7 days and average costs of $45,523. We 
found 5 cases reporting a skin graft to the perineum procedure with an 
average length of stay of 39 days and average costs of $64,041. For MS-
DRG 929, we found a total of 296 cases with an average length of stay 
of 7.9 days and average costs of $21,474; and no cases reporting a skin 
graft to the perineum procedure were found. We note that none of the 5 
cases reporting a skin graft to the perineum in MS-DRGs 927, 928, and 
929 reported a skin graft to the perineum procedure as the only 
operating room procedure. Therefore, it is not possible to determine 
how much of the operating room resources for these 5 cases were 
attributable to the skin graft to the perineum procedure.
    Our clinical advisors reviewed the claims data described above and 
noted that none of the cases reporting the seven identified procedure 
codes that grouped to MS-DRGs 746, 907, 908, 988, and 989 (listed in 
the table above) had a principal or secondary diagnosis of a burn, 
which suggests that these skin grafts were not performed to treat a 
burn. Therefore, our clinical advisors believe that it would not be 
appropriate for these cases that report a skin graft to the perineum 
procedure to group to MS-DRGs 927, 928, and 929, which describe burns. 
Our clinical advisors state that the seven ICD-10-PCS procedure codes 
that describe a skin graft to the perineum are more clinically aligned 
with the other procedures in MS-DRGs 746 and 747, to which they are 
currently assigned. Therefore, we are

[[Page 19216]]

not proposing to add the seven identified procedure codes to MS-DRGs 
927, 928, and 929.
11. MDC 23 (Factors Influencing Health Status and Other Contacts With 
Health Services): Proposed Assignment of Diagnosis Code R93.89
    We received a request to consider reassignment of ICD-10-CM 
diagnosis code R93.89 (Abnormal finding on diagnostic imaging of other 
specified body structures) from MDC 5 (Diseases and Disorders of the 
Circulatory System) in MS-DRGs 302 and 303 (Atherosclerosis with and 
without MCC and Atherosclerosis without MCC, respectively) to MDC 23 
(Factors Influencing Health Status and Other Contact with Health 
Services), consistent with other diagnosis codes that include abnormal 
findings. However, the requestor did not suggest a specific MS-DRG 
assignment within MDC 23.
    We examined claims data from the September 2018 update of the FY 
2018 MedPAR file for MS-DRGs 302 and 303 and identified cases reporting 
diagnosis code R93.89. Our findings are shown in the following table.

----------------------------------------------------------------------------------------------------------------
                                                                     Number of    Average length
                             MS-DRG                                    cases          of stay      Average costs
----------------------------------------------------------------------------------------------------------------
MS-DRG 302--All cases...........................................           3,750             3.8          $7,956
MS-DRG 302--Cases reporting diagnosis code R93.89...............               3             7.7          10,818
MS-DRG 303--All cases...........................................          12,986             2.3           4,920
MS-DRG 303--Cases reporting diagnosis code R93.89...............              10               2           3,416
----------------------------------------------------------------------------------------------------------------

    As shown in the table, for MS-DRG 302, there was a total of 3,750 
cases with an average length of stay of 3.8 days and average costs of 
$7,956. Of these 3,750 cases, there were 3 cases reporting abnormal 
finding on diagnostic imaging of other specified body structures, with 
an average length of stay 7.7 days and average costs of $10,818. For 
MS-DRG 303, there was a total of 12,986 cases with an average length of 
stay of 2.3 days and average costs of $4,920. Of these 12,986 cases, 
there were 10 cases reporting abnormal finding on diagnostic imaging of 
other specified body structures, with an average length of stay 2 days 
and average costs of $3,416.
    Our clinical advisors reviewed this request and determined that the 
assignment of diagnosis code R93.89 to MDC 5 in MS-DRGs 302 and 303 was 
a result of replication from ICD-9-CM diagnosis code 793.2 (Nonspecific 
(abnormal) findings on radiological and other examination of other 
intrathoracic organs), which was assigned to those MS-DRGs. Therefore, 
they support reassignment of diagnosis code R93.89 to MDC 23. Our 
clinical advisors agree this reassignment is clinically appropriate as 
it is consistent with other diagnosis codes in MDC 23 that include 
abnormal findings from other nonspecified sites. Specifically, our 
clinical advisors suggest reassignment of diagnosis code R89.93 to MS-
DRGs 947 and 948 (Signs and Symptoms with and without MCC, 
respectively). Therefore, we are proposing to reassign ICD-10-CM 
diagnosis code R93.89 from MDC 5 in MS-DRGs 302 and 303 to MDC 23 in 
MS-DRGs 947 and 948.
12. Review of Procedure Codes in MS-DRGs 981 Through 983 and 987 
Through 989
a. Adding Procedure Codes and Diagnosis Codes Currently Grouping to MS-
DRGs 981 Through 983 or MS-DRGs 987 Through 989 into MDCs
    We annually conduct a review of procedures producing assignment to 
MS-DRGs 981 through 983 (Extensive O.R. Procedure Unrelated to 
Principal Diagnosis with MCC, with CC, and without CC/MCC, 
respectively) or MS-DRGs 987 through 989 (Nonextensive O.R. Procedure 
Unrelated to Principal Diagnosis with MCC, with CC, and without CC/MCC, 
respectively) on the basis of volume, by procedure, to see if it would 
be appropriate to move cases reporting these procedure codes out of 
these MS-DRGs into one of the surgical MS-DRGs for the MDC into which 
the principal diagnosis falls. The data are arrayed in two ways for 
comparison purposes. We look at a frequency count of each major 
operative procedure code. We also compare procedures across MDCs by 
volume of procedure codes within each MDC. We use this information to 
determine which procedure codes and diagnosis codes to examine.
    We identify those procedures occurring in conjunction with certain 
principal diagnoses with sufficient frequency to justify adding them to 
one of the surgical MS-DRGs for the MDC in which the diagnosis falls. 
We also consider whether it would be more appropriate to move the 
principal diagnosis codes into the MDC to which the procedure is 
currently assigned. Based on the results of our review of the claims 
data from the September 2018 update of the FY 2018 MedPAR file, we are 
proposing to move the cases reporting the procedures and/or principal 
diagnosis codes described below from MS-DRGs 981 through 983 or MS-DRGs 
987 through 989 into one of the surgical MS-DRGs for the MDC into which 
the principal diagnosis or procedure is assigned.
(1) Gastrointestinal Stromal Tumors With Excision of Stomach and Small 
Intestine
    Gastrointestinal stromal tumors (GIST) are tumors of connective 
tissue, and are currently assigned to MDC 8 (Diseases and Disorders of 
the Musculoskeletal System and Connective Tissue). The ICD-10-CM 
diagnosis codes describing GIST are listed in the table below.

------------------------------------------------------------------------
 ICD-10-CM  diagnosis code                Code description
------------------------------------------------------------------------
C49.A0....................  Gastrointestinal stromal tumor, unspecified
                             site.
C49.A1....................  Gastrointestinal stromal tumor of esophagus.
C49.A2....................  Gastrointestinal stromal tumor of stomach.
C49.A3....................  Gastrointestinal stromal tumor of small
                             intestine.
C49.A4....................  Gastrointestinal stromal tumor of large
                             intestine.
C49.A5....................  Gastrointestinal stromal tumor of rectum.
C49.A9....................  Gastrointestinal stromal tumor of other
                             sites.
------------------------------------------------------------------------


[[Page 19217]]

    During our review of cases that group to MS-DRGs 981 through 983, 
we noted that when procedures describing open excision of the stomach 
or small intestine (ICD-10-PCS procedure codes 0DB60ZZ (Excision of 
stomach, open approach) and 0DB80ZZ (Excision of small intestine, open 
approach)) were reported with a principal diagnosis of GIST, the cases 
group to MS-DRGs 981 through 983. These two excision codes are assigned 
to several MDCs, as listed in the table below. Whenever there is a 
surgical procedure reported on the claim, which is unrelated to the MDC 
to which the case was assigned based on the principal diagnosis, it 
results in an MS-DRG assignment to a surgical class referred to as 
``unrelated operating room procedures''.

                       DRG Assignments for ICD-10-PCS Procedure Codes 0DB60ZZ and 0DB80ZZ
----------------------------------------------------------------------------------------------------------------
             MDC                            DRG                                DRG Description
----------------------------------------------------------------------------------------------------------------
5............................  264.........................  Other Circulatory O.R. Procedures.
6............................  326-328.....................  Stomach, Esophageal and Duodenal Procedures.
10...........................  619-621.....................  Procedures for Obesity.
17...........................  820-822.....................  Lymphoma and Leukemia with Major Procedure.
17...........................  826-828.....................  Myeloproliferative Disorders or Poorly
                                                              Differentiated Neoplasms with Major Procedure.
21...........................  907-909.....................  Other O.R. Procedures for Injuries.
24...........................  957-959.....................  Other Procedures for Multiple Significant Trauma.
----------------------------------------------------------------------------------------------------------------

    We first examined cases that reported a principal diagnosis of GIST 
and ICD-10-PCS procedure code 0DB60ZZ or 0DB80ZZ that currently group 
to MS-DRGs 981 through 983, as well as all cases in MS-DRGs 981 through 
983. Our findings are shown in the table below.

   MS-DRGs 981-983: All Cases and Cases With Principal Diagnosis of GIST and Procedure Code 0DB60ZZ or 0DB80ZZ
----------------------------------------------------------------------------------------------------------------
                                                                     Number of    Average length
                             MS-DRG                                    cases          of stay      Average costs
----------------------------------------------------------------------------------------------------------------
MS-DRG 981--All cases...........................................          29,192            11.3         $29,862
MS-DRG 981--Cases with procedure code 0DB60ZZ...................              46            12.4          35,723
MS-DRG 981--Cases with procedure code 0DB80ZZ...................              12            10.8          28,059
MS-DRG 982--All cases...........................................          16,834             6.3          16,939
MS-DRG 982--Cases with procedure code 0DB60ZZ...................             104             6.8          17,442
MS-DRG 982--Cases with procedure code 0DB80ZZ...................              41               8          18,961
MS-DRG 983--All cases...........................................           3,166             3.3          11,872
MS-DRG 983--Cases with procedure code 0DB60ZZ...................              97             4.5          11,901
MS-DRG 983--Cases with procedure code 0DB80ZZ...................              19             4.5           9,971
----------------------------------------------------------------------------------------------------------------

    Of the MDCs to which these gastrointestinal excision procedures are 
currently assigned, our clinical advisors indicated that cases with a 
principal diagnosis of GIST that also report an open gastrointestinal 
excision procedure code would logically be assigned to MDC 6 (Diseases 
and Disorders of the Digestive System). Within MDC 6, ICD-10-PCS 
procedures codes 0DB60ZZ and 0DB80ZZ are currently assigned to MS-DRGs 
326, 327, and 328 (Stomach, Esophageal and Duodenal Procedures with 
MCC, CC, and without CC/MCC, respectively). To understand how the 
resources associated with the subset of cases reporting a principal 
diagnosis of GIST and procedure code 0DB60ZZ or 0DB80ZZ compare to 
those of cases in MS-DRGs 326, 327, and 328 as a whole, we examined the 
average costs and average length of stay for all cases in MS-DRGs 326, 
327, and 328. Our findings are shown in the table below.

----------------------------------------------------------------------------------------------------------------
                                                                     Number of    Average length
                             MS-DRG                                    cases          of stay      Average costs
----------------------------------------------------------------------------------------------------------------
MS-DRG 326--All cases...........................................           9,898              13         $36,129
MS-DRG 327--All cases...........................................           9,602             6.6          18,736
MS-DRG 328--All cases...........................................           7,634             2.9          11,555
----------------------------------------------------------------------------------------------------------------

    Our clinical advisors reviewed these data and noted that the 
average length of stay and average costs of this subset of cases were 
similar to those of cases in MS-DRGs 326, 327, and 328 in MDC 6. To 
consider whether it was appropriate to move the GIST diagnosis codes 
from MDC 8, we examined the other procedure codes reported for cases 
that report a principal diagnosis of GIST and noted that almost all of 
the O.R. procedures most frequently reported were assigned to MDC 6 
rather than MDC 8. Our clinical advisors believe that, given the 
similarity in resource use between this subset of cases and cases in 
MS-DRGs 326, 327, and 328, and that the GIST diagnosis codes are 
gastrointestinal in nature, they would be more appropriately assigned 
to MS-DRGs 326, 327, and 328 in MDC 6 than their current assignment in 
MDC 8. Therefore, we are proposing to move the GIST diagnosis codes 
listed above from MDC 8 to MDC 6 within MS-DRGs 326, 327, and 328. 
Under our proposal, cases reporting a principal diagnosis of GIST would 
group to MS-DRGs 326, 327, and 328.
(2) Peritoneal Dialysis Catheter Complications
    During our review of the cases currently grouping to MS-DRGs 981-

[[Page 19218]]

983, we noted that cases reporting a principal diagnosis of 
complications of peritoneal dialysis catheters with procedure codes 
describing removal, revision, and/or insertion of new peritoneal 
dialysis catheters group to MS-DRGs 981 through 983. The ICD-10-CM 
diagnosis codes that describe complications of peritoneal dialysis 
catheters, listed in the table below, are assigned to MDC 21 (Injuries, 
Poisonings and Toxic Effects of Drugs). These principal diagnoses are 
frequently reported with the procedure codes describing removal, 
revision, and/or insertion of new peritoneal dialysis catheters.

------------------------------------------------------------------------
      ICD-10-CM code                      Code description
------------------------------------------------------------------------
T85.611A..................  Breakdown (mechanical) of intraperitoneal
                             dialysis catheter, initial encounter.
T85.621A..................  Displacement of intraperitoneal dialysis
                             catheter, initial encounter.
T85.631A..................  Leakage of intraperitoneal dialysis
                             catheter, initial encounter.
T85.691A..................  Other mechanical complication of
                             intraperitoneal dialysis catheter, initial
                             encounter.
T85.71XA..................  Infection and inflammatory reaction due to
                             peritoneal dialysis catheter, initial
                             encounter.
T85.898A..................  Other specified complication of other
                             internal prosthetic devices, implants and
                             graft, initial encounter.
------------------------------------------------------------------------

    The procedure codes in the table below describe removal, revision, 
and/or insertion of new peritoneal dialysis catheters or revision of 
synthetic substitutes and are currently assigned to MDC 6 (Diseases and 
Disorders of the Digestive System) in MS-DRGs 356, 357, and 358 (Other 
Digestive System O.R. Procedures with MCC, with CC, and without CC/MCC, 
respectively).

------------------------------------------------------------------------
ICD-10-PCS  procedure code                Code description
------------------------------------------------------------------------
0WHG03Z...................  Insertion of infusion device into peritoneal
                             cavity, open approach.
0WHG43Z...................  Insertion of infusion device into peritoneal
                             cavity, percutaneous endoscopic approach.
0WPG03Z...................  Removal of infusion device from peritoneal
                             cavity, open approach.
0WPG43Z...................  Removal of infusion device from peritoneal
                             cavity, percutaneous endoscopic approach.
0WWG03Z...................  Revision of infusion device in peritoneal
                             cavity, open approach.
0WWG0JZ...................  Revision of synthetic substitute in
                             peritoneal cavity, open approach.
0WWG43Z...................  Revision of infusion device in peritoneal
                             cavity, percutaneous endoscopic approach.
0WWG4JZ...................  Revision of synthetic substitute in
                             peritoneal cavity, percutaneous endoscopic
                             approach.
------------------------------------------------------------------------

    We examined the claims data from the September 2018 update of the 
FY 2018 MedPAR file for the average costs and length of stay for cases 
that report a principal diagnosis of complications of peritoneal 
dialysis catheters with a procedure describing removal, revision, and/
or insertion of new peritoneal dialysis catheters or revision of 
synthetic substitutes. Our findings are shown in the table below. We 
note that we did not find any such cases in MS-DRG 983.

  MS-DRG 981 Through 982: Peritoneal Dialysis Catheter Procedures With Principal Diagnosis of Complications of
                                          Peritoneal Dialysis Catheters
----------------------------------------------------------------------------------------------------------------
                                                                     Number of    Average length
                             MS-DRG                                    cases          of stay      Average costs
----------------------------------------------------------------------------------------------------------------
MS-DRG 981--Cases reporting peritoneal dialysis catheter                   1,603             8.5         $20,676
 procedures with a principal diagnosis of complications of
 peritoneal dialysis catheters..................................
MS-DRG 982--Cases reporting peritoneal dialysis catheter                       5             8.6          11,694
 procedures with a principal diagnosis of complications of
 peritoneal dialysis catheters..................................
----------------------------------------------------------------------------------------------------------------

    Our clinical advisors indicated that, within MDC 21, the procedures 
describing removal, revision, and/or insertion of new peritoneal 
dialysis catheters or revision of synthetic substitutes most suitably 
group to MS-DRGs 907, 908, and 909, which contain all procedures for 
injuries that are not specific to the hand, skin, and wound 
debridement. To determine how the resources for this subset of cases 
compared to cases in MS-DRGs 907, 908, and 909 as a whole, we examined 
the average costs and length of stay for cases in MS-DRGs 907, 908, and 
909. Our findings are shown in the table below.

----------------------------------------------------------------------------------------------------------------
                                                                     Number of    Average length
                             MS-DRG                                    cases          of stay      Average costs
----------------------------------------------------------------------------------------------------------------
MS-DRG 907--All cases...........................................           9,482             9.7         $27,492
MS-DRG 908--All cases...........................................           9,305             5.3          14,597
MS-DRG 909--All cases...........................................           3,011               3           9,587
----------------------------------------------------------------------------------------------------------------

    Our clinical advisors considered these data and noted that the 
average costs and length of stay for this subset of cases, most of 
which group to MS-DRG 981, are lower than the average costs and length 
of stay for cases of the same

[[Page 19219]]

severity level in MS-DRGs 907. However, our clinical advisors believe 
that the procedures describing removal, revision, and/or insertion of 
new peritoneal dialysis catheters or revision of synthetic substitutes 
are clearly related to the principal diagnosis codes describing 
complications of peritoneal dialysis catheters and, therefore, it is 
clinically appropriate for the procedures to group to the same MS-DRGs 
as the principal diagnoses. Therefore, we are proposing to add the 
eight procedure codes listed in the table above that describe removal, 
revision, and/or insertion of new peritoneal dialysis catheters or 
revision of synthetic substitutes to MDC 21 (Injuries, Poisonings & 
Toxic Effects of Drugs) in MS-DRGs 907, 908, and 909. Under this 
proposal, cases reporting a principal diagnosis of complications of 
peritoneal dialysis catheters with a procedure describing removal, 
revision, and/or insertion of new peritoneal dialysis catheters or 
revision of synthetic substitutes would group to MS-DRGs 907, 908, and 
909.
(3) Bone Excision With Pressure Ulcers
    During our review of the cases that group to MS-DRGs 981 through 
983, we noted that when procedures describing excision of the sacrum, 
pelvic bones, and coccyx (ICD-10-PCS procedure codes 0QB10ZZ (Excision 
of sacrum, open approach), 0QB20ZZ (Excision of right pelvic bone, open 
approach), 0QB30ZZ (Excision of left pelvic bone, open approach), and 
0QBS0ZZ (Excision of coccyx, open approach)) are reported with a 
principal diagnosis of pressure ulcers in MDC 9 (Diseases and Disorders 
of the Skin, Subcutaneous Tissue and Breast), the cases group to MS-
DRGs 981 through 983. The procedures describing excision of the sacrum, 
pelvic bones, and coccyx group to several MDCs, which are listed in the 
table below.

                 MS-DRG Assignments for ICD-10-PCS Codes 0QB10ZZ, 0QB20ZZ, 0QB30ZZ, and 0QBS0ZZ
----------------------------------------------------------------------------------------------------------------
             MDC                          MS-DRG                              MS-DRG description
----------------------------------------------------------------------------------------------------------------
3............................  133-134.....................  Other Ear, Nose, Mouth and Throat O.R. Procedures
                                                              with CC/MCC and without CC/MCC, respectively.
8............................  515-517.....................  Other Musculoskeletal System and Connective Tissue
                                                              O.R. Procedures with MCC, with CC, and without CC/
                                                              MCC, respectively.
10...........................  628-630.....................  Other Endocrine, Nutritional and Metabolic O.R.
                                                              Procedures with MCC, with CC, and without CC/MCC,
                                                              respectively.
21...........................  907-909.....................  Other O.R. Procedures for Injuries.
24...........................  957-959.....................  Other Procedures for Multiple Significant Trauma.
----------------------------------------------------------------------------------------------------------------

    When cases reporting procedure codes describing excision of the 
sacrum, pelvic bones, and coccyx report a principal diagnosis from MDC 
9, the ICD-10-CM diagnosis codes that are most frequently reported as 
principal diagnoses are listed below.

------------------------------------------------------------------------
 ICD-10-CM  diagnosis code                Code description
------------------------------------------------------------------------
L89.150...................  Pressure ulcer of sacral region,
                             unstageable.
L89.153...................  Pressure ulcer of sacral region, stage 3.
L89.154...................  Pressure ulcer of sacral region, stage 4.
L89.214...................  Pressure ulcer of right hip, stage 4.
L89.224...................  Pressure ulcer of left hip, stage 4.
L89.314...................  Pressure ulcer of right buttock, stage 4.
L89.324...................  Pressure ulcer of left buttock, stage 4.
L89.894...................  Pressure ulcer of other site, stage 4.
------------------------------------------------------------------------

    We examined the claims data from the September 2018 update of the 
FY 2018 MedPAR file for the average costs and length of stay for cases 
that report procedures describing excision of the sacrum, pelvic bones, 
and coccyx in conjunction with a principal diagnosis of pressure 
ulcers.

    MS-DRGs 981 Through 983: Cases Reporting Excision of the Sacrum, Pelvic Bones, and Coccyx Reported With a
                                     Principal Diagnosis of Pressure Ulcers
----------------------------------------------------------------------------------------------------------------
                                                                     Number of    Average length
                             MS-DRG                                    cases          of stay      Average costs
----------------------------------------------------------------------------------------------------------------
MS-DRG 981--Cases reporting excision of the sacrum, pelvic                   394            11.9         $24,398
 bones, and coccyx and a principal diagnosis of pressure ulcers.
MS-DRG 982--Cases Reporting excision of the sacrum, pelvic                   477             9.4          16,464
 bones, and coccyx and a principal diagnosis of pressure ulcers.
MS-DRG 983--Cases Reporting excision of the sacrum, pelvic                    38             4.8           8,519
 bones, and coccyx and a principal diagnosis of pressure ulcers.
----------------------------------------------------------------------------------------------------------------

    Our clinical advisors indicated that, given the nature of these 
procedures, they could not be appropriately assigned to the specific 
surgical MS-DRGs within MDC 9, which are: Skin graft; skin debridement; 
mastectomy for malignancy; and breast biopsy, local excision, and other 
breast procedures. Therefore, our clinical advisors believe that these 
procedures would most suitably group to MS-DRGs 579, 580, and 581 
(Other Skin, Subcutaneous Tissue and Breast Procedures with MCC, with 
CC, and without CC/MCC, respectively), which contain procedures

[[Page 19220]]

assigned to MDC 9 that do not fit within the specific surgical MS-DRGs 
in MDC 9. Therefore, we examined the claims data for the average length 
of stay and average costs for MS-DRGs 579, 580, and 581 in MDC 9. Our 
findings are shown in the table below.

 
----------------------------------------------------------------------------------------------------------------
                                                                     Number of    Average length
                             MS-DRG                                    cases          of stay      Average costs
----------------------------------------------------------------------------------------------------------------
MS-DRG 579......................................................           4,091             9.2         $19,873
MS-DRG 580......................................................          10,048             5.2          11,229
MS-DRG 581......................................................           4,364               3           8,987
----------------------------------------------------------------------------------------------------------------

    Our clinical advisors reviewed these data and noted that, in this 
subset of cases, most cases group to MS-DRGs 981 and 982 and have 
greater average length of stay and average costs than those cases of 
the same severity level in MS-DRGs 579 and 580. The smaller number of 
cases that group to MS-DRG 983 have lower average costs than cases in 
MS-DRG 581. However, our clinical advisors believe that the procedure 
codes describing excision of the sacrum, pelvic bones, and coccyx are 
clearly related to the principal diagnosis codes describing pressure 
ulcers, as these procedures would be performed to treat pressure ulcers 
in the sacrum, hip, and buttocks regions. Therefore, our clinical 
advisors believe that it is clinically appropriate for the procedures 
to group to the same MS-DRGs as the principal diagnoses. Therefore, we 
are proposing to add the ICD-10-PCS procedure codes describing excision 
of the sacrum, pelvic bones, and coccyx to MDC 9 in MS-DRGs 579, 580, 
and 581. Under this proposal, cases reporting a principal diagnosis in 
MDC 9 (such as pressure ulcers) with a procedure describing excision of 
the sacrum, pelvic bones, and coccyx would group to MS-DRGs 579, 580, 
and 581.
(4) Lower Extremity Muscle and Tendon Excision
    During the review of the cases that group to MS-DRGs 981 through 
983, we noted that when several ICD-10-PCS procedure codes describing 
excision of lower extremity muscles and tendons are reported in 
conjunction with ICD-10-CM diagnosis codes in MDC 10 (Endocrine, 
Nutritional and Metabolic Diseases and Disorders), the cases group to 
MS-DRGs 981 through 983. These ICD-10-PCS procedure codes are listed in 
the table below, and are assigned to several MS-DRGs, which are also 
listed below.

----------------------------------------------------------------------------------------------------------------
   ICD-10-PCS  procedure code                      Code description
-----------------------------------------------------------------------------------
0KBN0ZZ.........................  Excision of right hip muscle, open approach.
0KBP0ZZ.........................  Excision of left hip muscle, open approach.
0KBS0ZZ.........................  Excision of right lower leg muscle, open
                                   approach.
0KBT0ZZ.........................  Excision of left lower leg muscle, open approach.
0KBV0ZZ.........................  Excision of right foot muscle, open approach.
0KBW0ZZ.........................  Excision of left foot muscle, open approach.
0LBV0ZZ.........................  Excision of right foot tendon, open approach.
0LBW0ZZ.........................  Excision of left foot tendon, open approach.
----------------------------------------------------------------------------------------------------------------


----------------------------------------------------------------------------------------------------------------
             MDC                          MS-DRG                              MS-DRG description
----------------------------------------------------------------------------------------------------------------
01...........................  040-042.....................  Peripheral, Cranial Nerve and Other Nervous System
                                                              Procedures with MCC, with CC or Peripheral
                                                              Neurostimulator, and without CC/MCC, respectively.
08...........................  500-502.....................  Soft Tissue Procedures with MCC, with CC, and
                                                              without CC/MCC, respectively.
09...........................  579-581.....................  Other Skin, Subcutaneous Tissue and Breast
                                                              Procedures with MCC, with CC, and without CC/MCC,
                                                              respectively.
21...........................  907-909.....................  Other O.R. Procedures for Injuries.
24...........................  957-959.....................  Other Procedures for Multiple Significant Trauma.
----------------------------------------------------------------------------------------------------------------

    The ICD-10-CM diagnosis codes in MDC 10 that are most frequently 
reported as the principal diagnosis with a procedure describing 
excision of lower extremity muscles and tendons are listed in the table 
below. The combination indicates debridement procedures for more 
complex diabetic ulcers.

------------------------------------------------------------------------
 ICD-10-CM  procedure code                Code description
------------------------------------------------------------------------
E11.621...................  Type 2 diabetes mellitus with foot ulcer.
E11.69....................  Type 2 diabetes mellitus with other
                             specified complication.
E11.628...................  Type 2 diabetes mellitus with other skin
                             complications.
E11.622...................  Type 2 diabetes mellitus with other skin
                             ulcer.
E10.621...................  Type 1 diabetes mellitus with foot ulcer.
------------------------------------------------------------------------

    To understand the resource use for the subset of cases reporting 
procedure codes describing excision of lower extremity muscles and 
tendons that are currently grouping to MS-DRGs 981 through 983, we 
examined claims data

[[Page 19221]]

for the average length of stay and average costs for these cases. Our 
findings are shown in the table below.

  MS-DRGs 981-983: Cases Reporting Procedures Describing Excision of Lower Extremity Muscles and Tendons With a
                                          Principal Diagnosis in MDC 10
----------------------------------------------------------------------------------------------------------------
                                                                     Number of    Average length
                             MS-DRG                                    cases          of stay      Average costs
----------------------------------------------------------------------------------------------------------------
MS-DRG 981--Cases reporting excision of lower extremity muscles              125             9.1         $19,031
 and tendons and a principal diagnosis in MDC 10................
MS-DRG 982--Cases reporting excision of lower extremity muscles              561             6.2          12,000
 and tendons and a principal diagnosis in MDC 10................
MS-DRG 983--Cases reporting excision of lower extremity muscles               16             4.8           9,003
 and tendons and a principal diagnosis in MDC 10................
----------------------------------------------------------------------------------------------------------------

    Our clinical advisors examined cases reporting procedures 
describing excision of lower extremity muscles and tendons with a 
principal diagnosis in the MS-DRGs within MDC 10 and determined that 
these cases would most suitably group to MS-DRGs 622, 623, and 624 
(Skin Grafts and Wound Debridement for Endocrine, Nutritional and 
Metabolic Disorders with MCC, with CC, and without CC/MCC, 
respectively). Therefore, we examined the average length of stay and 
average costs for cases assigned to MS-DRGs 622, 623, and 624. Our 
findings are shown in the table below.

----------------------------------------------------------------------------------------------------------------
                                                                     Number of    Average length
                             MS-DRG                                    cases          of stay      Average costs
----------------------------------------------------------------------------------------------------------------
MS-DRG 622......................................................           1,540            11.7         $25,114
MS-DRG 623......................................................           4,849             6.6          13,490
MS-DRG 624......................................................             232             3.7           7,442
----------------------------------------------------------------------------------------------------------------

    Our clinical advisors reviewed these data and noted that most of 
the cases reporting procedures describing excision of lower extremity 
muscles and tendons group to MS-DRGs 981 and 982. For these cases, the 
average length of stay and average costs are lower than those of cases 
that currently group to MS-DRGs 622 and 623. However, our clinical 
advisors believe that these procedures are clearly related to the 
principal diagnoses in MDC 10, as they would be performed to treat 
skin-related complications of diabetes and, therefore, it is clinically 
appropriate for the procedures to group to the same MS-DRGs as the 
principal diagnoses. Therefore, we are proposing to add the procedure 
codes listed previously describing excision of lower extremity muscles 
and tendons to MDC 10. Under our proposal, cases reporting these 
procedure codes with a principal diagnosis in MDC 10 would group to MS-
DRGs 622, 623, and 624.
(5) Kidney Transplantation Procedures
    During our review of the cases that group to MS-DRGs 981 through 
983, we noted that when procedures describing transplantation of 
kidneys (ICD-10-PCS procedure codes 0TY00Z0 (Transplantation of right 
kidney, allogeneic, open approach) and 0TY10Z0 (Transplantation of left 
kidney, allogeneic, open approach)) are reported in conjunction with 
ICD-10-CM diagnosis codes in MDC 5 (Diseases and Disorders of the 
Circulatory System), the cases group to MS-DRGs 981 through 983. The 
ICD-10-CM diagnosis codes in MDC 5 that are reported with the kidney 
transplantation codes are I13.0 (Hypertensive heart and chronic kidney 
disease with heart failure and with stage 1 through stage 4 chronic 
kidney disease) and I13.2 (Hypertensive heart and chronic kidney 
disease with heart failure and with stage 5 chronic kidney disease), 
which group to MDC 5. Procedure codes describing transplantation of 
kidneys are assigned to MS-DRG 652 (Kidney Transplant) in MDC 11. We 
examined claims data to identify the average length of stay and average 
costs for cases reporting procedure codes describing transplantation of 
kidneys with a principal diagnosis in MDC 5, which are currently 
grouping to MS-DRGs 981 through 983. Our findings are shown in the 
table below. We did not find any such cases in MS-DRG 983.

    MS-DRGs 981 Through 983: Cases Reporting Procedures Describing Transplantation of Kidney With a Principal
                                               Diagnosis in MDC 5
----------------------------------------------------------------------------------------------------------------
                                                                     Number of    Average length
                             MS-DRG                                    cases          of stay      Average costs
----------------------------------------------------------------------------------------------------------------
MS-DRG 981--Cases reporting transplantation of kidney and a                  285             6.8         $25,340
 principal diagnosis in MDC 5...................................
MS-DRG 982--Cases reporting transplantation of kidney and a                    2             3.5          21,678
 principal diagnosis in MDC 5...................................
----------------------------------------------------------------------------------------------------------------

    Our clinical advisors examined the MS-DRGs within MDC 5 and 
indicated that, given the nature of the procedures compared to the 
specific surgical procedures contained in the other surgical MS-DRGs in 
MDC 5, they could not be appropriately assigned to any of the specific 
surgical MS-DRGs. Therefore, they determined that these cases would 
most suitably group to MS-DRG 264 (Other Circulatory System O.R. 
Procedures), which contains a broader range of procedures related to 
MDC 5 diagnoses. We examined claims data to determine the average 
length of stay and

[[Page 19222]]

average costs for cases assigned to MS-DRG 264. We found a total of 
10,073 cases, with an average length of stay of 9.3 days and average 
costs of $22,643.
    Our clinical advisors reviewed these data and noted that the 
average costs for cases reporting transplantation of kidney with a 
diagnosis from MDC 5 are similar to the average costs of cases in MS-
DRG 264 ($22,643 in MS-DRG 264 compared to $25,340 in MS-DRG 981), 
while the average length of stay is shorter than that of cases in MS-
DRG 264 (9.3 days in MS-DRG 264 compared to 6.8 days in MS-DRG 981). 
Our clinical advisors noted that ICD-10-CM diagnosis codes describing 
hypertensive heart and chronic kidney disease without heart failure 
(I13.10 (Hypertensive heart and chronic kidney disease without heart 
failure, with stage 1 through stage 4 chronic kidney disease, or 
unspecified chronic kidney disease) and I13.11 (Hypertensive heart and 
chronic kidney disease without heart failure, with stage 5 chronic 
kidney disease, or end stage renal disease group) group to MS-DRG 652 
(Kidney Transplant) in MDC 11 (Diseases and Disorders of the Kidney and 
Urinary Tract). Our clinical advisors also noted that the counterpart 
codes describing hypertensive heart and chronic kidney disease with 
heart failure are as related to the kidney transplantation codes as the 
codes without heart failure, but because the codes with heart failure 
group to MDC 5, cases reporting a kidney transplant procedure with a 
diagnosis code of hypertensive heart and chronic kidney disease with 
heart failure currently group to MS-DRGs 981 through 983. Therefore, we 
are proposing to add ICD-10-PCS procedure codes 0TY00Z0 and 0TY10Z0 to 
MS-DRG 264 in MDC 5. Under this proposal, cases reporting a principal 
diagnosis in MDC 5 with a procedure describing kidney transplantation 
would group to MS-DRG 264 in MDC 5. We note that because MDC 5 covers 
the circulatory system, and kidney transplants generally group to MDC 
11, we are seeking public comments on whether the procedure codes 
should instead continue to group to MS-DRGs 981 through 983.
(6) Insertion of Feeding Device
    During our review of the cases that group to MS-DRGs 981 through 
983, we noted that when ICD-10-PCS procedure code 0DH60UZ (Insertion of 
feeding device into stomach, open approach) is reported with ICD-10-CM 
diagnosis codes assigned to MDC 1 (Diseases and Disorders of the 
Nervous System) or MDC 10 (Endocrine, Nutritional and Metabolic 
Diseases and Disorders), the cases group to MS-DRGs 981 through 983. 
ICD-10-PCS procedure code 0DH60UZ is currently assigned to MDC 6 
(Diseases and Disorders of the Digestive System) in MS-DRGs 326, 327, 
and 328 (Stomach, Esophageal and Duodenal Procedures) and MDC 21 
(Injuries, Poisonings and Toxic Effects of Drugs) in MS-DRGs 907, 908, 
and 909 (Other O.R. Procedures for Injuries). We also noticed that: (1) 
When ICD-10-PCS procedure code 0DH60UZ is reported with a principal 
diagnosis in MDC 1, the ICD-10-CM diagnosis codes reported with this 
procedure code describe cerebral infarctions of various etiology and 
anatomic locations and resulting complications; and (2) when ICD-10-PCS 
procedure code 0DH60UZ is reported with a principal diagnosis in MDC 
10, the ICD-10-CM diagnosis codes reported with this procedure code 
pertain to dehydration, failure to thrive, and various forms of 
malnutrition.
    We examined claims data to identify the average length of stay and 
average costs for cases in MS-DRGs 981 through 983 reporting ICD-10-PCS 
procedure code 0DH60UZ in conjunction with a principal diagnosis from 
MDC 1 or MDC 10. Our findings are shown in the table below.

  MS-DRGs 981 Through 983: Cases Reporting Procedure Code 0DH60UZ With a Principal Diagnosis in MDC 1 or MDC 10
----------------------------------------------------------------------------------------------------------------
                                                                     Number of    Average length
                             MS-DRG                                    cases          of stay      Average costs
----------------------------------------------------------------------------------------------------------------
MS-DRG 981--Cases reporting procedure code 0DH60UZ and a                     115            19.3         $40,598
 principal diagnosis in MDC 1...................................
MS-DRG 982--Cases reporting procedure code 0DH60UZ and a                      43            13.2          25,042
 principal diagnosis in MDC 1...................................
MS-DRG 983--Cases reporting procedure code 0DH60UZ and a                       4            14.3          26,954
 principal diagnosis in MDC 1...................................
MS-DRG 981--Cases reporting procedure code 0DH60UZ and a                      47            13.4          24,690
 principal diagnosis in MDC 10..................................
MS-DRG 982--Cases reporting procedure code 0DH60UZ and a                      20             7.2          12,792
 principal diagnosis in MDC 10..................................
MS-DRG 983--Cases reporting procedure code 0DH60UZ and a                       5             5.0           8,608
 principal diagnosis in MDC 10..................................
----------------------------------------------------------------------------------------------------------------

    Our clinical advisors determined that the feeding tube procedure 
was related to specific diagnoses within MDC 1 and MDC 10 and, 
therefore, could be assigned to both MDCs. Therefore, they reviewed the 
MS-DRGs within MDC 1 and MDC 10. They determined that the most suitable 
MS-DRG assignment within MDC 1 would be MS-DRGs 040, 041, and 042 
(Peripheral, Cranial Nerve and Other Nervous System Procedures with 
MCC, with CC or Peripheral Neurostimulator, and without CC/MCC, 
respectively), which contain procedures assigned to MDC 1 that describe 
insertion of devices into anatomical areas that are not part of the 
nervous system. Our clinical advisors determined that the most suitable 
MS-DRG assignment within MDC 10 would be MS-DRGs 628, 629, and 630 
(Other Endocrine, Nutritional and Metabolic O.R. Procedures with MCC, 
with CC, and without CC/MCC, respectively), which contain the most 
clinically similar procedures assigned to MDC 10, such as those 
describing insertion of infusion pump into subcutaneous tissue and 
fascia. Therefore, we examined claims data to identify the average 
length of stay and average costs for cases assigned to MDC 1 in MS-DRGs 
040, 041, and 042 and MDC 10 in MS-DRGs 628, 629, and 630. Our findings 
are shown in the tables below.

[[Page 19223]]



----------------------------------------------------------------------------------------------------------------
                                                                     Number of    Average length
                        MS-DRGs in MDC 1                               cases          of stay      Average costs
----------------------------------------------------------------------------------------------------------------
MS-DRG 040......................................................           4,211            10.2         $27,096
MS-DRG 041......................................................           6,153             5.1          16,917
MS-DRG 042......................................................           2,249             3.0          13,365
----------------------------------------------------------------------------------------------------------------


----------------------------------------------------------------------------------------------------------------
                                                                     Number of    Average length
                        MS-DRGs in MDC 10                              cases          of stay      Average costs
----------------------------------------------------------------------------------------------------------------
MS-DRG 628......................................................           3,004             9.9         $25,472
MS-DRG 629......................................................           5,435             7.2          16,391
MS-DRG 630......................................................             237             3.2          10,659
----------------------------------------------------------------------------------------------------------------

    Our clinical advisors reviewed these data and noted that the 
average length of stay and average costs for the subset of cases 
reporting ICD-10-PCS procedure code 0DH60UZ with a principal diagnosis 
assigned to MDC 1 are higher than those cases in MS-DRGs 040, 041, and 
042. For example, the cases reporting ICD-10-PCS procedure code 0DH60UZ 
and a principal diagnosis in MDC 1 that currently group to MS-DRG 981 
have an average length of stay of 19.3 days and average costs of 
$40,598, while the cases in MS-DRG 040 have an average length of stay 
of 10.2 days and average costs of $27,096. Our clinical advisors noted 
that the average length of stay and average costs for the subset of 
cases reporting ICD-10-PCS procedure code 0DH60UZ with a principal 
diagnosis assigned to MDC 10 are more closely aligned with those cases 
in MS-DRGs 628, 629, and 630. In both cases, our clinical advisors 
believe that the insertion of feeding device is clearly related to the 
principal diagnoses in MDC 1 and MDC 10 and, therefore, it is 
clinically appropriate for the procedures to group to the same MS-DRGs 
as the principal diagnoses. Therefore, we are proposing to add ICD-10-
PCS procedure code 0DH60UZ to MDC 1 and MDC 10. Under this proposal, 
cases reporting procedure code 0DH60UZ with a principal diagnosis in 
MDC 1 would group to MS-DRGs 040, 041, and 042, while cases reporting 
ICD-10-PCS procedure code 0DH60UZ with a principal diagnosis in MDC 10 
would group to MS-DRGs 628, 629, and 630.
(7) Basilic Vein Reposition in Chronic Kidney Disease
    During our review of the cases that group to MS-DRGs 981 through 
983, we noted that when procedures codes describing reposition of 
basilic vein (ICD-10-PCS procedure codes 05SB0ZZ (Reposition right 
basilic vein, open approach), 05SB3ZZ (Reposition right basilic vein, 
percutaneous approach), 05SC0ZZ (Reposition left basilic vein, open 
approach), and 05SC3ZZ (Reposition left basilic vein, percutaneous 
approach)) are reported with a principal diagnosis in MDC 11 (Diseases 
and Disorders of the Kidney and Urinary Tract) (typically describing 
chronic kidney disease), the cases group to MS-DRGs 981 through 983. 
This code combination suggests a revision of an arterio-venous fistula 
in a patient on chronic hemodialysis. We examined claims data to 
identify the average length of stay and average costs for cases 
reporting procedures describing reposition of basilic vein with a 
principal diagnosis in MDC 11, which are currently grouping to MS-DRGs 
981 through 983. Our findings are shown in the table below.

  MS-DRGs 981-983: Cases Reporting Procedures Describing Reposition of Basilic Vein With Principal Diagnosis in
                                                     MDC 11
----------------------------------------------------------------------------------------------------------------
                                                                     Number of    Average length
                             MS-DRG                                    cases          of stay      Average costs
----------------------------------------------------------------------------------------------------------------
MS-DRG 981--Cases reporting procedures describing reposition of               48             4.6         $12,232
 basilic vein and a principal diagnosis in MDC 11...............
MS-DRG 982--Cases reporting procedures describing reposition of               10             6.9          18,481
 basilic vein and a principal diagnosis in MDC 11...............
MS-DRG 983--Cases reporting procedures describing reposition of                1             3.0           3,552
 basilic vein and a principal diagnosis in MDC 11...............
----------------------------------------------------------------------------------------------------------------

    Our clinical advisors examined claims data for cases in the MS-DRGs 
within MDC 11 and determined that cases reporting procedures describing 
reposition of basilic vein with a principal diagnosis in MDC 11 would 
most suitably group to MS-DRGs 673, 674, and 675 (Other Kidney and 
Urinary Tract Procedures with MCC, with CC, and without CC/MCC, 
respectively), to which MDC 11 procedures describing reposition of 
veins (other than renal veins) are assigned. Therefore, we examined 
claims data to identify the average length of stay and average costs 
for cases assigned to MS-DRGs 673, 674, and 675. Our findings are shown 
in the table below.

----------------------------------------------------------------------------------------------------------------
                                                                     Number of    Average length
                             MS-DRG                                    cases          of stay      Average costs
----------------------------------------------------------------------------------------------------------------
MS-DRG 673......................................................          10,542            10.8         $25,842
MS-DRG 674......................................................           6,167             7.4          17,685
MS-DRG 675......................................................             437             3.9          11,858
----------------------------------------------------------------------------------------------------------------


[[Page 19224]]

    Our clinical advisors reviewed these data and noted that the 
average length of stay and average costs for cases reporting procedures 
describing reposition of basilic vein with a principal diagnosis in MDC 
11 with an MCC are significantly lower than for those cases in MS-DRG 
673. The average length of stay and average costs are similar for those 
cases with a CC, while the single case without a CC or MCC had 
significantly lower costs than the average costs of cases in MS-DRG 
675. However, our clinical advisors believe that when the procedures 
describing reposition of basilic vein are reported with a principal 
diagnosis describing chronic kidney disease, the procedure is likely 
related to arteriovenous fistulas for dialysis associated with the 
chronic kidney disease. Therefore, our clinical advisors believe that 
it is clinically appropriate for the procedures to group to the same 
MS-DRGs as the principal diagnoses. Therefore, we are proposing to add 
ICD-10-PCS procedures codes 05SB0ZZ, 05SB3ZZ, 05SC0ZZ, and 05SC3ZZ to 
MDC 11. Under our proposal, cases reporting procedure codes describing 
reposition of basilic vein with a principal diagnosis in MDC 11 would 
group to MS-DRGs 673, 674, and 675.
(8) Colon Resection With Fistula
    During our review of the cases that group to MS-DRGs 981 through 
983, we noted that when ICD-10-PCS procedure code 0DTN0ZZ (Resection of 
sigmoid colon, open approach) is reported with a principal diagnosis in 
MDC 11 (Diseases and Disorders of the Kidney and Urinary Tract), the 
cases group to MS-DRGs 981 through 983. The principal diagnosis most 
frequently reported with ICD-10-PCS procedure code 0DTN0ZZ in MDC 11 is 
ICD-10-CM code N321 (Vesicointestinal fistula). ICD-10-PCS procedure 
code 0DTN0ZZ currently groups to several MDCs, which are listed in the 
table below.

        MS-DRG Assignments for ICD-10-PCS Procedure Code 0DTN0ZZ
------------------------------------------------------------------------
          MDC                   MS-DRG             MS-DRG description
------------------------------------------------------------------------
6.....................  329-331...............  Major Small and Large
                                                 Bowel Procedures.
17....................  820-822...............  Lymphoma and Leukemia
                                                 with Major Procedure.
17....................  826-828...............  Myeloproliferative
                                                 Disorders or Poorly
                                                 Differentiated
                                                 Neoplasms with Major
                                                 Procedure.
21....................  907-909...............  Other O.R. Procedures
                                                 for Injuries.
24....................  957-959...............  Other Procedures for
                                                 Multiple Significant
                                                 Trauma.
------------------------------------------------------------------------

    We examined claims data to identify the average length of stay and 
average costs for cases reporting procedure code 0DTN0ZZ with a 
principal diagnosis in MDC 11, which are currently grouping to MS-DRGs 
981 through 983. Our findings are shown in the table below.

----------------------------------------------------------------------------------------------------------------
                                                                     Number of    Average length
                             MS-DRG                                    cases          of stay      Average costs
----------------------------------------------------------------------------------------------------------------
MS-DRG 981--Cases reporting procedure code 0DTN0ZZ and a                      27           15.81         $44,743
 principal diagnosis in MDC 11..................................
MS-DRG 982--Cases reporting procedure code 0DTN0ZZ and a                      33            8.48          20,105
 principal diagnosis in MDC 11..................................
MS-DRG 983--Cases reporting procedure code 0DTN0ZZ and a                       5            3.60          12,351
 principal diagnosis in MDC 11..................................
----------------------------------------------------------------------------------------------------------------

    Our clinical advisors examined the MS-DRGs within MDC 11 and 
determined that the cases reporting procedure code 0DTN0ZZ with a 
principal diagnosis in MDC 11 would most suitably group to MS-DRGs 673, 
674, and 675, which contain procedures performed on structures other 
than kidney and urinary tract anatomy. We note that the claims data 
describing the average length of stay and average costs for cases in 
these MS-DRGs are included in a table earlier in this section. Because 
vesicointestinal fistulas involve both the bladder and the bowel, some 
procedures in both MDC 6 (Diseases and Disorders of the Digestive 
System) and MDC 11 (Diseases and Disorders of the Kidney and Urinary 
Tract) would be expected to be related to a principal diagnosis of 
vesicointestinal fistula (ICD-10-CM code N321). Our clinical advisors 
observed that procedure code 0DTN0ZZ is the second most common 
procedure reported in conjunction with a principal diagnosis of code 
N321, after ICD-10-PCS procedure code 0TQB0ZZ (Repair bladder, open 
approach), which is assigned to both MDC 6 and MDC 11. Our clinical 
advisors reviewed the data and noted that the average length of stay 
and average costs for this subset of cases are generally higher for 
this subset of cases than for cases in MS-DRGs 673, 674, and 675. 
However, our clinical advisors believe that when ICD-10-PCS procedure 
code 0DTN0ZZ is reported with a principal diagnosis in MDC 11 
(typically vesicointestinal fistula), the procedure is related to the 
principal diagnosis. Therefore, we are proposing to add ICD-10-PCS 
procedure code 0DTN0ZZ to MDC 11. Under our proposal, cases reporting 
procedure code 0DTN0ZZ with a principal diagnosis of vesicointestinal 
fistula (diagnosis code N321) in MDC 11 would group to MS-DRGs 673, 
674, and 675.
b. Reassignment of Procedures Among MS-DRGs 981 Through 983 and 987 
Through 989
    We also review the list of ICD-10-PCS procedures that, when in 
combination with their principal diagnosis code, result in assignment 
to MS-DRGs 981 through 983, or 987 through 989, to ascertain whether 
any of those procedures should be reassigned from one of those two 
groups of MS-DRGs to the other group of MS-DRGs based on average costs 
and the length of stay. We look at the data for trends such as shifts 
in treatment practice or reporting practice that would make the 
resulting MS-DRG assignment illogical. If we find these shifts, we 
would propose to move cases to keep the MS-DRGs clinically similar or 
to provide payment for the cases in a similar manner. Generally, we 
move only those procedures for which we have an adequate number of 
discharges to analyze the data.

[[Page 19225]]

    Based on the results of our review of claims data in the September 
2018 update of the FY 2018 MedPAR file, we are not proposing to change 
the current structure of MS-DRGs 981 through 983 and MS-DRGs 987 
through 989.
c. Proposed Additions for Diagnosis and Procedure Codes to MDCs
    Below we summarize the requests we received to examine cases found 
to group to MS-DRGs 981 through 983 or MS-DRGs 987 through 989 to 
determine if it would be appropriate to add procedure codes to one of 
the surgical MS DRGs for the MDC into which the principal diagnosis 
falls or to move the principal diagnosis to the surgical MS-DRGs to 
which the procedure codes are assigned.
(1) Stage 3 Pressure Ulcers of the Hip
    We received a request to reassign cases for a stage 3 pressure 
ulcer of the left hip when reported with procedures involving excision 
of pelvic bone or transfer of hip muscle from MS-DRGs 981, 982, and 983 
(Extensive O.R. Procedure Unrelated to Principal Diagnosis with MCC, 
with CC, and without CC/MCC, respectively) to MS-DRG 579 (Other Skin, 
Subcutaneous Tissue and Breast Procedures with MCC) in MDC 9. ICD-10-CM 
diagnosis code L89.223 (Pressure ulcer left hip, stage 3) is used to 
report this condition and is currently assigned to MDC 9 (Diseases and 
Disorders of the Skin, Subcutaneous Tissue and Breast). We refer 
readers to section II.12.a. of the preamble of this proposed rule, 
where we address ICD-10-PCS procedure code 0QB30ZZ (Excision of left 
pelvic bone, open approach), which was reviewed as part of our ongoing 
analysis of the unrelated MS-DRGs and which we are proposing to add to 
MS-DRGs 579, 580, and 581 in MDC 5. (While the requestor only referred 
to base MS-DRG 579, we believe it is appropriate to assign the cases to 
MS-DRGs 579, 580, and 581 by severity level.) ICD-10-PCS procedure 
codes 0KXP0ZZ (Transfer left hip muscle, open approach) and 0KXN0ZZ 
(Transfer right hip muscle, open approach) may be reported to describe 
transfer of hip muscle procedures and are currently assigned to MDC 1 
(Diseases and Disorders of the Nervous System) and MDC 8 (Diseases and 
Disorders of the Musculoskeletal System and Connective Tissue). We 
included ICD-10-PCS procedure code 0KXN0ZZ in our analysis because it 
describes the identical procedure on the right side.
    Our analysis of this grouping issue confirmed that, when a stage 3 
pressure ulcer of the left hip (ICD-10-CM diagnosis code L89.223) is 
reported as a principal diagnosis with ICD-10-PCS procedure code 
0KXP0ZZ or 0KXN0ZZ, these cases group to MS-DRGs 981, 982, and 983. The 
reason for this grouping is because whenever there is a surgical 
procedure reported on a claim that is unrelated to the MDC to which the 
case was assigned based on the principal diagnosis, it results in an 
MS-DRG assignment to a surgical class referred to as ``unrelated 
operating room procedures.'' In the example provided, because ICD-10-CM 
diagnosis code L89.223 describing a stage 3 pressure ulcer of left hip 
is classified to MDC 9 and because ICD-10-PCS procedure codes 0KXP0ZZ 
and 0KXN0ZZ are classified to MDC 1 (Diseases and Disorders of the 
Nervous System) in MS-DRGs 040, 041, and 042 (Peripheral, Cranial Nerve 
and Other Nervous System Procedures with MCC, with CC or Peripheral 
Neurostimulator, and without CC/MCC, respectively) and MDC 8 (Diseases 
and Disorders of the Musculoskeletal System and Connective Tissue) in 
MS-DRGs 500, 501, and 502 (Soft Tissue Procedures with MCC, with CC, 
and without CC/MCC, respectively), the GROUPER logic assigns this case 
to the ``unrelated operating room procedures'' set of MS-DRGs.
    For our review of this grouping issue and the request to have 
procedure code 0KXP0ZZ added to MDC 9, we examined claims data for 
cases reporting procedure code 0KXP0ZZ or 0KXN0ZZ in conjunction with a 
diagnosis code that typically groups to MDC 9. Our findings are shown 
in the table below.

            MS-DRGs 981 Through 983: Cases With Hip Muscle Transfer and Principal Diagnosis in MDC 9
----------------------------------------------------------------------------------------------------------------
                                                                     Number of    Average length
                             MS-DRG                                    cases          of stay      Average costs
----------------------------------------------------------------------------------------------------------------
MS-DRG 981--Cases with procedure code 0KXP0ZZ or 0KXN0ZZ and                  72            12.6         $25,023
 principal diagnosis in MDC 9...................................
MS-DRG 982--Cases with procedure code 0KXP0ZZ or 0KXN0ZZ and                 130            10.5          17,955
 principal diagnosis in MDC 9...................................
MS-DRG 983--Cases with procedure code 0KXP0ZZ or 0KXN0ZZ and                  16             6.5          13,196
 principal diagnosis in MDC 9...................................
----------------------------------------------------------------------------------------------------------------

    As indicated earlier, the requestor suggested that we move ICD-10-
PCS procedure code 0KXP0ZZ to MS-DRG 579. However, our clinical 
advisors believe that, within MDC 9, these procedure codes are more 
clinically aligned with the procedure codes assigned to MS-DRGs 573, 
574, and 575 (Skin Graft for Skin Ulcer or Cellulitis with MCC, with CC 
and without CC/MCC, respectively), which are more specific to the care 
of stage 3, 4 and unstageable pressure ulcers than MS-DRGs 579, 580, 
and 581. Therefore, we examined claims data to identify the average 
length of stay and average costs for cases assigned to MS-DRGs 573, 
574, and 575. Our findings are shown in the table below.

----------------------------------------------------------------------------------------------------------------
                                                                     Number of    Average length
                             MS-DRG                                    cases          of stay      Average costs
----------------------------------------------------------------------------------------------------------------
MS-DRG 573......................................................             548            15.4         $34,549
MS-DRG 574......................................................           1,254             9.8          21,251
MS-DRG 575......................................................             238             5.4          12,006
----------------------------------------------------------------------------------------------------------------

    We note that the average costs for cases in MS-DRGs 573 and 574 are 
higher than the average costs of the subset of cases with the same 
severity reporting a hip muscle transfer and a principal diagnosis in 
MDC 9, while the average costs of those cases in MS-DRG 575 are similar 
to the average costs of those cases that are currently grouping

[[Page 19226]]

to MS-DRG 983. However, our clinical advisors believe that the cases of 
hip muscle transfer represent a distinct, recognizable clinical group 
similar to those cases in MS-DRGs 573, 574, and 575, and that the 
procedures are clearly related to the principal diagnosis codes. 
Therefore, they believe that it is clinically appropriate for the 
procedures to group to the same MS-DRGs as the principal diagnoses. 
Therefore, we are proposing to add ICD-10-PCS procedure codes 0KXP0ZZ 
and 0KXN0ZZ to MDC 9. Under our proposal, cases reporting ICD-10-PCS 
procedure code 0KXP0ZZ or 0KXN0ZZ with a principal diagnosis in MDC 9 
would group to MS-DRGs 573, 574, and 575.
(2) Gastrointestinal Stromal Tumor
    We received a request to reassign cases for gastrointestinal 
stromal tumor of the stomach when reported with a procedure describing 
laparoscopic bypass of the stomach to jejunum from MS-DRGs 981, 982, 
and 983 to MS-DRGs 326, 327, and 328 (Stomach, Esophageal and Duodenal 
Procedures with MCC, with CC, and without CC/MCC, respectively) by 
adding ICD-10-PCS procedure code 0D164ZA (Bypass stomach to jejunum, 
percutaneous endoscopic approach) to MDC 6. ICD-10-CM diagnosis code 
C49.A2 (Gastrointestinal stromal tumor of stomach) is used to report 
this condition and is currently assigned to MDC 8. ICD-10-PCS procedure 
code 0D164ZA is used to report the stomach bypass procedure and is 
currently assigned to MDC 5 (Diseases and Disorders of the Circulatory 
System), MDC 6 (Diseases and Disorders of the Digestive System), MDC 7 
(Diseases and Disorders of the Hepatobiliary System and Pancreas), MDC 
10 (Endocrine, Nutritional and Metabolic Diseases and Disorders), and 
MDC 17 (Myeloproliferative Diseases and Disorders, Poorly 
Differentiated Neoplasms). We refer readers to section II.12.a. of the 
preamble of this proposed rule where we discuss our proposal to move 
the listed diagnosis codes describing gastrointestinal stromal tumors, 
including ICD-10-CM diagnosis code C49.A2, into MDC 6. Therefore, this 
proposal, if finalized, would address the cases grouping to MS-DRGs 981 
through 983 by instead moving the diagnosis codes to MDC 6, which would 
result in the diagnosis code and the procedure code referenced by the 
requestor grouping to the same MDC.
(3) Finger Cellulitis
    We received a request to reassign cases for cellulitis of the right 
finger when reported with a procedure describing open excision of the 
right finger phalanx from MS-DRGs 981, 982, and 983 to MS-DRGs 579, 
580, and 581 (Other Skin, Subcutaneous Tissue and Breast Procedures 
with MCC, with CC, and without CC/MCC, respectively). Currently, ICD-
10-CM diagnosis code L03.011 (Cellulitis of right finger) is used to 
report this condition and is currently assigned to MDC 09 in MS-DRGs 
573, 574, and 575 (Skin Graft for Skin Ulcer or Cellulitis with MCC, 
CC, and without CC/MCC, respectively), 576, 577, and 578 (Skin Graft 
except for Skin Ulcer or Cellulitis with MCC, CC, and without CC/MCC, 
respectively), and 602 and 603 (Cellulitis with MCC and without MCC, 
respectively). ICD-10-PCS procedure code 0PBT0ZZ (Excision of right 
finger phalanx, open approach) is used to identify the excision 
procedure, and is currently assigned to MDC 03 (Diseases and Disorders 
of the Ear, Nose, Mouth and Throat) in MS-DRGs 133 and 134 (Other Ear, 
Nose, Mouth and Throat O.R. Procedures with CC/MCC, and without CC/MCC, 
respectively); MDC 08 (Diseases and Disorders of the Musculoskeletal 
System and Connective Tissue) in MS-DRGs 515, 516, and 517 (Other 
Musculoskeletal System and Connective Tissue O.R. Procedures with MCC, 
with CC, and without CC/MCC, respectively); MDC 10 (Endocrine, 
Nutritional and Metabolic Diseases and Disorders) in MS-DRGs 628, 629, 
and 630 (Other Endocrine, Nutritional and Metabolic O.R. Procedures 
with MCC, with CC, and without CC/MCC, respectively); MDC 21 (Injuries, 
Poisonings and Toxic Effects of Drugs) in MS-DRGs 907, 908, and 909 
(Other O.R. Procedures for Injuries with MCC, with CC, and without CC/
MCC, respectively); and MDC 24 (Multiple Significant Trauma) in MS-DRGs 
957, 958, and 959 (Other O.R. Procedures for Multiple Significant 
Trauma with MCC, with CC, and without CC/MCC, respectively).
    Our analysis of this grouping issue confirmed that when a procedure 
such as open excision of right finger phalanx (ICD-10-PCS procedure 
code 0PBT0ZZ) is reported with a principal diagnosis from MDC 9, such 
as cellulitis of the right finger (ICD-10-CM diagnosis code L03.011), 
these cases group to MS-DRGs 981, 982, and 983. During our review of 
this issue, we also examined claims data for similar procedures 
describing excision of phalanges (which are listed in the table below) 
and noted the same pattern. We further noted that the ICD-10-PCS 
procedure codes describing excision of phalanx procedures with the 
diagnostic qualifier ``X'', which are used to report these procedures 
when performed for diagnostic purposes, are already assigned to MS-DRGs 
579, 580, and 581 (to which the requestor suggested these cases group). 
Our clinical advisors also believe that procedures describing resection 
of phalanges should be assigned to the same MS-DRG as the excisions, 
because the resection procedures would also group to MS-DRGs 981, 982, 
and 983 when reported with a principal diagnosis from MDC 9.

------------------------------------------------------------------------
  ICD-10-PCS  procedure code                Code description
------------------------------------------------------------------------
0PBR0ZZ......................  Excision of right thumb phalanx, open
                                approach.
0PBR3ZZ......................  Excision of right thumb phalanx,
                                percutaneous approach.
0PBR4ZZ......................  Excision of right thumb phalanx,
                                percutaneous endoscopic approach.
0PBS0ZZ......................  Excision of left thumb phalanx, open
                                approach.
0PBS3ZZ......................  Excision of left thumb phalanx,
                                percutaneous approach.
0PBS4ZZ......................  Excision of left thumb phalanx,
                                percutaneous endoscopic approach.
0PBT0ZZ......................  Excision of right finger phalanx, open
                                approach.
0PBT3ZZ......................  Excision of right finger phalanx,
                                percutaneous approach.
0PBT4ZZ......................  Excision of right finger phalanx,
                                percutaneous endoscopic approach.
0PBV0ZZ......................  Excision of left finger phalanx, open
                                approach.
0PBV3ZZ......................  Excision of left finger phalanx,
                                percutaneous approach.
0PBV4ZZ......................  Excision of left finger phalanx,
                                percutaneous endoscopic approach.
0PTR0ZZ......................  Resection of right thumb phalanx, open
                                approach.
0PTS0ZZ......................  Resection of left thumb phalanx, open
                                approach.
0PTT0ZZ......................  Resection of right finger phalanx, open
                                approach.
0PTV0ZZ......................  Resection of left finger phalanx, open
                                approach.
0RTW0ZZ......................  Resection of right finger phalangeal
                                joint, open approach.

[[Page 19227]]

 
0RTX0ZZ......................  Resection of left finger phalangeal
                                joint, open approach.
------------------------------------------------------------------------

    As noted in the previous discussion, whenever there is a surgical 
procedure reported on the claim that is unrelated to the MDC to which 
the case was assigned based on the principal diagnosis, it results in 
an MS-DRG assignment to a surgical class referred to as ``unrelated 
operating room procedures''.
    We examined the claims data for the three codes describing 
cellulitis of the finger (ICD-10-CM diagnosis codes L03.011 (Cellulitis 
of the right finger), L03.012 (Cellulitis of left finger), and L03.019 
(Cellulitis of unspecified finger)) to identify the average length of 
stay and average costs for cases reporting a principal diagnosis of 
cellulitis of the finger in conjunction with the excision of phalanx 
procedures listed in the table above. We note that there were no cases 
reporting a principal diagnosis of cellulitis of the finger in 
conjunction with the resection of phalanx procedures listed in the 
table above.

----------------------------------------------------------------------------------------------------------------
                                                                     Number of    Average length
                             MS-DRG                                    cases          of stay      Average costs
----------------------------------------------------------------------------------------------------------------
MS-DRG 981--Cases with principal diagnosis of cellulitis of the                2             3.5          $7,934
 finger and excision of phalanx procedure.......................
MS-DRG 982--Cases with principal diagnosis of cellulitis of the               11             4.2           7,244
 finger and excision of phalanx procedure.......................
MS-DRG 983--Cases with principal diagnosis of cellulitis of the                4             4.8           8,058
 finger and excision of phalanx procedure.......................
----------------------------------------------------------------------------------------------------------------

    We also examined the claims data to identify the average length of 
stay and average costs for all cases in MS-DRGs 579, 580, and 581. Our 
findings are shown in the table in section II.12.A.3.of the preamble of 
this proposed rule.
    While our clinical advisors noted that the average length of stay 
and average costs for cases in MS-DRGs 579, 580, and 581 are generally 
higher than the average length of stay and average costs for the subset 
of cases reporting a principal diagnosis of cellulitis of the finger 
and a procedure describing excision of phalanx, they believe that the 
procedures are clearly related to the principal diagnosis codes and, 
therefore, it is clinically appropriate for the procedures to group to 
the same MS-DRGs as the principal diagnoses, particularly given that 
procedures describing excision of phalanx with the diagnostic qualifier 
``X'' are already assigned to these MS-DRGs. In addition, our clinical 
advisors believe it is clinically appropriate for the procedures 
describing resection of phalanx to be assigned to MS-DRGs 579, 580, and 
581 as well. Therefore, we are proposing to add the procedure codes 
describing excision and resection of phalanx listed above to MS-DRGs 
579, 580, and 581. Under this proposal, cases reporting one of the 
excision or resection procedures listed in the table above in 
conjunction with a principal diagnosis from MDC 9 would group to MS-
DRGs 579, 580, and 581.
(4) Multiple Trauma With Internal Fixation of Joints
    We received a request to reassign cases involving multiple 
significant trauma with internal fixation of joints from MS-DRGs 981, 
982, and 983 to MS-DRGs 957, 958, and 959 (Other O.R. Procedures for 
Multiple Significant Trauma with MCC, with CC, and without CC/MCC, 
respectively). The requestor provided an example of several ICD-10-CM 
diagnosis codes that together described multiple significant trauma in 
conjunction with ICD-10-PCS procedure codes beginning with the prefix 
``0SH'' and ``0RH'' that describe internal fixation of joints. The 
requestor provided several suggestions to address this assignment, 
including: Adding all ICD-10-PCS procedure codes in MDC 8 (Diseases and 
Disorders of the Musculoskeletal System and Connective Tissue) with the 
exception of codes that group to MS-DRG 956 (Limb Reattachment, Hip and 
Femur Procedures for Multiple Significant Trauma) to MS-DRGs 957, 958, 
and 959; adding codes within the ``0SH'' and ``0RH'' code ranges to MDC 
24; and adding ICD-10-PCS procedure codes from all MDCs except those 
that currently group to MS-DRG 955 (Craniotomy for Multiple Significant 
Trauma) or MS-DRG 956 (Limb Reattachment, Hip and Femur Procedures for 
Multiple Significant Trauma) to MS-DRGs 957, 958, and 959.
    While we understand the requestor's concern about these multiple 
significant trauma cases, we believe any potential reassignment of 
these cases requires significant analysis. Similar to our analysis of 
MDC 14 (initially discussed at 81 FR 56854), there are multiple logic 
lists in MDC 24 that would need to be reviewed. For example, to satisfy 
the logic for multiple significant trauma, the logic requires a 
diagnosis code from the significant trauma principal diagnosis list and 
two or more significant trauma diagnoses from different body sites. The 
significant trauma logic lists for the other body sites (which include 
head, chest, abdominal, kidney, urinary system, pelvis or spine, upper 
limb, and lower limb) allow the extensive list of diagnosis codes 
included in the logic to be reported as a principal or secondary 
diagnosis. The analysis of the reporting of all the codes as a 
principal and/or secondary diagnosis within MDC 24, combined with the 
analysis of all of the ICD-10-PCS procedure codes within MDC 8, is 
anticipated to be a multi-year effort. Therefore, we plan to consider 
this issue for future rulemaking as part of our ongoing analysis of the 
unrelated procedure MS-DRGs.
(5) Totally Implantable Vascular Access Devices
    We received a request to reassign cases for insertion of totally 
implantable vascular access devices (TIVADs) listed in the table below 
when reported with principal diagnoses in MDCs other than MDC 9 
(Diseases and Disorders of the Skin, Subcutaneous Tissue and Breast) 
and MDC 11 (Diseases and Disorders of the Kidney and Urinary Tract) 
from MS-DRGs 981 through 983 to a surgical MS-DRG within the 
appropriate MDC based on the principal diagnosis. The requestor noted 
that the insertion of

[[Page 19228]]

TIVAD procedures are newly designated as O.R. procedures, effective 
October 1, 2018, and are assigned to MDCs 9 and 11. The requestor 
stated that TIVADs can be placed for a variety of purposes and are used 
to treat a wide range of malignancies at various sites and, therefore, 
would likely have a relationship to the principal diagnosis within any 
MDC. The requestor suggested that procedures describing the insertion 
of TIVADs group to surgical MS-DRGs within every MDC (other than MDCs 
2, 20, and 22, which do not contain surgical MS-DRGs). The requestor 
further stated that the surgical hierarchy should assign more 
significant O.R. procedures within each MDC to a higher position than 
procedures describing the insertion of TIVADs because these procedures 
consume less O.R. resources than more invasive procedures.

------------------------------------------------------------------------
       ICD-PCS code                       Code description
------------------------------------------------------------------------
0JH60WZ...................  Insertion of totally implantable vascular
                             access device into chest subcutaneous
                             tissue and fascia, open approach.
0JH80WZ...................  Insertion of totally implantable vascular
                             access device into abdomen subcutaneous
                             tissue and fascia, open approach.
0JHD0WZ...................  Insertion of totally implantable vascular
                             access device into right upper arm
                             subcutaneous tissue and fascia, open
                             approach.
0JHF0WZ...................  Insertion of totally implantable vascular
                             access device into left upper arm
                             subcutaneous tissue and fascia, open
                             approach.
0JHG0WZ...................  Insertion of totally implantable vascular
                             access device into right lower arm
                             subcutaneous tissue and fascia, open
                             approach.
0JHH0WZ...................  Insertion of totally implantable vascular
                             access device into left lower arm
                             subcutaneous tissue and fascia, open
                             approach.
0JHL0WZ...................  Insertion of totally implantable vascular
                             access device into right upper leg
                             subcutaneous tissue and fascia, open
                             approach.
0JHM0WZ...................  Insertion of totally implantable vascular
                             access device into left upper leg
                             subcutaneous tissue and fascia, open
                             approach.
0JHN0WZ...................  Insertion of totally implantable vascular
                             access device into right lower leg
                             subcutaneous tissue and fascia, open
                             approach.
0JHP0WZ...................  Insertion of totally implantable vascular
                             access device into left lower leg
                             subcutaneous tissue and fascia, open
                             approach.
------------------------------------------------------------------------

    While we agree that TIVAD procedures may be performed in connection 
with a variety of principal diagnoses, we note that because these 
procedures are newly designated as O.R. procedures effective October 1, 
2018, we do not yet have sufficient data to analyze this request. We 
plan to consider this issue in future rulemaking as part of our ongoing 
analysis of the unrelated procedure MS-DRGs.
(6) Gastric Band Procedure Complications or Infections
    We received a request to reassign cases for infection or 
complications due to gastric band procedures when reported with a 
procedure describing revision of or removal of extraluminal device in/
from the stomach from MS-DRGs 987, 988, and 989 (Non-Extensive O.R. 
Procedure Unrelated to Principal Diagnosis with MCC, with CC and 
without MCC/CC, respectively) to MS-DRGs 326, 327, and 328 (Stomach, 
Esophageal, and Duodenal Procedures with MCC, with CC, and without CC/
MCC, respectively). ICD-10-CM diagnosis codes K95.01 (Infection due to 
gastric band procedure) and K95.09 (Other complications of gastric band 
procedure) are used to report these conditions and are currently 
assigned to MDC 6 (Diseases and Disorders of the Digestive System). 
ICD-10-PCS procedure codes 0DW64CZ (Revision of extraluminal device in 
stomach, percutaneous endoscopic approach) and 0DP64CZ (Removal of 
extraluminal device from stomach, percutaneous endoscopic approach) are 
used to report the revision of, or removal of, an extraluminal device 
in/from the stomach and are currently assigned to MDC 10 (Endocrine, 
Nutritional and Metabolic Diseases and Disorders) in MS-DRGs 619, 620, 
and 621 (O.R. Procedures for Obesity with MCC with CC, and without CC/
MCC, respectively).
    Our analysis of this grouping issue confirmed that when procedures 
describing the revision of or removal of an extraluminal device in/from 
the stomach are reported with principal diagnoses in MDC 6 (such as 
ICD-10-CM diagnosis codes K95.01 and K95.09), in the absence of a 
procedure assigned to MDC 6, these cases group to MS-DRGs 987, 988, and 
989. As noted in the previous discussion, whenever there is a surgical 
procedure reported on the claim that is unrelated to the MDC to which 
the case was assigned based on the principal diagnosis, it results in 
an MS-DRG assignment to a surgical class referred to as ``unrelated 
operating room procedures''.
    We examined the claims data to identify cases involving ICD-10-PCS 
procedure codes 0DW64CZ and 0DP64CZ reported with a principal diagnosis 
of K95.01 or K95.09 that are currently grouping to MS-DRGs 987, 988, 
and 989. Our findings are shown in the table below.

----------------------------------------------------------------------------------------------------------------
                                                                     Number of    Average length
                             MS-DRG                                    cases          of stay      Average costs
----------------------------------------------------------------------------------------------------------------
MS-DRG 987--All cases...........................................           8,674              11         $23,885
MS-DRG 987--Cases reporting procedure code 0DW64CZ or 0DP64CZ                 20             6.6          17,873
 and principal diagnosis code K95.01 or K95.09..................
MS-DRG 988--All cases...........................................           8,391             5.7          12,294
MS-DRG 988--Cases reporting procedure code 0DW64CZ or 0DP64CZ                105             2.2           7,253
 and principal diagnosis code K95.01 or K95.09..................
MS-DRG 989--All cases...........................................           1,551             3.1           8,171
MS-DRG 989--Cases reporting procedure code 0DW64CZ or 0DP64CZ                120             1.6           6,010
 and principal diagnosis code K95.01 or K95.09..................
----------------------------------------------------------------------------------------------------------------

    We also examined the data for cases in MS-DRGs 326, 327, and 328, 
and our findings are provided in a table presented in section II.12.a. 
of the preamble of this proposed rule. While our clinical advisors 
noted that the average length of stay and average costs of cases in MS-
DRGs 326, 327, and 328 are significantly higher than the average length 
of stay and average costs for the subset of cases reporting procedure 
code 0DW64CZ or 0DP64CZ and a principal diagnosis code of K95.01 or 
K95.09, they believe that the procedures are clearly related to the 
principal diagnosis and, therefore, it is clinically appropriate for 
the procedures to group to the same MS-DRGs as the principal

[[Page 19229]]

diagnoses. In addition, our clinical advisors believe that because 
these procedures are intended to treat a complication of a procedure 
related to obesity, rather than the obesity itself, they are more 
appropriately assigned to stomach, esophageal, and duodenal procedures 
(MS-DRGs 326, 327, and 328) in MDC 6 than to procedures for obesity 
(MS-DRGs 619, 620, and 621) in MDC 10.
    Therefore, we are proposing to add ICD-10-PCS procedure codes 
0DW64CZ and 0DP64CZ to MDC 6 in MS-DRGs 326, 327, and 328. Under this 
proposal, cases reporting procedure code 0DW64CZ or 0DP64CZ in 
conjunction with a principal diagnosis code of K95.01 or K95.09 would 
group to MS-DRGs 326, 327, and 328.
(7) Peritoneal Dialysis Catheters
    We received a request to reassign cases for complications of 
peritoneal dialysis catheters when reported with procedure codes 
describing removal, revision, and/or insertion of new peritoneal 
dialysis catheters from MS-DRGs 981 through 983 to MS-DRGs 356, 357, 
and 358 (Other Digestive System O.R. Procedures with MCC, with CC, and 
without CC/MCC, respectively) in MDC 6 by adding the diagnosis codes 
describing complications of peritoneal dialysis catheters to MDC 6. We 
refer readers to section II.12.a. of the preamble of this proposed rule 
in which we describe our analysis of this issue as part of our broader 
review of the unrelated MS-DRGs. Our clinical advisors believe it is 
more appropriate to add the procedure codes describing removal, 
revision, and/or insertion of new peritoneal dialysis catheters to MS-
DRGs 907, 908, and 909 than to move the diagnosis codes describing 
complications of peritoneal dialysis catheters to MDC 6 because the 
diagnosis codes describe complications, rather than initial placement, 
of peritoneal dialysis catheters, and therefore, are most clinically 
aligned with the diagnosis codes assigned to MDC 21 (where they are 
currently assigned). In section II.12.a. of the preamble of this 
proposed rule, we are proposing to add procedures describing removal, 
revision, and/or insertion of peritoneal dialysis catheters to MS-DRGs 
907, 908, and 909 in MDC 21.
(8) Occlusion of Left Renal Vein
    We received a request to reassign cases for varicose veins in the 
pelvic region when reported with an embolization procedure from MS-DRGs 
981, 982 and 983 (Non-Extensive O.R. Procedure Unrelated to Principal 
Diagnosis with MCC, with CC, and without CC/MCC, respectively) to MS-
DRGs 715 and 716 (Other Male Reproductive System O.R. Procedures for 
Malignancy with CC/MCC and without CC/MCC, respectively) and MS-DRGs 
717 and 718 (Other Male Reproductive System O.R. Procedures Except 
Malignancy with CC/MCC and without CC/MCC, respectively) in MDC 12 
(Diseases and Disorders of the Male Reproductive System) and to MS-DRGs 
749 and 750 (Other Female Reproductive System O.R. Procedures with CC/
MCC and without CC/MCC, respectively) in MDC 13 (Diseases and Disorders 
of the Female Reproductive System). ICD-10-CM diagnosis code I86.2 
(Pelvic varices) is reported to identify the condition of varicose 
veins in the pelvic region and is currently assigned to MDC 12 and to 
MDC 13. ICD-10-PCS procedure code 06LB3DZ (Occlusion of left renal vein 
with intraluminal device, percutaneous approach) may be reported to 
describe an embolization procedure performed for the treatment of 
pelvic varices and is currently assigned to MDC 5 (Diseases and 
Disorders of the Circulatory System) in MS-DRGs 270, 271, and 272 
(Other Major Cardiovascular Procedures with MCC, with CC, and without 
CC/MCC, respectively), MDC 6 (Diseases and Disorders of the Digestive 
System) in MS-DRGs 356, 357, and 358 (Other Digestive System O.R. 
Procedures with MCC, with CC, and without CC/MCC, respectively), MDC 21 
(Injuries, Poisonings and Toxic Effects of Drugs) in MS-DRGs 907, 908, 
and 909 (Other O.R. Procedures for Injuries with MCC, CC, without CC/
MCC, respectively), and MDC 24 (Multiple Significant Trauma) in MS-DRGs 
957, 958, 959 (Other O.R. Procedures for Multiple Significant Trauma 
with MCC, with CC, and without CC/MCC, respectively). The requestor 
also noted that when this procedure is performed on the right renal 
vein (which is reported with ICD-10-PCS code 06L03DZ (Occlusion of 
inferior vena cava with intraluminal device, percutaneous approach) for 
varicose veins in the pelvic region, the case groups to MS-DRGs 715 and 
716 and MS-DRGs 717 and 718 in MDC 12 (for male patients) or MS-DRGs 
749 and 750 in MDC 13 (for female patients).
    Our analysis of this grouping issue confirmed that when ICD-10-CM 
diagnosis code I86.2 (Pelvic varices) is reported with ICD-10-PCS 
procedure code 06LB3DZ, the case groups to MS-DRGs 981, 982, and 983. 
As noted above in previous discussions, whenever there is a surgical 
procedure reported on the claim that is unrelated to the MDC to which 
the case was assigned based on the principal diagnosis, it results in 
an MS-DRG assignment to a surgical class referred to as ``unrelated 
operating room procedures.''
    We examined the claims data to identify cases involving procedure 
code 06LB3DZ in MS-DRGs 981, 982, and 983 reported with a principal 
diagnosis code of I86.2. We found no cases in the claims data.
    In the absence of data to examine, our clinical advisors reviewed 
this request and agree with the requestor that when the embolization 
procedure is performed on the left renal vein (reported with ICD-10-PCS 
procedure code 06LB3DZ), it should group to the same MS-DRGs as when it 
is performed on the right renal vein. Therefore, we are proposing to 
add ICD-10-PCS procedure code 06LB3DZ to MDC 12 in MS-DRGs 715, 716, 
717, and 718 and to MDC 13 in MS-DRGs 749 and 750. Under this proposal, 
cases reporting ICD-10-CM diagnosis code I86.2 with ICD-10-PCS 
procedure code 06LB3DZ would group to MDC 12 (for male patients) or MDC 
13 (for female patients).
13. Operating Room (O.R.) and Non-O.R. Issues
a. Background
    Under the IPPS MS-DRGs (and former CMS MS-DRGs), we have a list of 
procedure codes that are considered operating room (O.R.) procedures. 
Historically, we developed this list using physician panels that 
classified each procedure code based on the procedure and its effect on 
consumption of hospital resources. For example, generally the presence 
of a surgical procedure which required the use of the operating room 
would be expected to have a significant effect on the type of hospital 
resources (for example, operating room, recovery room, and anesthesia) 
used by a patient, and therefore, these patients were considered 
surgical. Because the claims data generally available do not precisely 
indicate whether a patient was taken to the operating room, surgical 
patients were identified based on the procedures that were performed. 
Generally, if the procedure was not expected to require the use of the 
operating room, the patient would be considered medical (non-O.R.).
    Currently, each ICD-10-PCS procedure code has designations that 
determine whether and in what way the presence of that procedure on a 
claim impacts the MS-DRG assignment. First, each ICD-10-PCS procedure 
code is either designated as an O.R. procedure for purposes of MS-DRG 
assignment

[[Page 19230]]

(``O.R. procedures'') or is not designated as an O.R. procedure for 
purposes of MS-DRG assignment (``non-O.R. procedures''). Second, for 
each procedure that is designated as an O.R. procedure, that O.R. 
procedure is further classified as either extensive or non-extensive. 
Third, for each procedure that is designated as a non-O.R. procedure, 
that non-O.R. procedure is further classified as either affecting the 
MS-DRG assignment or not affecting the MS-DRG assignment. We refer to 
these designations that do affect MS-DRG assignment as ``non-O.R. 
affecting the MS-DRG.'' For new procedure codes that have been 
finalized through the ICD-10 Coordination and Maintenance Committee 
meeting process and are proposed to be classified as O.R. procedures or 
non-O.R. procedures affecting the MS-DRG, our clinical advisors 
recommend the MS-DRG assignment which is then made available in 
association with the proposed rule (Table 6B.--New Procedure Codes) and 
subject to public comment. These proposed assignments are generally 
based on the assignment of predecessor codes or the assignment of 
similar codes. For example, we generally examine the MS-DRG assignment 
for similar procedures, such as the other approaches for that 
procedure, to determine the most appropriate MS-DRG assignment for 
procedures proposed to be newly designated as O.R. procedures. As 
discussed in section II.F.15. of the preamble of this proposed rule, we 
are making Table 6B.--New Procedure Codes--FY 2020 available on the CMS 
website at: https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/AcuteInpatientPPS/index.html. We also refer readers to the ICD-
10 MS-DRG Version 36 Definitions Manual at: https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/AcuteInpatientPPS/MS-DRG-Classifications-and-Software.html for detailed information regarding 
the designation of procedures as O.R. or non-O.R. (affecting the MS-
DRG) in Appendix E--Operating Room Procedures and Procedure Code/MS-DRG 
Index.
    Given the long period of time that has elapsed since the original 
O.R. (extensive and non-extensive) and non-O.R. designations were 
established, the incremental changes that have occurred to these O.R. 
and non-O.R. procedure code lists, and changes in the way inpatient 
care is delivered, we plan to conduct a comprehensive, systematic 
review of the ICD-10-PCS procedure codes. This will be a multi-year 
project during which we will also review the process for determining 
when a procedure is considered an operating room procedure. For 
example, we may restructure the current O.R. and non-O.R. designations 
for procedures by leveraging the detail that is now available in the 
ICD-10 claims data. We refer readers to the discussion regarding the 
designation of procedure codes in the FY 2018 IPPS/LTCH PPS final rule 
(82 FR 38066) where we stated that the determination of when a 
procedure code should be designated as an O.R. procedure has become a 
much more complex task. This is, in part, due to the number of various 
approaches available in the ICD-10-PCS classification, as well as 
changes in medical practice. While we have typically evaluated 
procedures on the basis of whether or not they would be performed in an 
operating room, we believe that there may be other factors to consider 
with regard to resource utilization, particularly with the 
implementation of ICD-10. Therefore, we are again soliciting public 
comments on what factors or criteria to consider in determining whether 
a procedure is designated as an O.R. procedure in the ICD-10-PCS 
classification system for future consideration. Commenters should 
submit their recommendations to the following email address: 
[email protected] by November 1, 2019.
    As a result of this planned review and potential restructuring, 
procedures that are currently designated as O.R. procedures may no 
longer warrant that designation, and conversely, procedures that are 
currently designated as non-O.R. procedures may warrant an O.R. type of 
designation. We intend to consider the resources used and how a 
procedure should affect the MS-DRG assignment. We may also consider the 
effect of specific surgical approaches to evaluate whether to subdivide 
specific MS-DRGs based on a specific surgical approach. We plan to 
utilize our available MedPAR claims data as a basis for this review and 
the input of our clinical advisors. As part of this comprehensive 
review of the procedure codes, we also intend to evaluate the MS-DRG 
assignment of the procedures and the current surgical hierarchy because 
both of these factor into the process of refining the ICD-10 MS-DRGs to 
better recognize complexity of service and resource utilization.
    We will provide more detail on this analysis and the methodology 
for conducting this review in future rulemaking. As we continue to 
develop our process and methodology, as noted above, we are soliciting 
public comments on other factors to consider in our refinement efforts 
to recognize and differentiate consumption of resources for the ICD-10 
MS-DRGs.
    In this proposed rule, we are addressing requests that we received 
regarding changing the designation of specific ICD-10-PCS procedure 
codes from non-O.R. to O.R. procedures, or changing the designation 
from O.R. procedure to non-O.R. procedure. Below we discuss the process 
that was utilized for evaluating the requests that were received for FY 
2020 consideration. For each procedure, our clinical advisors 
considered:
     Whether the procedure would typically require the 
resources of an operating room;
     Whether it is an extensive or a nonextensive procedure; 
and
     To which MS-DRGs the procedure should be assigned.
    We note that many MS-DRGs require the presence of any O.R. 
procedure. As a result, cases with a principal diagnosis associated 
with a particular MS-DRG would, by default, be grouped to that MS-DRG. 
Therefore, we do not list these MS-DRGs in our discussion below. 
Instead, we only discuss MS-DRGs that require explicitly adding the 
relevant procedures codes to the GROUPER logic in order for those 
procedure codes to affect the MS-DRG assignment as intended. In cases 
where we are proposing to change the designation of procedure codes 
from non-O.R. procedures to O.R. procedures, we also are proposing one 
or more MS-DRGs with which these procedures are clinically aligned and 
to which the procedure code would be assigned.
    In addition, cases that contain O.R. procedures will map to MS-DRG 
981, 982, or 983 (Extensive O.R. Procedure Unrelated to Principal 
Diagnosis with MCC, with CC, and without CC/MCC, respectively) or MS-
DRG 987, 988, or 989 (Non-Extensive O.R. Procedure Unrelated to 
Principal Diagnosis with MCC, with CC, and without CC/MCC, 
respectively) when they do not contain a principal diagnosis that 
corresponds to one of the MDCs to which that procedure is assigned. 
These procedures need not be assigned to MS-DRGs 981 through 989 in 
order for this to occur. Therefore, if requestors included some or all 
of MS-DRGs 981 through 989 in their request or included MS-DRGs that 
require the presence of any O.R. procedure, we did not specifically 
address that aspect in summarizing their request or our response to the 
request in the section below.
    For procedures that would not typically require the resources of an 
operating room, our clinical advisors

[[Page 19231]]

determined if the procedure should affect the MS-DRG assignment.
    We received several requests to change the designation of specific 
ICD-10-PCS procedure codes from non-O.R. procedures to O.R. procedures, 
or to change the designation from O.R. procedures to non-O.R. 
procedures. Below we detail and respond to some of those requests. With 
regard to the remaining requests, our clinical advisors believe it is 
appropriate to consider these requests as part of our comprehensive 
review of the procedure codes discussed above.
b. O.R. Procedures to Non-O.R. Procedures
(1) Bronchoalveolar Lavage
    Bronchoalveolar lavage (BAL) is a diagnostic procedure in which a 
bronchoscope is passed through the patient's mouth or nose into the 
lungs. A small amount of fluid is squirted into an area of the lung and 
then collected for examination. Two requestors identified 13 ICD-10-PCS 
procedure codes describing BAL procedures that generally can be 
performed at bedside and would not require the resources of an 
operating room. In the ICD-10 MS-DRG Version 36 Definitions Manual, 
these 13 ICD-10-PCS procedure codes are currently recognized as O.R. 
procedures for purposes of MS-DRG assignment.
    We agree with the requestors that these procedures do not typically 
require the resources of an operating room. Therefore, we are proposing 
to remove the following 13 procedure codes from the FY 2020 ICD-10 MS-
DRGs Version 37 Definitions Manual in Appendix E--Operating Room 
Procedures and Procedure Code/MS-DRG Index as O.R. procedures. Under 
this proposal, these procedures would no longer impact MS-DRG 
assignment.

------------------------------------------------------------------------
      ICD-10-PCS code                     Code description
------------------------------------------------------------------------
0B9H8ZX...................  Drainage of lung lingula, via natural or
                             artificial opening endoscopic, diagnostic.
0B9K8ZX...................  Drainage of right lung, via natural or
                             artificial opening endoscopic, diagnostic.
0B9L8ZX...................  Drainage of left lung, via natural or
                             artificial opening endoscopic, diagnostic.
0B9M8ZX...................  Drainage of bilateral lungs, via natural or
                             artificial opening endoscopic, diagnostic.
0B9C8ZZ...................  Drainage of right upper lung lobe, via
                             natural or artificial opening endoscopic.
0B9D8ZZ...................  Drainage of right middle lung lobe, via
                             natural or artificial opening endoscopic.
0B9F8ZZ...................  Drainage of right lower lung lobe, via
                             natural or artificial opening endoscopic.
0B9G8ZZ...................  Drainage of left upper lung lobe, via
                             natural or artificial opening endoscopic.
0B9H8ZZ...................  Drainage of Lung Lingula, via natural or
                             artificial opening endoscopic.
0B9J8ZZ...................  Drainage of left lower lung lobe, via
                             natural or artificial opening endoscopic.
0B9K8ZZ...................  Drainage of right lung, via natural or
                             artificial opening endoscopic.
0B9L8ZZ...................  Drainage of left lung, via natural or
                             artificial opening endoscopic.
0B9M8ZZ...................  Drainage of bilateral lungs, via natural or
                             artificial opening endoscopic.
------------------------------------------------------------------------

(2) Percutaneous Drainage of Pelvic Cavity
    One requestor identified two ICD-10-PCS procedure codes that 
describe procedures involving percutaneous drainage of the pelvic 
cavity. The two ICD-10-PCS procedure codes are: 0W9J3ZX (Drainage of 
pelvic cavity, percutaneous approach, diagnostic) and 0W9J3ZZ (Drainage 
of pelvic cavity, percutaneous approach).
    ICD-10-PCS procedure code 0W9J3ZX is currently recognized as an 
O.R. procedure for purposes of MS-DRG assignment, while the 
nondiagnostic ICD-10-PCS procedure code 0W9J3ZZ is not recognized as an 
O.R. procedure for purposes of MS-DRG assignment. The requestor stated 
that percutaneous drainage procedures of the pelvic cavity for both 
diagnostic and nondiagnostic purposes are not complex procedures and 
both types of procedures are usually performed in a radiology suite. 
The requestor stated that both procedures should be classified as non-
O.R. procedures.
    We agree with the requestor that these procedures do not typically 
require the resources of an operating room. Therefore, we are proposing 
to remove procedure code 0W9J3ZX from the FY 2020 ICD-10 MS-DRG Version 
37 Definitions Manual in Appendix E--Operating Room Procedures and 
Procedure Code/MS-DRG Index as an O.R. procedure. Under this proposal, 
this procedure would no longer impact MS-DRG assignment.
(3) Percutaneous Removal of Drainage Device
    One requestor identified two ICD-10-PCS procedure codes that 
describe procedures involving the percutaneous placement and removal of 
drainage devices from the pancreas. These two ICD-10-PCS procedure 
codes are: 0FPG30Z (Removal of drainage device from pancreas, 
percutaneous approach) and 0F9G30Z (Drainage of pancreas with drainage 
device, percutaneous approach). ICD-10-PCS procedure code 0FPG30Z is 
currently recognized as an O.R. procedure for purposes of MS-DRG 
assignment, while ICD-10-PCS procedure code 0F9G30Z is not recognized 
as an O.R. procedure for purposes of MS-DRG assignment. The requestor 
stated that percutaneous placement of drains is typically performed in 
a radiology suite under image guidance and removal of a drain would not 
be more resource intensive than its placement.
    We agree with the requestor that these procedures do not typically 
require the resources of an operating room. Therefore, we are proposing 
to remove ICD-10-PCS procedure code 0FPG30Z from the FY 2020 ICD-10 MS-
DRG Version 37 Definitions Manual in Appendix E--Operating Room 
Procedures and Procedure Code/MS-DRG Index as an O.R. procedure. Under 
this proposal, this procedure would no longer impact MS-DRG assignment.
c. Non-O.R. Procedures to O.R. Procedures
(1) Percutaneous Occlusion of Gastric Artery
    One requestor identified two ICD-10-PCS procedure codes that 
describe percutaneous occlusion and restriction of the gastric artery 
with intraluminal device, ICD-10-PCS procedure codes 04L23DZ (Occlusion 
of gastric artery with intraluminal device, percutaneous approach) and 
04V23DZ (Restriction of gastric artery with intraluminal device, 
percutaneous approach), that the requestor stated are currently not 
recognized as O.R. procedures for purposes of MS-DRG assignment. The 
requestor noted that transcatheter endovascular embolization of the 
gastric artery with intraluminal devices uses comparable resources to 
transcatheter endovascular embolization of the gastroduodenal artery. 
The requestor stated that ICD-10-PCS procedure codes 04L33DZ (Occlusion 
of hepatic

[[Page 19232]]

artery with intraluminal device, percutaneous approach) and 04V33DZ 
(Restriction of hepatic artery with intraluminal device, percutaneous 
approach) are recognized as O.R. procedures for purposes of MS-DRG 
assignment, and ICD-10-PCS procedure codes 04L23DZ and 04V23DZ should 
therefore also be recognized as O.R. procedures for purposes of MS-DRG 
assignment. We note that, contrary to the requestor's statement, ICD-
10-PCS procedure code 04V23DZ is already recognized as an O.R. 
procedure for purposes of MS-DRG assignment.
    We agree with the requestor that ICD-10-PCS procedure code 04L23DZ 
typically requires the resources of an operating room. Therefore, we 
are proposing to add this code to the FY 2020 ICD-10 MS-DRG Version 37 
Definitions Manual in Appendix E--Operating Room Procedures and 
Procedure Code/MS-DRG Index as an O.R. procedure assigned to MS-DRGs 
270, 271, and 272 (Other Major Cardiovascular Procedures with MCC, CC, 
without CC/MCC, respectively) in MDC 05 (Diseases and Disorders of the 
Circulatory System); MS-DRGs 356, 357, and 358 (Other Digestive System 
O.R. Procedures, with MCC, CC, without CC/MCC, respectively) in MDC 06 
(Diseases and Disorders of the Digestive System); MS-DRGs 907, 908, and 
909 (Other O.R. Procedures for Injuries with MCC, CC, without CC/MCC, 
respectively) in MDC 21 (Injuries, Poisonings and Toxic Effects of 
Drugs); and MS-DRGs 957, 958, and 959 (Other O.R. Procedures for 
Multiple Significant Trauma with MCC, CC, without CC/MCC, respectively) 
in MDC 24 (Multiple Significant Trauma).
(2) Endoscopic Insertion of Endobronchial Valves
    In the FY 2019 IPPS/LTCH PPS final rule (83 FR 41257), we discussed 
a comment we received in response to the FY 2019 IPPS/LTCH PPS proposed 
rule regarding eight ICD-10-PCS procedure codes that describe 
endobronchial valve procedures that the commenter believed should be 
designated as O.R. procedures. The codes are identified in the 
following table.

------------------------------------------------------------------------
      ICD-10-PCS code                     Code description
------------------------------------------------------------------------
0BH38GZ...................  Insertion of endobronchial valve into right
                             main bronchus, via natural or artificial
                             opening endoscopic.
0BH48GZ...................  Insertion of endobronchial valve into right
                             upper lobe bronchus, via natural or
                             artificial opening endoscopic.
0BH58GZ...................  Insertion of endobronchial valve into right
                             middle lobe bronchus, via natural or
                             artificial opening endoscopic.
0BH68GZ...................  Insertion of endobronchial valve into right
                             lower lobe bronchus, via natural or
                             artificial opening endoscopic.
0BH78GZ...................  Insertion of endobronchial valve into left
                             main bronchus, via natural or artificial
                             opening endoscopic.
0BH88GZ...................  Insertion of endobronchial valve into left
                             upper lobe bronchus, via natural or
                             artificial opening endoscopic.
0BH98GZ...................  Insertion of endobronchial valve into
                             lingula bronchus, via natural or artificial
                             opening endoscopic.
0BHB8GZ...................  Insertion of endobronchial valve into left
                             lower lobe bronchus, via natural or
                             artificial opening endoscopic.
------------------------------------------------------------------------

    The commenter stated that these procedures are most commonly 
performed in the O.R., given the need for better monitoring and support 
through the process of identifying and occluding a prolonged air leak 
using endobronchial valve technology. The commenter also noted that 
other endobronchial valve procedures have an O.R. designation. We noted 
that, in the ICD-10 MS-DRGs Version 35, these eight ICD-10-PCS 
procedure codes are not recognized as O.R. procedures for purposes of 
MS-DRG assignment. The commenter requested that these eight procedure 
codes be assigned to MS-DRG 163 (Major Chest Procedures with MCC) due 
to similar cost and resource use. As discussed in the FY 2019 IPPS/LTCH 
PPS final rule, our clinical advisors disagreed with the commenter that 
the eight identified procedures typically require the use of an 
operating room, and believed that these procedures would typically be 
performed in an endoscopy suite. Therefore, we did not finalize a 
change to the eight procedure codes describing endoscopic insertion of 
an endobronchial valve listed in the table above for FY 2019 under the 
ICD-10 MS-DRGs Version 36.
    After publication of the FY 2019 IPPS/LTCH PPS final rule, we 
received feedback from several stakeholders expressing continued 
concern with the designation of the eight ICD-10-PCS procedure codes 
describing the endoscopic insertion of an endobronchial valve listed in 
the table above, including requests to reconsider the designation of 
these codes for FY 2020. Some requestors stated that while they 
appreciated CMS' attention to the issue, they believed that important 
clinical and financial factors had been overlooked. The requestors 
noted that while the site of care is an important consideration for MS-
DRG assignment, there are other clinical factors such as case 
complexity, patient health risk and the need for anesthesia that also 
affect hospital resource consumption and should influence MS-DRG 
assignment. With regard to complexity, the requestors stated that many 
of these patients are high-risk, often recovering from major lung 
surgery and have significantly compromised respiratory function. 
According to one requestor, these patients may have major 
comorbidities, such as cancer or emphysema contributing to longer 
lengths of stay in the hospital. This requestor acknowledged that 
procedures performed for the endoscopic insertion of an endobronchial 
valve are often, but not always, performed in the O.R., however, the 
requestor also noted this should not preclude the designation of these 
procedures as O.R. procedures since there have been other examples of 
reclassification requests where the combination of factors, such as 
treatment difficulty, resource utilization, patient health status, and 
anesthesia administration were considered in the decision to change the 
designation for a procedure from non-O.R. to O.R. Another requestor 
stated that CMS' current designation of a procedure involving the 
endoscopic insertion of an endobronchial valve as a non-O.R. procedure 
is not reflective of actual practice and this designation has payment 
consequences that may affect access to the treatment for a vulnerable 
patient population, with limited treatment options. The requestor 
recommended that procedures involving the endoscopic insertion of an 
endobronchial valve should be designated as O.R. procedures and 
assigned to MS-DRGs 163, 164, and 165 (Major Chest Procedures with MCC, 
with CC and without CC/MCC, respectively). In addition, a few of the 
requestors also conducted their own analyses and indicated that if 
procedures involving the endoscopic insertion of an endobronchial valve 
were to be assigned to MS-DRGs 163, 164, and 165, the average costs of 
the cases reporting a procedure code describing the endoscopic 
insertion of an endobronchial valve would still be higher compared to 
all the cases in the assigned MS-DRG.
    We examined claims data from the September 2018 update of the FY 
2018 MedPAR file for MS-DRGs 163, 164 and

[[Page 19233]]

165 to identify cases reporting any one of the eight procedure codes 
listed in the above table describing the endoscopic insertion of an 
endobronchial valve. Cases reporting one of these procedure codes would 
be assigned to MS-DRG 163, 164, or 165 if at least one other procedure 
that is designated as an O.R. procedure and assigned to these MS-DRGs 
was also reported on the claim. In addition, cases reporting a 
procedure code describing the endoscopic insertion of an endobronchial 
valve with a different surgical approach are assigned to MS-DRGs 163, 
164, and 165. Our findings are shown in the following table.

         MS-DRGs for Major Chest Procedures With Endoscopic Insertion of Endobronchial Valve Procedures
----------------------------------------------------------------------------------------------------------------
                                                                     Number of    Average length
                             MS-DRG                                    cases          of stay      Average costs
----------------------------------------------------------------------------------------------------------------
MS-DRG 163--All cases...........................................          10,812            11.6         $33,433
MS-DRG 163--Cases reporting a procedure for the endoscopic                    49            21.1          53,641
 insertion of an endobronchial valve............................
MS-DRG 164--All cases...........................................          14,800             5.6          18,202
MS-DRG 164--Cases reporting a procedure for the endoscopic                    23              14          37,287
 insertion of an endobronchial valve............................
MS-DRG 165--All cases...........................................           7,907             3.3          13,408
MS-DRG 165--Cases reporting a procedure for the endoscopic                     3            18.3          39,249
 insertion of an endobronchial valve............................
----------------------------------------------------------------------------------------------------------------

    We found a total of 10,812 cases in MS-DRG 163 with an average 
length of stay of 11.6 days and average costs of $33,433. Of those 
10,812 cases, we found 49 cases reporting a procedure for the 
endoscopic insertion of an endobronchial valve with an average length 
of stay of 21.1 days and average costs of $53,641. For MS-DRG 164, we 
found a total of 14,800 cases with an average length of stay of 5.6 
days and average costs of $18,202. Of those 14,800 cases, we found 23 
cases reporting a procedure for the endoscopic insertion of an 
endobronchial valve with an average length of stay of 14 days and 
average costs of $37,287. For MS-DRG 165, we found a total of 7,907 
cases with an average length of stay of 3.3 days and average costs of 
$13,408. Of those 7,907 cases, we found 3 cases reporting a procedure 
for the endoscopic insertion of an endobronchial valve with an average 
length of stay of 18.3 days and average costs of $39,249.
    We also examined claims data to identify any cases reporting any 
one of the eight procedure codes listed in the table above describing 
the endoscopic insertion of an endobronchial valve within MS-DRGs 166, 
167, and 168 (Other Respiratory System O.R. Procedures with MCC, with 
CC, and without CC/MCC, respectively). Cases reporting one of these 
procedure codes would be assigned to MS-DRG 166, 167, or 168 if at 
least one other procedure that is designated as an O.R. procedure and 
assigned to these MS-DRGs was also reported on the claim. In addition, 
MS-DRGs 166, 167, and 168 are the other surgical MS-DRGs where cases 
reporting a respiratory diagnosis within MDC 4 would be assigned. Our 
findings are shown in the following table.

      MS-DRGs for Other Respiratory System O.R. Procedures With Endoscopic Insertion of Endobronchial Valve
----------------------------------------------------------------------------------------------------------------
                                                                     Number of    Average length
                             MS-DRG                                    cases          of stay      Average costs
----------------------------------------------------------------------------------------------------------------
MS-DRG 166--All cases...........................................          16,050            10.6         $26,645
MS-DRG 166--Cases reporting a procedure for the endoscopic                    11            25.7          71,700
 insertion of an endobronchial valve............................
MS-DRG 167--All cases...........................................           8,165             5.3          13,687
MS-DRG 167--Cases reporting a procedure for the endoscopic                     4              10          28,847
 insertion of an endobronchial valve............................
MS-DRG 168--All cases...........................................           2,430             2.8           9,645
----------------------------------------------------------------------------------------------------------------

    We found a total of 16,050 cases in MS-DRG 166 with an average 
length of stay of 10.6 days and average costs of $26,645. Of those 
16,050 cases, we found 11 cases reporting a procedure for the 
endoscopic insertion of an endobronchial valve with an average length 
of stay of 25.7 days and average costs of $71,700. For MS-DRG 167, we 
found a total of 8,165 cases with an average length of stay of 5.3 days 
and average costs of $13,687. Of those 8,165 cases, we found 4 cases 
reporting a procedure for the endoscopic insertion of an endobronchial 
valve with an average length of stay of 10 days and average costs of 
$28,847. For MS-DRG 168, we found a total of 2,430 cases with an 
average length of stay of 2.8 days and average costs of $9,645. Of 
those 2,430 cases, we did not find any cases reporting a procedure for 
the endoscopic insertion of an endobronchial valve.
    The results of our data analysis indicate that cases reporting a 
procedure for the endoscopic insertion of an endobronchial valve in MS-
DRGs 163, 164, 165, 166, and 167 have a longer length of stay and 
higher average costs when compared to all the cases in their assigned 
MS-DRG. Because the data are based on surgical MS-DRGs 163, 164, 165, 
166 and 167, and the procedure codes for endoscopic insertion of an 
endobronchial valve are currently designated as non-O.R. procedures, 
there was at least one other O.R. procedure reported on the claim 
resulting in case assignment to one of those MS-DRGs. Our clinical 
advisors indicated that because there was another O.R. procedure 
reported, the insertion of the endobronchial valve procedure may or may 
not have been

[[Page 19234]]

the main determinant of resource use for those cases. Therefore, we 
conducted further analysis to evaluate cases for which no other O.R. 
procedure was performed with the endoscopic insertion of an 
endobronchial valve and case assignment resulted in a medical MS-DRG. 
Our findings are shown in the following table.

                        Medical MS-DRGs With Insertion of Endobronchial Valve Procedures
----------------------------------------------------------------------------------------------------------------
                                                                     Number of    Average length
                             MS-DRG                                    cases          of stay      Average costs
----------------------------------------------------------------------------------------------------------------
MS-DRG 069 (Transient Ischemia without Thrombolytic)............               1               9         $26,002
MS-DRG 177 (Respiratory Infections and Inflammations with MCC)..              11            19.5          33,877
MS-DRG 178 (Respiratory Infections and Inflammations with CC)...               4            10.8          20,109
MS-DRG 180 (Respiratory Neoplasms with MCC).....................               2            11.5          19,273
MS-DRG 181 (Respiratory Neoplasms with MCC).....................               1               3          12,641
MS-DRG 186 (Pleural Effusion with MCC)..........................               1               8          23,609
MS-DRG 187 (Pleural Effusion with CC)...........................               1              18          49,214
MS-DRG 189 (Pulmonary Edema and Respiratory Failure)............               2            13.5          65,431
MS-DRG 190 (Chronic Obstructive Pulmonary Disease with MCC).....               2               9          39,925
MS-DRG 191 (Chronic Obstructive Pulmonary Disease with CC)......               1              15          55,958
MS-DRG 192 (Chronic Obstructive Pulmonary Disease without CC/                  1               5          10,394
 MCC)...........................................................
MS-DRG 193 (Simple Pneumonia and Pleurisy with MCC).............               1              18          27,182
MS-DRG 197 (Interstitial Lung Disease with CC)..................               1              12          11,458
MS-DRG 199 (Pneumothorax with MCC)..............................              28            16.4          38,384
MS-DRG 200 (Pneumothorax with CC)...............................              11             8.3          20,764
MS-DRG 201 (Pneumothorax without CC/MCC)........................               2              10          20,243
MS-DRG 205 (Other Respiratory System Diagnoses with MCC)........               2             4.5          10,851
MS-DRG 207 (Respiratory System Diagnosis with Ventilation                      4              20          67,299
 Support >96 Hours or Peripheral Extracorporeal Membrane
 Oxygenation (ECMO))............................................
MS-DRG 208 (Respiratory System Diagnosis with Ventilation                      8            13.6          32,533
 Support [lE]96 Hours or Peripheral Extracorporeal Membrane
 Oxygenation (ECMO))............................................
MS-DRG 815 (Reticuloendothelial and Immunity Disorders with CC).               1               5          17,379
MS-DRG 871 (Septicemia or Severe Sepsis without Mechanical                     3              15          39,706
 Ventilation >96 Hours with MCC)................................
MS-DRG 919 (Complications of Treatment with MCC)................               2               5          36,143
MS-DRG 920 (Complications of Treatment with CC).................               1               5          14,923
                                                                 -----------------------------------------------
    Total.......................................................              91            13.7          33,377
----------------------------------------------------------------------------------------------------------------

    The data indicate that there is a wide variation in the average 
length of stay and average costs for cases reporting a procedure for 
the endoscopic insertion of an endobronchial valve, with volume 
generally low across MS-DRGs. As shown in the table, for several of the 
medical MS-DRGs, there was only one case reporting a procedure for the 
endoscopic insertion of an endobronchial valve. The highest volume of 
cases reporting a procedure for the endoscopic insertion of an 
endobronchial valve was found in MS-DRG 199 (Pneumothorax with MCC) 
with a total of 28 cases with an average length of stay of 16.4 days 
and average costs of $38,384. The highest average costs and longest 
average length of stay for cases reporting a procedure for the 
endoscopic insertion of an endobronchial valve was $67,299 in MS-DRG 
207 (Respiratory System Diagnosis with Ventilator Support >96 Hours or 
Peripheral Extracorporeal Membrane Oxygenation (ECMO)) where 4 cases 
were found with an average length of stay of 20 days. Overall, there 
was a total of 91 cases reporting the insertion of an endobronchial 
valve procedure with an average length of stay of 13.7 days and average 
costs of $33,377 across the medical MS-DRGs.
    Our clinical advisors agree that the subset of patients who undergo 
endoscopic insertion of an endobronchial procedure are complex and may 
have multiple comorbidities such as severe underlying lung disease that 
impact the hospital length of stay. They also believe that, as we begin 
the process of refining how procedure codes may be classified under 
ICD-10-PCS, including designation of a procedure as O.R. or non-O.R., 
we should take into consideration whether the procedure is driving 
resource use for the admission. (We refer the reader to section 
II.F.13.a. of the preamble of this proposed rule for the discussion of 
our plans to conduct a comprehensive review of the ICD-10-PCS procedure 
codes). Based on the claims data analysis, which show a wide variation 
in average costs for cases reporting endoscopic insertion of an 
endobronchial valve without an O.R. procedure, our clinical advisors 
are not convinced that endoscopic insertion of an endobronchial valve 
is a key contributing factor to the consumption of resources as 
reflected in the data. They also believe, in review of the procedures 
that are currently assigned to MS-DRGs 163, 164, 165, 166, 167, and 
168, that further refinement of these MS-DRGs may be warranted. For 
these reasons, at this time, our clinical advisors do not support 
designating endoscopic insertion of an endobronchial valve as an O.R. 
procedure, nor do they support assignment of these procedures to MS-
DRGs 163, 164, and 165 until additional analyses can be performed for 
this subset of patients as part of the comprehensive procedure code 
review.
    For the reasons described above, we are not proposing to change the 
current non-O.R. designation of the eight ICD-10-PCS procedure codes 
that describe endoscopic insertion of an endobronchial valve. However, 
because we agree that endoscopic insertion of an endobronchial valve 
procedures are performed on clinically complex patients, we believe it 
may be appropriate to consider designating these procedures as non-O.R. 
affecting specific MS-DRGs for FY 2020. Therefore, we are requesting 
public comment on designating these procedure codes as non-O.R. 
procedures affecting the MS-DRG assignment, including the specific MS-
DRGs that cases reporting the endoscopic insertion

[[Page 19235]]

of an endobronchial valve should affect for FY 2020. As noted, it is 
not clear based on the claims data to what degree the endoscopic 
insertion of an endobronchial valve is a contributing factor for the 
consumption of resources for these clinically complex patients and 
given the potential refinement that may be needed for MS-DRGs 163, 164, 
165, 166, 167, and 168, we are soliciting comment on whether cases 
reporting the endoscopic insertion of an endobronchial valve should 
affect any of these MS-DRGs or other MS-DRGs.
14. Proposed Changes to the MS-DRG Diagnosis Codes for FY 2020
a. Background of the CC List and the CC Exclusions List
    Under the IPPS MS-DRG classification system, we have developed a 
standard list of diagnoses that are considered CCs. Historically, we 
developed this list using physician panels that classified each 
diagnosis code based on whether the diagnosis, when present as a 
secondary condition, would be considered a substantial complication or 
comorbidity. A substantial complication or comorbidity was defined as a 
condition that, because of its presence with a specific principal 
diagnosis, would cause an increase in the length-of-stay by at least 1 
day in at least 75 percent of the patients. However, depending on the 
principal diagnosis of the patient, some diagnoses on the basic list of 
complications and comorbidities may be excluded if they are closely 
related to the principal diagnosis. In FY 2008, we evaluated each 
diagnosis code to determine its impact on resource use and to determine 
the most appropriate CC subclassification (non-CC, CC, or MCC) 
assignment. We refer readers to sections II.D.2. and 3. of the preamble 
of the FY 2008 IPPS final rule with comment period for a discussion of 
the refinement of CCs in relation to the MS-DRGs we adopted for FY 2008 
(72 FR 47152 through 47171).
b. Overview of Comprehensive CC/MCC Analysis
    In the FY 2008 IPPS/LTCH PPS final rule (72 FR 47159), we described 
our process for establishing three different levels of CC severity into 
which we would subdivide the diagnosis codes. The categorization of 
diagnoses as an MCC, a CC, or a non-CC was accomplished using an 
iterative approach in which each diagnosis was evaluated to determine 
the extent to which its presence as a secondary diagnosis resulted in 
increased hospital resource use. We refer readers to the FY 2008 IPPS/
LTCH PPS final rule (72 FR 47159) for a complete discussion of our 
approach. Since this comprehensive analysis was completed for FY 2008, 
we have evaluated diagnosis codes individually when receiving requests 
to change the severity level of specific diagnosis codes. However, 
given the transition to ICD-10-CM and the significant changes that have 
occurred to diagnosis codes since this review, we believe it is 
necessary to conduct a comprehensive analysis once again. We have 
completed this analysis and we are discussing our findings in this 
proposed rule. We used the same methodology utilized in FY 2008 to 
conduct this analysis, as described below.
    For each secondary diagnosis, we measured the impact in resource 
use for the following three subsets of patients:
    (1) Patients with no other secondary diagnosis or with all other 
secondary diagnoses that are non-CCs.
    (2) Patients with at least one other secondary diagnosis that is a 
CC but none that is an MCC.
    (3) Patients with at least one other secondary diagnosis that is an 
MCC.
    Numerical resource impact values were assigned for each diagnosis 
as follows:

------------------------------------------------------------------------
              Value                               Meaning
------------------------------------------------------------------------
0................................  Significantly below expected value
                                    for the non-CC subgroup.
1................................  Approximately equal to expected value
                                    for the non-CC subgroup.
2................................  Approximately equal to expected value
                                    for the CC subgroup.
3................................  Approximately equal to expected value
                                    for the MCC subgroup.
4................................  Significantly above the expected
                                    value for the MCC subgroup.
------------------------------------------------------------------------

    Each diagnosis for which Medicare data were available was evaluated 
to determine its impact on resource use and to determine the most 
appropriate CC subclass (non-CC, CC, or MCC) assignment. In order to 
make this determination, the average cost for each subset of cases was 
compared to the expected cost for cases in that subset. The following 
format was used to evaluate each diagnosis:

--------------------------------------------------------------------------------------------------------------------------------------------------------
 
--------------------------------------------------------------------------------------------------------------------------------------------------------
               Code       Diagnosis                    Cnt1               C1                 Cnt2               C2                 Cnt3               C3
--------------------------------------------------------------------------------------------------------------------------------------------------------

    Count (Cnt) is the number of patients in each subset and C1, C2, 
and C3 are a measure of the impact on resource use of patients in each 
of the subsets. The C1, C2, and C3 values are a measure of the ratio of 
average costs for patients with these conditions to the expected 
average cost across all cases. The C1 value reflects a patient with no 
other secondary diagnosis or with all other secondary diagnoses that 
are non-CCs. The C2 value reflects a patient with at least one other 
secondary diagnosis that is a CC but none that is a major CC. The C3 
value reflects a patient with at least one other secondary diagnosis 
that is a major CC. A value close to 1.0 in the C1 field would suggest 
that the code produces the same expected value as a non-CC diagnosis. 
That is, average costs for the case are similar to the expected average 
costs for that subset and the diagnosis is not expected to increase 
resource usage. A higher value in the C1 (or C2 and C3) field suggests 
more resource usage is associated with the diagnosis and an increased 
likelihood that it is more like a CC or major CC than a non-CC. Thus, a 
value close to 2.0 suggests the condition is more like a CC than a non-
CC but not as significant in resource usage as an MCC. A value close to 
3.0 suggests the condition is expected to consume resources more 
similar to an MCC than a CC or non-CC. For example, a C1 value of 1.8 
for a secondary diagnosis means that for the subset of patients who 
have the secondary diagnosis and have either no other secondary 
diagnosis present, or all the other secondary diagnoses present are 
non-CCs, the impact on resource use of the secondary diagnoses is 
greater than the expected value for a non-CC by an amount equal to 80 
percent of the difference between the expected value of a CC and a non-
CC (that is, the impact on resource use of the secondary diagnosis is 
closer to a CC than a non-CC).
    These mathematical constructs are used as guides in conjunction 
with the judgment of our clinical advisors to classify each secondary 
diagnosis reviewed as an MCC, a CC, or a non-CC. Our clinical advisors 
reviewed the resource use impact reports and suggested modifications to 
the initial CC subclass assignments when clinically appropriate.
c. Proposed Changes to Severity Levels
(1) Summary of Proposed Changes
    The diagnosis codes for which we are proposing a change in severity 
level designation as a result of the analysis

[[Page 19236]]

described in this proposed rule are shown in Table 6P.1c. (which is 
available via the internet on the CMS website at: http://www.cms.hhs.gov/Medicare/Medicare-Fee-for-Service-Payment/AcuteInpatientPPS/index.html). Using the method described above to 
perform our comprehensive CC/MCC analysis, our clinical advisors 
recommended a change in the severity level designation for 1,492 ICD-
10-CM diagnosis codes. As shown in Table 6P.1c. associated with this 
proposed rule, the proposed changes to severity level resulting from 
our comprehensive analysis would move some diagnosis codes to a higher 
severity level designation and other diagnosis codes to a lower 
severity level designation, as indicated in the two columns which 
display CMS' FY 2019 classification in column C and the proposed 
changes for FY 2020 in column D.
    The table below shows the Version 36 ICD-10 MS-DRG categorization 
of diagnosis codes by severity level.

                   Current Categorization of CC Codes
                              [Version 36]
------------------------------------------------------------------------
                                                             Number of
                                                               codes
------------------------------------------------------------------------
MCC.....................................................           3,244
CC......................................................          14,528
Non-CC..................................................          54,160
                                                         ---------------
    Total...............................................          71,932
------------------------------------------------------------------------

    The following table compares the Version 36 ICD-10 MS-DRG CC list 
and the proposed Version 37 ICD-10 MS-DRG CC list. There are 17,772 
diagnosis codes on the Version 36 MCC/CC lists. The proposed MCC/CC 
severity level changes would reduce the number of diagnosis codes on 
the MCC/CC lists to 16,790 (3,099 + 13,691). Based on the Version 36 
MCC/CC lists, 81.5 percent of cases have at least one MCC/CC present, 
using claims data from the September 2018 update of the FY 2018 MedPAR 
file. Based on the proposed Version 37 MCC/CC lists, the percent of 
cases having at least one MCC/CC present would be reduced to 76.6 
percent.

           Comparison of Current CC List and Proposed CC List
------------------------------------------------------------------------
                                            Current CC      Proposed CC
                                               List            List
------------------------------------------------------------------------
Codes designated as an MCC..............           3,244           3,099
Percent of cases with one or more MCCs..           41.0%           36.3%
Average charge of cases with one or more         $16,439         $16,490
 MCCs...................................
Codes designated as a CC................          14,528          13,691
Percent of cases with one or more CCs...           40.5%           40.3%
Average charge of cases with one or more         $10,332         $10,518
 CCs....................................
Codes designated as non-CC..............          54,160          55,142
Percent of cases with no CC.............           18.5%           23.4%
Average charge of cases with no CCs.....          $9,885         $10,166
------------------------------------------------------------------------

    Using the method described above to perform our comprehensive 
analysis, we are proposing to modify the Version 36 CC subclass 
assignments for 2.1 percent of the ICD-10-CM diagnosis codes, as 
summarized in the table below.

                                                         Proposed MCC/CC Subclass Modifications
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                             Proposed        Proposed        Proposed
                                                            Version 36       Proposed                       version 37      version 37      Version 37
                                                          severity level    version 37                     change to MCC   change to CC   change to non-
               Severity level--CC subclass                   number of    severity level  Percent change     subclass,       subclass,     CC subclass,
                                                               codes         number of                       number of       number of       number of
                                                                               codes                           codes           codes           codes
--------------------------------------------------------------------------------------------------------------------------------------------------------
MCC.....................................................           3,244           3,099            -4.5             N/A             136              17
CC......................................................          14,528          13,691            -5.8               8             N/A           1,148
Non-CC..................................................          54,160          55,142             1.8               0             183             N/A
                                                         -----------------------------------------------------------------------------------------------
    Total...............................................          71,932          71,932             N/A               8             319           1,166
--------------------------------------------------------------------------------------------------------------------------------------------------------

    As a result of these proposed changes, of the 71,932 diagnosis 
codes included in the analysis, the net result would be a decrease of 
145 (3,244-3,099) codes designated as an MCC, a decrease of 837 
(14,528-13,691) codes designated as a CC, and an increase of 982 
(55,142-54,160) codes designated as a non-CC.
(2) Illustrations of Proposed Severity Level Changes
    As noted above, based on our comprehensive CC/MCC analysis as 
described previously in this section, we are proposing changes in the 
severity level designations for 1,492 ICD-10-CM diagnosis codes, and 
the specific proposed changes to severity level designations for those 
diagnosis codes are shown in Table 6P.1.c. associated with this 
proposed rule (which is available via the internet on the CMS website 
at: http://www.cms.hhs.gov/Medicare/Medicare-Fee-for-Service-Payment/AcuteInpatientPPS/index.html). Below we provide illustrative examples 
of certain categories of codes for which we are proposing changes to 
the severity level designations as a result of our comprehensive 
analysis. As described above, these proposals are based on review of 
the data as well as consideration of the clinical nature of each of the 
secondary diagnoses and the severity level of clinically similar 
diagnoses. The first set of codes, from the Neoplasms chapter, 
encompasses more than half of all proposed severity level changes. The 
additional examples are from a variety of body systems and conditions, 
and they are illustrative of both proposed increases and proposed 
decreases in severity level designation. We note that we are making 
available a

[[Page 19237]]

supplementary file containing the data describing the impact on 
resource use when reported as a secondary diagnosis for all 1,492 ICD-
10-CM diagnosis codes for which we are proposing a change in 
designation via the internet on the CMS website at: http://www.cms.hhs.gov/Medicare/Medicare-Fee-for-Service-Payment/AcuteInpatientPPS/index.html.
(a) Neoplasms Chapter Codes
    Of the total number of ICD-10-CM diagnosis codes for which we are 
proposing a change of severity level designation, 767 are from the 
Neoplasms chapter of the ICD-10-CM classification (C00-D49) and are 
currently designated as a CC. We note that the Neoplasms chapter 
contains a total of 1,661 ICD-10-CM diagnosis codes. In Version 36 of 
the MS-DRGs, none of the 1,661 neoplasm codes are designated as an MCC, 
767 are designated as a CC, and 894 are designated as a non-CC. For all 
767 codes currently designated as a CC, our clinical advisors 
recommended changing the severity level designation from CC to non-CC. 
The following table presents examples of some of the neoplasm codes for 
which we are proposing a severity level change to non-CC, and their 
impact on resource use when reported as a secondary diagnosis. As noted 
previously, the data analysis for the remainder of these neoplasm codes 
is included in the supplementary file that we are making available on 
the CMS website.

                                        Proposed Severity Level Changes for Neoplasm Codes as Secondary Diagnosis
--------------------------------------------------------------------------------------------------------------------------------------------------------
     ICD-10-CM diagnosis code          Cnt1        C1        Cnt2        C2        Cnt3        C3       Current CC  subclass      Proposed CC  subclass
--------------------------------------------------------------------------------------------------------------------------------------------------------
C20 (Malignant neoplasm of rectum)      2,960     1.0485      7,561     2.2169      6,492     3.0790  CC......................  Non-CC.
C22.0 (Liver cell carcinoma)......      1,672     1.2289      9,444     2.0638     12,503     3.0914  CC......................  Non-CC.
C25.0 (Malignant neoplasm of head       1,205     1.1357      3,834     2.1788      6,191     3.0229  CC......................  Non-CC.
 of pancreas).
C64.1 (Malignant neoplasm of right      1,512     1.2276      4,463     2.1600      4,593     3.1158  CC......................  Non-CC.
 kidney, except renal pelvis).
C64.2 (Malignant neoplasm of left       1,368     1.3407      4,517     2.1947      4,593     3.0947  CC......................  Non-CC.
 kidney, except renal pelvis).
C78.01 (Secondary malignant             4,149     1.0417     14,946     2.0888     20,324     3.0043  CC......................  Non-CC.
 neoplasm of right lung).
C78.02 (Secondary malignant             3,599     1.0078     13,456     2.0853     18,384     3.0024  CC......................  Non-CC.
 neoplasm of left lung).
C79.31 (Secondary malignant             7,164     1.1895     22,989     2.1330     41,387     2.9116  CC......................  Non-CC.
 neoplasm of brain).
C79.51 (Secondary malignant            26,095     1.3048     88,022     2.2020     99,670     3.0449  CC......................  Non-CC.
 neoplasm of bone).
C90.00 (Multiple myeloma not            9,947     1.1588     34,155     2.2144     33,830     3.1281  CC......................  Non-CC.
 having achieved remission).
--------------------------------------------------------------------------------------------------------------------------------------------------------

    As described in section II.F.15.b. of the preamble of this proposed 
rule, we examined the impact in resource use for three subsets of 
patients in order to evaluate the severity level designations for each 
secondary diagnosis. In the table above, the C1 values are generally 
close to 1, C2 values are generally close to 2, and C3 values are 
generally close to 3. As explained in section II.F.15.b. of the 
preamble of this proposed rule, these values suggest that when a 
neoplasm is reported as a secondary diagnosis, the resources involved 
in caring for a patient with this condition are more aligned with a 
non-CC severity level than a CC severity level. Our clinical advisors 
reviewed these data and believe the resources involved in caring for a 
patient with this condition are more aligned with a non-CC severity 
level. Our clinical advisors noted that when a neoplasm is reported as 
a secondary diagnosis, because it is not the condition that occasioned 
the patient's admission to the hospital, it does not significantly 
impact resource use. Our clinical advisors noted that if these patients 
are admitted for treatment of the neoplasm, the neoplasm is the 
principal diagnosis, and other complicating or comorbid conditions 
reported as secondary diagnoses would determine the appropriate 
severity level designation for each particular case. For example, if a 
patient is admitted for resection of malignant neoplasm of the right 
kidney, ICD-10-CM diagnosis code C64.1 (Malignant neoplasm of right 
kidney, except renal pelvis) is reported as the principal diagnosis, 
and any complicating conditions reported as secondary diagnoses during 
the hospital stay would determine the appropriate severity level 
designation for the case.
(b) Diseases of the Circulatory System Chapter Codes
    In the Diseases of the Circulatory System chapter of the ICD-10-CM 
diagnosis classification (I00-I99), based on the results of our 
comprehensive review, we are proposing to change the severity level 
designation for 13 ICD-10-CM diagnosis codes from categories I21 (Acute 
myocardial infarction) and I22 (Subsequent ST elevation (STEMI) and 
non-ST elevation (NSTEMI) myocardial infarction) from an MCC to a CC.
    The following table contains the ICD-10-CM diagnosis codes for 
which we are proposing a severity level change, and their impact on 
resource use when reported as a secondary diagnosis.

[[Page 19238]]



                                 Proposed Severity Level Changes for Myocardial Infarction Codes as Secondary Diagnosis
--------------------------------------------------------------------------------------------------------------------------------------------------------
     ICD-10-CM  diagnosis code         Cnt1        C1        Cnt2        C2        Cnt3        C3       Current CC  subclass      Proposed CC  subclass
--------------------------------------------------------------------------------------------------------------------------------------------------------
I21.01 (ST elevation (STEMI)                2     1.2010         17     2.9902         38     3.0195  MCC.....................  CC.
 myocardial infarction involving
 left main coronary artery).
I21.02 (ST elevation (STEMI)              149     0.9326        322     1.6565        754     3.3157  MCC.....................  CC.
 myocardial infarction involving
 left anterior descending coronary
 artery).
I21.09 (ST elevation (STEMI)              583     1.2201      1,288     2.2225      3,744     3.1094  MCC.....................  CC.
 myocardial infarction involving
 other coronary artery of anterior
 wall).
I21.11 (ST elevation (STEMI)              175     1.8486        326     2.0867        581     3.1141  MCC.....................  CC.
 myocardial infarction involving
 right coronary artery).
I21.19 (ST elevation (STEMI)              913     1.5054      1,940     2.2641      4,081     3.1996  MCC.....................  CC.
 myocardial infarction involving
 other coronary artery of inferior
 wall).
I21.21 (ST elevation (STEMI)               30     0.9445         56     2.4160        117     2.9965  MCC.....................  CC.
 myocardial infarction involving
 left circumflex coronary artery).
I21.29 (ST elevation (STEMI)              162     1.0143        417     2.2401      1,048     3.3341  MCC.....................  CC.
 myocardial infarction involving
 other sites).
I21.3 (ST elevation (STEMI)             1,271     1.6587      3,876     2.2420     10,168     3.2432  MCC.....................  CC.
 myocardial infarction of
 unspecified site).
I22.0 (Subsequent ST elevation             10     0.9199         74     1.2558        165     2.6794  MCC.....................  CC.
 (STEMI) myocardial infarction of
 anterior wall).
I22.1 (Subsequent ST elevation              4     0.0000         81     1.6022        143     3.3056  MCC.....................  CC.
 (STEMI) myocardial infarction of
 inferior wall).
I22.2 (Subsequent non-ST elevation         94     2.1034        352     2.1291      1,916     3.0157  MCC.....................  CC.
 (NSTEMI) myocardial infarction).
I22.8 (Subsequent ST elevation              5     2.2963         18     2.0589         53     3.1306  MCC.....................  CC.
 (STEMI) myocardial infarction of
 other sites).
I22.9 (Subsequent ST elevation             27     1.7140         87     1.8737        293     2.9627  MCC.....................  CC.
 (STEMI) myocardial infarction of
 unspecified site).
--------------------------------------------------------------------------------------------------------------------------------------------------------

    As shown in the table above, all of these myocardial infarction 
codes are currently assigned as MCCs. As explained earlier, values 
close to 2.0 in column C1 suggest that the condition is more like a CC 
than a non-CC but not as significant in resource usage as an MCC. The 
C1 values for the secondary diagnoses with the largest number of cases 
in this subset in the table above, ICD-10-CM codes I21.3 and I21.19, 
are closer to 2.0 than to 1.0, indicating that these secondary 
diagnoses are more aligned with a CC than either a non-CC or an MCC. 
Therefore, the data suggest that for patients for whom any of the 
myocardial infarction codes listed in the table above is reported as a 
secondary diagnosis, the resources involved in their care are not 
aligned with those of an MCC. Our clinical advisors reviewed these data 
and believe that the resources involved in caring for a patient with 
this condition are aligned with a CC. Patients with a secondary 
diagnosis of myocardial infarction may require additional diagnostic 
imaging, monitoring, medications, and additional interventions, thereby 
consuming resources that are consistent with CC status. Our clinical 
advisors noted that while, for certain codes, the number of cases shown 
in the data may not be sufficient to reliably indicate impact on 
resource use as a secondary diagnosis, these codes are clinically 
similar to other codes for which the data are sufficient to indicate 
impact on resource use. Because our clinical advisors believe that it 
is appropriate to ensure consistency across codes describing similar 
diagnoses, we are proposing to reassign the severity level for all of 
the codes in the table above from an MCC to a CC.
(c) Diseases of the Skin and Subcutaneous Tissue Chapter Codes
    In the Diseases of the Skin and Subcutaneous Tissue chapter of the 
ICD-10-CM diagnosis classification (L00-L99), based on the results of 
our comprehensive review, we are proposing a change to the severity 
level for 150 ICD-10-CM diagnosis codes describing pressure ulcers. 
Pressure ulcers, which are also known as pressure injuries, involve 
damage to the skin and soft tissue. They may result from prolonged 
pressure over a bony prominence or result from a medical device. The 
ICD-10-CM classification includes 150 diagnosis codes that describe 
pressure ulcers across various anatomical regions and across the 
various possible stages (stages 1 through 4, unspecified stage, and 
unstageable). These codes are listed in Table 6P.1.d. associated with 
this proposed rule (which is available via the internet on the CMS 
website at: http://www.cms.hhs.gov/Medicare/Medicare-Fee-for-Service-Payment/AcuteInpatientPPS/index.html). In the course of our 
comprehensive review of the CC/MCC lists, our clinical advisors 
reviewed the current categorization of pressure ulcers, which designate 
all stage 3 and 4 pressure ulcers as MCCs, while stage 1, stage 2, 
unspecified stage,

[[Page 19239]]

and unstageable pressure ulcers are currently designated as non-CCs.
    Our clinical advisors reviewed data on the relative contribution to 
the overall cost of hospital care for all stages of pressure ulcers 
coded as secondary diagnoses, and found (1) that there was little 
difference in the cost contribution regardless of stage, and (2) the 
cost contributions (cost weights) of all stages supported a designation 
of CC rather than MCC (for stage 3 and 4 ulcers), and CC rather than 
non-CC (for stages 1, 2, unspecified, and unstageable). Our clinical 
advisors noted that the apparent similar contribution of all pressure 
ulcer stages can be explained by the fact that pressure ulcers occur in 
patients with serious underlying illness, such as stroke, cancer, 
dementia, and end-stage cardiac or pulmonary disease that can result in 
multiple factors (frailty, immobility, paralysis, malnutrition, and 
general debility) that predispose them to pressure ulcers. It is the 
serious underlying illness and debilitated state that causes the 
pressure ulcer that is the primary driver of resource use. Although a 
pressure ulcer at any stage requires care and preventive measures that 
make additional contributions to the overall cost of care, our clinical 
advisors believe that the fact that the ulcer developed in the first 
place is more important than the stage of the ulcer itself in 
determining the impact on the costs of hospitalization. The presence of 
a pressure ulcer may indicate an increase in resource use, but that 
increase is similar regardless of the stage of the ulcer.
    The following table contains illustrations of pressure ulcer codes 
and their impact on resource use when reported as a secondary 
diagnosis. We selected secondary diagnosis codes describing pressure 
ulcer of the sacrum as examples because they account for almost half of 
all instances of pressure ulcers reported as secondary diagnoses, but 
note that the data for the codes describing pressure ulcer of other 
body parts generally show a similar pattern. As noted previously, the 
data analysis for the remainder of the pressure ulcer codes for which 
we are proposing a change in severity level designation is included in 
the supplementary file that we are making available on the CMS website.

                                     Proposed Severity Level Changes for Pressure Ulcer Codes as Secondary Diagnosis
--------------------------------------------------------------------------------------------------------------------------------------------------------
     ICD-10-CM  diagnosis code         Cnt1        C1        Cnt2        C2        Cnt3        C3       Current CC  subclass      Proposed CC  subclass
--------------------------------------------------------------------------------------------------------------------------------------------------------
L89.150 (Pressure ulcer of sacral         605      2.003      6,247      2.560     24,047      3.254  Non-CC..................  CC.
 region, unstageable).
L89.151 (Pressure ulcer of sacral       2,374      1.691     16,688      2.404     36,428      3.182  Non-CC..................  CC.
 region, stage 1).
L89.152 (Pressure ulcer of sacral       4,238      1.737     35,608      2.497     95,832      3.274  Non-CC..................  CC.
 region, stage 2).
L89.153 (Pressure ulcer of sacral       1,722      1.832     15,266      2.522     48,414      3.289  MCC.....................  CC.
 region, stage 3).
L89.154 (Pressure ulcer of sacral       1,237      1.755     14,306      2.438     56,619      3.196  MCC.....................  CC.
 region, stage 4).
L89.159 (Pressure ulcer of sacral       1,453      1.387     12,466      2.311     35,020      3.176  Non-CC..................  CC.
 region, unspecified stage).
--------------------------------------------------------------------------------------------------------------------------------------------------------

    As explained previously, a value in column C1 that is close to 2.0 
suggests the condition is more like a CC than a non-CC but not as 
significant in resource usage as an MCC. Given that the values in 
column C1 in the table above are closer to 2.0 than to 1.0, the data 
suggest that when pressure ulcers of the sacral region are reported as 
a secondary diagnosis, the resources involved in caring for these 
patients are more consistent with a CC than either a non-CC or an MCC. 
Our clinical advisors reviewed these data and believe that it is 
appropriate to ensure consistency across codes involving similar 
diagnoses. Therefore, we are proposing to designate as CCs both the 50 
ICD-10-CM diagnosis codes that are currently designated as MCCs and the 
100 ICD-10-CM diagnosis codes currently designated as non-CCs.
    We note that, under the Hospital-Acquired Condition (HAC) payment 
provision established by section 5001(c) of the Deficit Reduction Act 
(DRA) of 2005, hospitals no longer receive additional payment for cases 
in which one of the selected conditions occurred but was not present on 
admission (POA). That is, the case is paid as though the condition were 
not present. The HAC-POA payment provision is applicable for secondary 
diagnosis code reporting only, as the selected conditions are 
designated as a CC or an MCC when reported as a secondary diagnosis. 
For the DRA HAC-POA payment provision, a payment adjustment is only 
applicable if there are no other CC/MCC conditions reported on the 
claim. Currently, there are 14 HAC categories subject to the HAC-POA 
payment provision, one of which is pressure ulcers. The pressure ulcer 
HAC category (HAC 04) specifically includes diagnosis codes describing 
a stage 3 or stage 4 pressure ulcer because they are designated as an 
MCC, as noted earlier in this section. If the proposed severity level 
designations for the pressure ulcer diagnosis codes are finalized, the 
100 ICD-10-CM diagnosis codes describing pressure ulcers currently 
designated as non-CCs would be subject to the HAC-POA payment provision 
as CCs when reported as a secondary diagnosis and not POA, effective 
beginning in FY 2020. The diagnosis codes describing a stage 3 or stage 
4 pressure ulcer would continue to be subject to the HAC-POA payment 
provision as CCs.
    In addition, consistent with the proposed changes to the severity 
level designation of the pressure ulcer codes, we are proposing to 
revise the title of the HAC 04 category from ``Pressure Ulcer--Stages 
III & IV'' to ``Pressure Ulcers''. We refer readers to the website at: 
https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/HospitalAcqCond/index.html for additional information regarding the 
HAC-POA payment provision under the DRA.
(d) Diseases of the Genitourinary System Chapter Codes
    In the Diseases of the Genitourinary System chapter of the ICD-10-
CM diagnosis classification (N00-N99), based on the results of our 
comprehensive analysis, we are proposing to change the severity level 
designation for eight ICD-10-CM diagnosis codes. For these eight

[[Page 19240]]

diagnosis codes, based on their clinical judgment and for the reasons 
described below, our clinical advisors recommended that we increase the 
severity level designation from a CC to an MCC for one code, and from a 
non-CC to a CC for seven codes. The following table contains the 
Diseases of the Genitourinary System chapter codes that describe 
conditions for which we are proposing a severity level designation 
change, and their impact on resource use when reported as a secondary 
diagnosis.

                                     Proposed Severity Level Changes for Genitourinary Codes as Secondary Diagnosis
--------------------------------------------------------------------------------------------------------------------------------------------------------
     ICD-10-CM diagnosis code          Cnt1        C1        Cnt2        C2        Cnt3        C3       Current CC  subclass      Proposed CC  subclass
--------------------------------------------------------------------------------------------------------------------------------------------------------
N10 (Acute pyelonephritis)........      5,385     0.9639     20,476     1.9444     26,929     3.0413  Non-CC..................  CC.
N18.4 (Chronic kidney disease,         36,940     1.0919    219,482     2.0679    319,849     3.0840  Non-CC..................  CC.
 stage 4 (severe)).
N18.5 (Chronic kidney disease,          1,158     1.0303     30,851     2.0841     34,733     3.1508  Non-CC..................  CC.
 stage 5).
N18.6 (End stage renal disease)...     26,276     1.5755    578,587     2.3010    492,710     3.2761  CC......................  MCC.
N30.00 (Acute cystitis without         18,597     1.0576     53,820     1.9409     73,996     2.8976  Non-CC..................  CC.
 hematuria).
N30.01 (Acute cystitis with             4,872     0.9503     16,949     1.8514     24,422     2.8070  Non-CC..................  CC.
 hematuria).
N41.0 (Acute prostatitis).........        845     0.9519      3,031     1.8163      2,135     3.0450  Non-CC..................  CC.
N76.4 (Abscess of vulva)..........        368     0.8284      1,276     2.0906      1,049     3.1341  Non-CC..................  CC.
--------------------------------------------------------------------------------------------------------------------------------------------------------

    The C1, C2, and C3 values in the table above are generally close to 
1.0, 2.0, and 3.0, respectively, which would indicate that these 
conditions are more aligned with a non-CC than with either a CC or an 
MCC. However, our clinical advisors believe that patients with a 
secondary diagnosis of one of the genitourinary conditions in the table 
above may consume additional resources, including but not limited to 
monitoring for hypertension, diagnostic tests, and balancing 
electrolytes. Patients with end-stage renal disease (ICD-10-CM code 
N18.6) would typically require dialysis in addition to these resources, 
which our clinical advisors believe is more aligned with an MCC. 
Therefore, we are proposing to change the severity level designations 
for the eight codes as shown in the table above.
e. Injury, Poisoning and Certain Other Consequences of External Causes 
Chapter Codes
    In subcategory S32.5 (Fracture of pubis) of the ICD-10-CM diagnosis 
classification, based on our comprehensive analysis, we are proposing 
to change the severity level designation from CC to non-CC for 19 ICD-
10-CM diagnosis codes that specify fractures of the pubic bone. The 
following table contains the diagnosis codes for which we are proposing 
a severity level designation change, and their impact on resource use 
when reported as a secondary diagnosis.

                                      Proposed Severity Level Changes, Pubis Fracture Codes as Secondary Diagnosis
--------------------------------------------------------------------------------------------------------------------------------------------------------
     ICD-10-CM diagnosis code          Cnt1        C1        Cnt2        C2        Cnt3        C3       Current CC  subclass      Proposed CC  subclass
--------------------------------------------------------------------------------------------------------------------------------------------------------
S32.501A (Unspecified fracture of         393     1.0234      1,171     2.1215        847     3.0423  CC......................  Non-CC.
 right pubis, initial encounter
 for closed fracture).
S32.501K (Unspecified fracture of           1     1.5125         12     2.1144          2     1.8454  CC......................  Non-CC.
 right pubis, subsequent encounter
 for fracture with nonunion).
S32.502A (Unspecified fracture of         398     1.3072      1,152     2.0593        914     3.0028  CC......................  Non-CC.
 left pubis, initial encounter for
 closed fracture).
S32.502K (Unspecified fracture of           3     0.0000          7     2.8723          1     0.7401  CC......................  Non-CC.
 left pubis, subsequent encounter
 for fracture with nonunion).
S32.509A (Unspecified fracture of          49     1.1075        156     2.1066        154     3.1704  CC......................  Non-CC.
 unspecified pubis, initial
 encounter for closed fracture).
S32.509K (Unspecified fracture of           0     0.0000          1     3.4022          1     2.1306  CC......................  Non-CC.
 unspecified pubis, subsequent
 encounter for fracture with
 nonunion).
S32.511A (Fracture of superior rim        743     1.1812      2,132     2.1519      1,504     2.8763  CC......................  Non-CC.
 of right pubis, initial encounter
 for closed fracture).
S32.511K (Fracture of superior rim          2     2.0354          5     0.0000          4     2.3425  CC......................  Non-CC.
 of right pubis, subsequent
 encounter for fracture with
 nonunion).

[[Page 19241]]

 
S32.512A (Fracture of superior rim        760     1.5738      2,098     2.0828      1,590     2.9020  CC......................  Non-CC.
 of left pubis, initial encounter
 for closed fracture).
S32.512K (Fracture of superior rim          3     2.1915          3     2.4812          8     4.0000  CC......................  Non-CC.
 of left pubis, subsequent
 encounter for fracture with
 nonunion).
S32.519A (Fracture of superior rim         15     2.6829         53     1.5795         35     2.9052  CC......................  Non-CC.
 of unspecified pubis, initial
 encounter for closed fracture).
S32.519K (Fracture of superior rim          0      0.000          0      0.000          0      0.000  CC......................  Non-CC.
 of unspecified pubis, subsequent
 encounter for fracture with
 nonunion).
S32.591A (Other specified fracture      2,427     1.2524      6,513     2.0970      4,397     2.9930  CC......................  Non-CC.
 of right pubis, initial encounter
 for closed fracture).
S32.591K (Other specified fracture          7     2.7706         15     1.9772          5     0.8969  CC......................  Non-CC.
 of right pubis, subsequent
 encounter for fracture with
 nonunion).
S32.592A (Other specified fracture      2,424     1.3691      6,604     2.0921      4,922     2.9428  CC......................  Non-CC.
 of left pubis, initial encounter
 for closed fracture).
S32.592K (Other specified fracture          4     0.6970         24     2.5574         10     3.0015  CC......................  Non-CC.
 of left pubis, subsequent
 encounter for fracture with
 nonunion).
S32.599A (Other specified fracture        151     1.6748        457     2.0518        394     3.1844  CC......................  Non-CC.
 of unspecified pubis, initial
 encounter for closed fracture).
S32.599K (Other specified fracture          1     0.0000          0     0.0000          3     1.4709  CC......................  Non-CC.
 of unspecified pubis, subsequent
 encounter for fracture with
 nonunion).
--------------------------------------------------------------------------------------------------------------------------------------------------------

    The C1, C2, and C3 values in the table above are generally close to 
1.0, 2.0, and 3.0, respectively, particularly for those codes for which 
the highest number of cases were reported. This indicates that these 
conditions are more aligned with a non-CC than with either a CC or an 
MCC. Our clinical advisors reviewed these data, particularly with 
respect to ICD-10-CM diagnosis codes S32.591A and S32.592A which 
account for the majority of cases in this group, and believe the 
resources involved in caring for a patient with these conditions are 
more aligned with a non-CC. Our clinical advisors noted that, similar 
to the proposed severity level designation changes in the Neoplasms 
chapter of the ICD-10-CM diagnosis classification discussed above, if 
patients are admitted for treatment of an acute or nonunion fracture of 
the pubic bone, the fracture is the principal diagnosis, and other 
complicating or comorbid conditions reported as secondary diagnoses 
would determine the appropriate severity level for each particular 
case. For example, if a patient is admitted for surgical treatment of 
the nonunion of a right pubic fracture at the superior rim, ICD-10-CM 
diagnosis code S32.511K (Fracture of superior rim of right pubis, 
subsequent encounter for fracture with nonunion) is reported as the 
principal diagnosis. Because our clinical advisors believe that it is 
appropriate to ensure consistency across codes involving similar 
diagnoses, we are proposing to reassign the severity level for all of 
the codes in the table above from a CC to a non-CC.
    In category S72 (Fracture of femur) of the ICD-10-CM 
classification, based on our comprehensive analysis, we are proposing 
to change the severity level designation from MCC to CC for 35 ICD-10-
CM diagnosis codes specifying fractures of the hip. The following table 
contains the Injury, Poisoning and Certain Other Consequences of 
External Causes chapter codes for which we are proposing a severity 
level change, and their impact on resource use when reported as a 
secondary diagnosis.

                                       Proposed Severity Level Changes, Hip Fracture Codes as Secondary Diagnosis
--------------------------------------------------------------------------------------------------------------------------------------------------------
     ICD-10-CM diagnosis code          Cnt1        C1        Cnt2        C2        Cnt3        C3       Current CC  subclass      Proposed CC  subclass
--------------------------------------------------------------------------------------------------------------------------------------------------------
S72.011A (Unspecified                     145     2.1400        464     2.3419        700     2.9623  MCC.....................  CC.
 intracapsular fracture of right
 femur, initial encounter for
 closed fracture).
S72.012A (Unspecified                     155     2.0099        455     2.2738        754     3.0423  MCC.....................  CC.
 intracapsular fracture of left
 femur, initial encounter for
 closed fracture).

[[Page 19242]]

 
S72.019A (Unspecified                       1     0.9364          4     1.0008         10     2.7267  MCC.....................  CC.
 intracapsular fracture of
 unspecified femur, initial
 encounter for closed fracture).
S72.111A (Displaced fracture of           266     1.5110        605     2.2983        442     3.1874  MCC.....................  CC.
 greater trochanter of right
 femur, initial encounter for
 closed fracture).
S72.112A (Displaced fracture of           249     1.7779        573     2.4626        418     3.0108  MCC.....................  CC.
 greater trochanter of left femur,
 initial encounter for closed
 fracture).
S72.113A (Displaced fracture of            11     1.7739         21     2.9650         23     3.5762  MCC.....................  CC.
 greater trochanter of unspecified
 femur, initial encounter for
 closed fracture).
S72.114A (Nondisplaced fracture of        112     0.8826        339     2.1640        178     3.1028  MCC.....................  CC.
 greater trochanter of right
 femur, initial encounter for
 closed fracture).
S72.115A (Nondisplaced fracture of        118     1.3960        288     2.0607        202     2.8640  MCC.....................  CC.
 greater trochanter of left femur,
 initial encounter for closed
 fracture).
S72.116A (Nondisplaced fracture of          3     0.9472          8     1.3030          3     3.4270  MCC.....................  CC.
 greater trochanter of unspecified
 femur, initial encounter for
 closed fracture).
S72.121A (Displaced fracture of            22     2.0288         74     3.1110         49     3.1174  MCC.....................  CC.
 lesser trochanter of right femur,
 initial encounter for closed
 fracture).
S72.122A (Displaced fracture of            23     1.1648         75     2.9379         40     2.4430  MCC.....................  CC.
 lesser trochanter of left femur,
 initial encounter for closed
 fracture).
S72.123A (Displaced fracture of             0     0.0000          2     0.0000          6     2.2881  MCC.....................  CC.
 lesser trochanter of unspecified
 femur, initial encounter for
 closed fracture).
S72.124A (Nondisplaced fracture of          4     0.9792         19     2.4244          8     2.7792  MCC.....................  CC.
 lesser trochanter of right femur,
 initial encounter for closed
 fracture).
S72.125A (Nondisplaced fracture of          5     0.6759         13     1.2700          7     3.1292  MCC.....................  CC.
 lesser trochanter of left femur,
 initial encounter for closed
 fracture).
S72.126A (Nondisplaced fracture of          0     0.0000          0     0.0000          1     1.1159  MCC.....................  CC.
 lesser trochanter of unspecified
 femur, initial encounter for
 closed fracture).
S72.131A (Displaced apophyseal              1     3.4327          0     0.0000          2     4.0000  MCC.....................  CC.
 fracture of right femur, initial
 encounter for closed fracture).
S72.132A (Displaced apophyseal              0     0.0000          1     2.6423          0     0.0000  MCC.....................  CC.
 fracture of left femur, initial
 encounter for closed fracture).
S72.134A (Nondisplaced apophyseal           0      0.000          1      3.501          0      0.000  MCC.....................  CC.
 fracture of right femur, initial
 encounter for closed fracture).
S72.135A (Nondisplaced apophyseal           0      0.000          0      0.000          0      0.000  MCC.....................  CC.
 fracture of left femur, initial
 encounter for closed fracture).
S72.136A (Nondisplaced apophyseal           0      0.000          0      0.000          0      0.000  MCC.....................  CC.
 fracture of unspecified femur,
 initial encounter for closed
 fracture).

[[Page 19243]]

 
S72.141A (Displaced                       289     2.2607        894     2.6329      1,293     3.1692  MCC.....................  CC.
 intertrochanteric fracture of
 right femur, initial encounter
 for closed fracture).
S72.142A (Displaced                       347     2.2587        972     2.5641      1,405     3.1003  MCC.....................  CC.
 intertrochanteric fracture of
 left femur, initial encounter for
 closed fracture).
S72.143A (Displaced                        10     2.3446         21     1.0169         35     3.3080  MCC.....................  CC.
 intertrochanteric fracture of
 unspecified femur, initial
 encounter for closed fracture).
S72.144A (Nondisplaced                     44     1.7331        149     2.4637        168     3.1302  MCC.....................  CC.
 intertrochanteric fracture of
 right femur, initial encounter
 for closed fracture).
S72.145A (Nondisplaced                     39     1.9170        112     2.8435        170     3.2612  MCC.....................  CC.
 intertrochanteric fracture of
 left femur, initial encounter for
 closed fracture).
S72.146A (Nondisplaced                      0     0.0000          9     1.2250          2     0.0000  MCC.....................  CC.
 intertrochanteric fracture of
 unspecified femur, initial
 encounter for closed fracture).
S72.21XA (Displaced                        57     1.7697        159     2.2460        205     3.1614  MCC.....................  CC.
 subtrochanteric fracture of right
 femur, initial encounter for
 closed fracture).
S72.22XA (Displaced                        70     2.3685        160     2.6079        184     3.2178  MCC.....................  CC.
 subtrochanteric fracture of left
 femur, initial encounter for
 closed fracture).
S72.23XA (Displaced                         0     0.0000          9     3.4708          6     3.3401  MCC.....................  CC.
 subtrochanteric fracture of
 unspecified femur, initial
 encounter for closed fracture).
S72.24XA (Nondisplaced                     12     0.5442         22     2.7275         11     3.6028  MCC.....................  CC.
 subtrochanteric fracture of right
 femur, initial encounter for
 closed fracture).
S72.25XA (Nondisplaced                     13     1.7115         25     2.1005         17     3.1686  MCC.....................  CC.
 subtrochanteric fracture of left
 femur, initial encounter for
 closed fracture).
S72.26XA (Nondisplaced                      0     0.0000          1     2.0474          0     0.0000  MCC.....................  CC.
 subtrochanteric fracture of
 unspecified femur, initial
 encounter for closed fracture).
S72.301A (Unspecified fracture of          61     2.3462        156     3.0491        159     3.5567  MCC.....................  CC.
 shaft of right femur, initial
 encounter for closed fracture).
S72.302A (Unspecified fracture of          71     2.6314        186     2.4838        157     3.4436  MCC.....................  CC.
 shaft of left femur, initial
 encounter for closed fracture).
--------------------------------------------------------------------------------------------------------------------------------------------------------

    As shown in the table above, all of these secondary diagnoses are 
currently designated as MCCs. The C2 values of the codes most 
frequently reported, ICD-10-CM codes S72.142A and S72.141A, are closer 
to 3.0 than 2.0, which indicates that they are more clinically aligned 
with a CC than an MCC. Therefore, the data suggest that when fracture 
of the hip codes are reported as a secondary diagnosis, the resources 
involved in caring for patients with these conditions are more aligned 
with a CC than an MCC. Our clinical advisors reviewed these data and 
believe the resources involved in caring for patients with these 
conditions are more aligned with a CC. While we note that there is 
little to no data for some of these ICD-10-CM codes as secondary 
diagnoses, there is sufficient data for clinically similar secondary 
diagnoses. Therefore, because our clinical advisors believe that it is 
appropriate to ensure consistency across codes involving similar 
diagnoses, we are proposing to reassign the severity level for all of 
the codes in the table above from an MCC to a CC.
(f) Factors Influencing Health Status and Contact With Health Services
    The last chapter of the ICD-10-CM classification specifies other 
factors that influence a patient's health status or necessitate contact 
with health care

[[Page 19244]]

providers (Z00-Z99). Of these ICD-10-CM codes, based on our 
comprehensive review, we are proposing to change the severity level 
designation from non-CC to CC for four codes specifying anti-microbial 
drug resistance and one code specifying homelessness. Based on this 
same review, we also are proposing to change the severity level 
designation from CC to non-CC for 3 ICD-10-CM codes specifying adult 
body mass index (BMI) ranges and 13 ICD-10-CM codes indicating that the 
patient has previously undergone an organ transplant or cardiac device 
implantation with no current complications (the code indicates status 
only).
    The following table contains the five codes for which we are 
proposing a severity level change from non-CC to CC and their impact on 
resource use when reported as a secondary diagnosis.

                                       Proposed Severity Level Changes for Z Chapter Codes as Secondary Diagnosis
--------------------------------------------------------------------------------------------------------------------------------------------------------
     ICD-10-CM diagnosis code          Cnt1        C1        Cnt2        C2        Cnt3        C3        Current CC subclass      Proposed CC subclass
--------------------------------------------------------------------------------------------------------------------------------------------------------
Z16.12 (Extended spectrum beta          3,082     2.1134     19,692     2.5995     25,544     3.1752  Non-CC..................  CC.
 lactamase (ESBL) resistance).
Z16.21 (Resistance to vancomycin).        692     2.1507      6,733     2.8659     11,672     3.3365  Non-CC..................  CC.
Z16.24 (Resistance to multiple          2,970     1.5821     16,097     2.4086     20,738     3.1174  Non-CC..................  CC.
 antibiotics).
Z16.39 (Resistance to other               448     1.2003      2,326     2.2555      2,494     3.1127  Non-CC..................  CC.
 specified antimicrobial drug).
Z59.0 (Homelessness)..............     14,927     1.5964     41,328     2.3012     22,101     3.1256  Non-CC..................  CC.
--------------------------------------------------------------------------------------------------------------------------------------------------------

    As indicated above, a value close to 2.0 in column C1 suggests that 
the secondary diagnosis is more aligned with a CC than a non-CC. 
Because the C1 values in the table above are generally close to 2, the 
data suggest that when these five Z chapter diagnosis codes are 
reported as a secondary diagnosis, the resources involved in caring for 
a patient with other factors such as homelessness support increasing 
the severity level from a non-CC to a CC. Our clinical advisors 
reviewed these data and believe the resources involved in caring for 
patients with these other reported factors are more aligned with a CC.
    While we note that ICD-10-CM diagnosis code Z16.39 does not follow 
this pattern, our clinical advisors believe that this code is 
clinically similar to the other diagnoses in the table above describing 
anti-microbial drug resistance. Therefore, because our clinical 
advisors believe that it is appropriate to ensure consistency across 
codes involving similar diagnoses, we are proposing to reassign the 
severity level for all four of the codes specifying anti-microbial drug 
resistance in the table above from a non-CC to a CC.
    The following table contains the 14 BMI and transplant/cardiac 
device status codes for which we are proposing a severity level 
designation change from CC to non-CC, and their impact on resource use 
when reported as a secondary diagnosis.

                   Proposed Severity Level Changes for Z Chapter BMI and Transplant/Cardiac Device Status Codes as Secondary Diagnosis
--------------------------------------------------------------------------------------------------------------------------------------------------------
     ICD-10-CM diagnosis code          Cnt1        C1        Cnt2        C2        Cnt3        C3        Current CC subclass      Proposed CC subclass
--------------------------------------------------------------------------------------------------------------------------------------------------------
Z68.1 (Body mass index (BMI) 19.9      18,983     1.1170    244,156     2.2082    350,731     3.0733  CC......................  Non-CC.
 or less, adult).
Z68.41 (Body mass index (BMI) 40.0-   139,420     1.1139    209,300     2.0752    213,929     3.0814  CC......................  Non-CC.
 44.9, adult).
Z68.42 (Body mass index (BMI) 45.0-    60,408     1.1643    102,897     2.0783    109,928     3.0867  CC......................  Non-CC.
 49.9, adult).
Z94.0 (Kidney transplant status)..     18,649     1.0277     70,484     2.0573     45,382     3.1032  CC......................  Non-CC.
Z94.1 (Heart transplant status)...      2,311     1.0649      8,138     2.2471      5,037     3.2653  CC......................  Non-CC.
Z94.2 (Lung transplant status)....      1,461     1.0886      5,032     2.1898      3,466     3.1285  CC......................  Non-CC.
Z94.3 (Heart and lungs transplant          20     0.8287         88     3.0647         59     3.1675  CC......................  Non-CC.
 status).
Z94.4 (Liver transplant status)...      6,050     0.9811     17,556     2.0323     12,970     3.1688  CC......................  Non-CC.
Z94.81 (Bone marrow transplant          1,655     0.9778      5,447     2.0919      5,150     3.1918  CC......................  Non-CC.
 status).
Z94.82 (Intestine transplant              119     1.5661        351     2.1844        230     3.2081  CC......................  Non-CC.
 status).
Z94.83 (Pancreas transplant             1,789     1.2032      7,788     2.0739      4,536     3.1381  CC......................  Non-CC.
 status).
Z94.84 (Stem cells transplant           3,083     1.1451     10,412     2.3041      8,835     3.2932  CC......................  Non-CC.
 status).
Z95.811 (Presence of heart assist       1,053     1.6453      7,373     2.3089      5,974     3.1198  CC......................  Non-CC.
 device).
Z95.812 (Presence of fully                 45     2.0467        132     2.5603        142     2.4139  CC......................  Non-CC.
 implantable artificial heart).
--------------------------------------------------------------------------------------------------------------------------------------------------------


[[Page 19245]]

    The C1, C2, and C3 values in the table above are generally close to 
1.0, 2.0, and 3.0, respectively. This indicates that these conditions 
are more aligned with a non-CC than with either a CC or an MCC. 
Therefore, the data suggest that when these BMI and transplant/cardiac 
device status codes are reported as a secondary diagnosis, the 
resources involved in caring for patients with these conditions 
indicating health status are not aligned with those of a CC. Our 
clinical advisors reviewed these data and believe the resources 
involved in caring for patients with these conditions indicating health 
status are more aligned with a non-CC. Our clinical advisors noted 
that, in the absence of a diagnosis that represents a complication of 
the patient's current status, the presence of a BMI within a stated 
range or the fact that a patient has previously undergone a transplant 
or cardiac device implant is not by itself a clinical indication of 
increased severity of illness. Therefore, we are proposing to reassign 
the severity level for all of the codes in the table above from a CC to 
a non-CC.
(3) Results of Impact Analysis
    Using claims data from the September 2018 update of the FY 2018 
MedPAR file, we employed the following method to determine the impact 
of changing severity level designation for the 1,492 ICD-10-CM 
diagnosis codes. Edits and cost estimations used for relative weight 
calculations were applied, resulting in 8,908,404 IPPS claims analyzed 
for this impact evaluation of our proposed changes to severity levels. 
We refer readers to section II.G. of the preamble of this proposed rule 
for further information regarding the methodology for calculation of 
the proposed relative weights.
    First, we analyzed the 8,908,404 IPPS claims using the Version 36 
ICD-10 MS-DRG GROUPER to determine the current distribution of severity 
level designation. We identified 3,648,331 cases (41.0 percent) 
reporting one or more secondary diagnosis codes assigned to the MCC 
severity level, 3,612,600 cases (40.5 percent) reporting one or more 
secondary diagnosis codes assigned to the CC severity level, and 
1,647,473 cases (18.5 percent) not reporting a secondary diagnosis code 
assigned to the MCC or CC severity level.
    Next, we reprocessed the 8,908,404 claims using the proposed change 
in severity level designation for the 1,492 ICD-10-CM diagnosis codes 
to determine the impact on the distribution of severity level 
designation. We identified 3,236,493 cases (36.3 percent) reporting one 
or more secondary diagnosis codes that would be assigned to the MCC 
severity level, 3,589,677 cases (40.3 percent) reporting one or more 
secondary diagnosis codes that would be assigned to the CC severity 
level, and 2,082,234 cases (23.4 percent) not reporting a secondary 
diagnosis code that would be assigned to the MCC or CC severity level.
    Below we provide a summary of the steps followed for the analysis 
performed.
    Step 1.--Analyzed 8,908,404 claims to determine the current 
distribution of severity level designation.

  Severity Level Distribution Before Proposed Changes--8,908,404 Claims
                                Analyzed
------------------------------------------------------------------------
 
------------------------------------------------------------------------
Number of cases reporting one or more                  3,648,331 (41.0%)
 secondary diagnosis codes assigned to the
 MCC severity level.......................
Number of cases reporting one or more                  3,612,600 (40.5%)
 secondary diagnosis codes assigned to the
 CC severity level........................
Number of cases reporting no secondary                 1,647,473 (18.5%)
 diagnosis codes assigned to the MCC or CC
 severity level...........................
------------------------------------------------------------------------

    Step 2.--Made proposed severity level changes to 1,492 ICD-10-CM 
codes.

 Step 2--Made proposed severity level changes to 1,492 ICD-10-CM codes.
------------------------------------------------------------------------
                                     Proposed version 37     Number of
 Current version 36 severity level     severity level          codes
------------------------------------------------------------------------
Non-CC............................  CC..................             183
CC................................  Non-CC..............           1,148
CC................................  MCC.................               8
MCC...............................  Non-CC..............              17
MCC...............................  CC..................             136
                                                         ---------------
    Total.........................  ....................           1,492
------------------------------------------------------------------------

    Step 3.--Reprocessed 8,908,404 claims to determine severity level 
distribution after changes.

  Severity Level Distribution after Proposed Changes--8,908,404 Claims
                                Analyzed
------------------------------------------------------------------------
 
------------------------------------------------------------------------
Number of cases reporting one or more                  3,236,493 (36.3%)
 secondary diagnosis codes assigned to the
 MCC severity level.......................
Number of cases reporting one or more                  3,589,677 (40.3%)
 secondary diagnosis codes assigned to the
 CC severity level........................
Number of cases reporting no secondary                 2,082,234 (23.4%)
 diagnosis codes assigned to the MCC or CC
 severity level...........................
------------------------------------------------------------------------

    The overall statistics by CC subgroup for the proposed Version 37 
MS-DRGs are contained in the table below. Cases in the MCC subgroup 
have average costs that are 62 percent higher than the average costs 
for cases in the CC subgroup. The CC subgroup with the largest number 
of cases is the CC subgroup with 40.3 percent of the cases.

[[Page 19246]]



                                     Overall Statistics for Proposed MS-DRGs
----------------------------------------------------------------------------------------------------------------
                                                                     Number of
                           CC subgroup                                 cases          Percent      Average costs
----------------------------------------------------------------------------------------------------------------
Major...........................................................       3,236,493            36.3         $16,890
CC..............................................................       3,589,677            40.3          10,518
Non-CC..........................................................       2,082,234            23.4          10,166
----------------------------------------------------------------------------------------------------------------

    The distribution of cases across the different types of CC 
subgroups in the proposed Version 37 MS-DRGs is contained in the table 
below. The table shows that 91 percent of the cases would be assigned 
to base MS-DRGs with three CC subgroups, and only 9 percent of the 
cases would be assigned to base MS-DRGs with no CC subgroups.

Distribution of Patient by Type of CC Subgroup in Proposed Version 37 MS-
                                  DRGs
------------------------------------------------------------------------
               CC subgroup                    Number          Percent
------------------------------------------------------------------------
None....................................              68               9
(MCC and CC), Non-CC....................              84              11
MCC, (CC and Non-CC)....................             132              17
MCC, CC, and Non-CC.....................             477              63
                                         -------------------------------
    Total...............................             761  ..............
------------------------------------------------------------------------

    We performed regression analysis to compare the variance in the MS-
DRGs with and without the proposed severity level designation changes 
and thereby the impact of payment to cost ratios. The results of the 
regression analysis showed a slight decrease in variance with the 
proposed severity level designation changes, showing an R-squared of 
35.9 percent after making the severity level changes, compared with an 
R-squared of 35.6 percent in the current Version 36 ICD-10 MS-DRG 
GROUPER. This indicates that the proposed severity level changes 
increase the explanatory power of the GROUPER in capturing differences 
in expected cost between the MS-DRGs and thus would improve the overall 
accuracy of the IPPS payment system.
    After considering the results of our data analysis, the clinical 
judgment of our clinical advisors, and the overall aggregate impact of 
these changes, we are proposing a change to the severity level 
designations for 1,492 ICD-10-CM diagnosis codes as shown in Table 
6P.1c. associated with this proposed rule (which is available via the 
internet on the CMS website at: http://www.cms.hhs.gov/Medicare/Medicare-Fee-for-Service-Payment/AcuteInpatientPPS/index.html.)
d. Requested Changes to Severity Levels
(1) Acute Right Heart Failure
    We received a request to change the severity level for ICD-10-CM 
diagnosis codes I50.811 (Acute right heart failure) and I50.813 (Acute 
on chronic right heart failure) from a non-CC to an MCC. The requestor 
stated that similar diagnosis codes in the classification are 
designated as an MCC. We used the approach outlined earlier in this 
section to evaluate this request. The following table shows the claims 
data that were used to evaluate this request:

 
--------------------------------------------------------------------------------------------------------------------------------------------------------
     ICD-10-CM diagnosis code          Cnt1        C1        Cnt2        C2        Cnt3        C3       Current CC  subclass     Requested CC  subclass
--------------------------------------------------------------------------------------------------------------------------------------------------------
I50.811 Acute right heart failure.         92     1.3290        470     2.5375      1,632     3.1907  non-CC..................  MCC.
I50.813 Acute on chronic right            183     1.4412      1,189     2.6036      3,099     3.2870  non-CC..................  MCC.
 heart failure.
--------------------------------------------------------------------------------------------------------------------------------------------------------

    For ICD-10-CM diagnosis code I50.811, the data suggest that the 
resources involved in caring for a patient with this condition are 33 
percent greater than expected when the patient has either no other 
secondary diagnosis present, or all the other secondary diagnoses 
present are non-CCs. The resources are 54 percent greater than expected 
when reported in conjunction with another secondary diagnosis that is a 
CC, and 19 percent greater than expected when reported in conjunction 
with another secondary diagnosis code that is an MCC. Our clinical 
advisors reviewed this request and agree that the resources involved in 
caring for a patient with this condition are not aligned with those of 
an MCC.
    For ICD-10-CM diagnosis code I50.813, the data suggest that the 
resources involved in caring for a patient with this condition are 44 
percent greater than expected when the patient has either no other 
secondary diagnosis present or all the other secondary diagnoses 
present are non-CCs. The resources are 60 percent greater than expected 
when reported in conjunction with another secondary diagnosis that is a 
CC, and 28 percent greater than expected when reported in conjunction 
with another secondary diagnosis code that is an MCC. Our clinical 
advisors reviewed this request and agree that the resources involved in 
caring for a patient with this condition are not aligned with those of 
an MCC.
    However, we note that although the data suggest that the resources 
involved in caring for a patient with this condition are not aligned 
with those of an MCC, the data suggest and our clinical advisors 
believe that the resources appear to be aligned with

[[Page 19247]]

those of a CC. Therefore, we are soliciting public comment on whether a 
CC severity level designation for ICD-10-CM diagnosis codes I50.811 and 
I50.813 for FY 2020 is appropriate.
(2) Chronic Right Heart Failure
    We received a request to change the severity level for ICD-10-CM 
diagnosis code I50.812 (Chronic right heart failure) from a non-CC to a 
CC. The requestor stated that this code warrants CC classification 
because it indicates the presence and treatment of chronic heart 
failure. We used the approach outlined earlier to evaluate this 
request. The following table contains the data that we used to evaluate 
this request:

 
--------------------------------------------------------------------------------------------------------------------------------------------------------
     ICD-10-CM diagnosis code          Cnt1        C1        Cnt2        C2        Cnt3        C3       Current CC  subclass     Requested CC  subclass
--------------------------------------------------------------------------------------------------------------------------------------------------------
I50.812 Chronic right heart               179     1.5114      1,533     2.1146      1,758     3.0549  non-CC..................  CC.
 failure.
--------------------------------------------------------------------------------------------------------------------------------------------------------

    For ICD-10-CM diagnosis code I50.812, the data suggest that the 
resources involved in caring for a patient with this condition are 51 
percent greater than expected when the patient has either no other 
secondary diagnosis present or all the other secondary diagnoses 
present are non-CCs. The resources are 11 percent greater than expected 
when reported in conjunction with another secondary diagnosis that is a 
CC, and 5 percent greater than expected when reported in conjunction 
with another secondary diagnosis code that is an MCC. Our clinical 
advisors reviewed this request and agree that the resources involved in 
caring for a patient with this condition are not aligned with those of 
a CC. Therefore, we are not proposing a change to the severity level 
for ICD-10-CM diagnosis code I50.812.
(3) Ascites in Alcoholic Liver Disease and Toxic Liver Disease
    We received a request to change the severity level for ICD-10-CM 
diagnosis codes K70.11 (Alcoholic hepatitis with ascites), K70.31 
(Alcoholic cirrhosis with ascites), and K71.51 (Toxic liver disease 
with chronic active hepatitis with ascites) from a non-CC to a CC. The 
requestor stated that these codes warrant CC classification because 
providers are not currently compensated for the ascites treatment. We 
used the approach outlined earlier to evaluate this request. The 
following table contains the data that we used to evaluate this 
request.

 
--------------------------------------------------------------------------------------------------------------------------------------------------------
     ICD-10-CM diagnosis code          Cnt1        C1        Cnt2        C2        Cnt3        C3       Current CC  subclass     Requested CC  subclass
--------------------------------------------------------------------------------------------------------------------------------------------------------
K70.11 Alcoholic hepatitis with           134     1.2952      1,940     2.3444      3,331     3.3635  non-CC..................  CC.
 ascites.
K70.31 Alcoholic cirrhosis with         1,634     1.1129     18,675     2.2301     26,822     3.2479  non-CC..................  CC.
 ascites.
K71.51 Toxic liver disease with            16     0.8913        218     2.1743        274     3.1418  non-CC..................  CC.
 chronic active hepatitis with
 ascites.
--------------------------------------------------------------------------------------------------------------------------------------------------------

    For ICD-10-CM diagnosis code K70.11, the data suggest that the 
resources involved in caring for a patient with this condition are 29 
percent greater than expected when the patient has either no other 
secondary diagnosis present or all the other secondary diagnoses 
present are non-CCs. The resources are 34 percent greater than expected 
when reported in conjunction with another secondary diagnosis that is a 
CC, and 36 percent greater than expected when reported in conjunction 
with another secondary diagnosis code that is an MCC. Our clinical 
advisors reviewed this request and agree that the resources involved in 
caring for a patient with this condition are not aligned with those of 
a CC. Therefore, we are not proposing a change to the severity level 
for ICD-10-CM diagnosis code K70.11.
    For ICD-10-CM diagnosis code K70.31, the data suggest that the 
resources involved in caring for a patient with this condition are 11 
percent greater than expected when the patient has either no other 
secondary diagnosis present or all the other secondary diagnoses 
present are non-CCs. The resources are 23 percent greater than expected 
when reported in conjunction with another secondary diagnosis that is a 
CC, and 25 percent greater than expected when reported in conjunction 
with another secondary diagnosis code that is an MCC. Our clinical 
advisors reviewed this request and agree that the resources involved in 
caring for a patient with this condition are not aligned with those of 
a CC. Therefore, we are not proposing a change to the severity level 
for ICD-10-CM diagnosis code K70.31.
    For ICD-10-CM diagnosis code K71.51, the data suggest that the 
resources involved in caring for a patient with this condition are 11 
percent lower than expected when the patient has either no other 
secondary diagnosis present, or all the other secondary diagnoses 
present are non-CCs. The resources are 17 percent greater than expected 
when reported in conjunction with another secondary diagnosis that is a 
CC, and 14 percent greater than expected when reported in conjunction 
with another secondary diagnosis code that is an MCC. Our clinical 
advisors reviewed this request and agree that the resources involved in 
caring for a patient with this condition are not aligned with those of 
a CC. Therefore, we are not proposing a change to the severity level 
for ICD-10-CM diagnosis code K71.51.
(4) Factitious Disorder Imposed on Self
    We received a request to change the severity level for ICD-10-CM 
diagnosis codes F68.11 (Factitious disorder imposed on self, with 
predominantly psychological signs and symptoms) and F68.13 (Factitious 
disorder imposed on self, with combined psychological and physical 
signs and symptoms) from a

[[Page 19248]]

non-CC to a CC. The requestor stated that similar codes in the 
classification are designated as a CC. We used the approach outlined 
earlier to evaluate this request. The following table contains the data 
that we used to evaluate this request.

 
--------------------------------------------------------------------------------------------------------------------------------------------------------
     ICD-10-CM diagnosis code          Cnt1        C1        Cnt2        C2        Cnt3        C3       Current CC  subclass     Requested CC  subclass
--------------------------------------------------------------------------------------------------------------------------------------------------------
F68.11 Factitious disorder imposed         16     1.2040         59     0.9979         15     3.2395  non-CC..................  CC.
 on self, with predominantly
 psychological signs and symptoms.
F68.13 Factitious disorder imposed          4     1.6226         32     1.9840         11     4.0000  non-CC..................  CC.
 on self, with combined
 psychological and physical signs
 and symptoms.
--------------------------------------------------------------------------------------------------------------------------------------------------------

    For ICD-10-CM diagnosis code F68.11, the number of patients found 
in the September 2018 update of the FY 2018 MedPAR data in each of the 
subsets is 16, 59, and 15, and for ICD-10-CM diagnosis code F68.13, the 
number of patients in each of the subsets is 4, 32, and 11. Our 
clinical advisors reviewed this request and believe that due to the 
small number of cases in the data, it is not possible to use 
statistical methods to evaluate the impact on resource use of patients. 
Our clinical advisors also do not believe there is a clinical basis to 
change the severity level in the absence of data. Our clinical advisors 
noted that if a patient was diagnosed with either one of these ICD-10-
CM diagnoses (ICM-10-CM diagnosis code F68.11 or F68.13), there would 
more than likely be another diagnosis code reported that identifies the 
psychological and/or physical symptoms the patient is experiencing that 
may be a better indicator of resources utilized because these patients 
often fabricate their illness and inflict injuries on themselves to 
receive attention. For example, a patient may cut his or her finger, 
resulting in a wound which requires repair. It is the cut and need for 
repair that contribute to the resources consumed in caring for a 
patient with this diagnosis. Therefore, we are not proposing a change 
to the severity level for ICD-10-CM diagnosis codes F68.11 and F68.13 
at this time.
(5) Nonunion and Malunion of Physeal Metatarsal Fractures
    We received a request to change the severity level designations for 
the following six ICD-10-CM diagnosis codes from a non-CC to a CC: 
S99.101B (Unspecified physeal fracture of right metatarsal, initial 
encounter for open fracture); S99.101K (Unspecified physeal fracture of 
right metatarsal, subsequent encounter for fracture); S99.101P 
(Unspecified physeal fracture of right metatarsal, subsequent encounter 
for fracture with malunion); S99.132B (Salter-Harris Type III physeal 
fracture of left metatarsal, initial encounter for open fracture), 
S99.132K (Salter-Harris Type III physeal fracture of left metatarsal, 
subsequent encounter for fracture with nonunion); and S99.132P (Salter-
Harris Type III physeal fracture of left metatarsal, subsequent 
encounter for fracture with malunion with nonunion). The requestor 
stated that similar codes for open fractures, nonunions, and malunions 
of other sites currently are designated as CCs. However the requestor 
did not provide the specific ICD-10-CM diagnosis codes that are 
currently designated as CCs that the requestor believes are an 
appropriate comparator. There are a considerable number of fractures, 
nonunions, and malunions of other sites, some of which are designated 
as CCs and others that are not. In particular, in evaluating this 
request, we would want to review the appropriateness of designating 
unspecified codes (that is, ICD-10-CM diagnosis codes S99.101B, 
S99.101K, and S99.101P) as a CC, to avoid potentially discouraging more 
detailed coding. In addition, none of the other ICD-10-CM diagnosis 
codes describing Salter-Harris fractures (for example, ICD-10-CM 
diagnosis codes in sub-subcategory S99.11- (Salter-Harris Type I 
physeal fracture of metatarsal), S99.12- (Salter-Harris Type II physeal 
fracture of metatarsal), S99.13- (Salter-Harris Type III physeal 
fracture of metatarsal), and S99.14- (Salter-Harris Type IV physeal 
fracture of metatarsal)) currently have a CC designation.
    Given the lack of supporting information for this request and 
because we believe this request may require further research and 
analysis to evaluate the relevant category of fracture codes and fully 
assess the claims data, we are unable to fully evaluate this request 
for FY 2020. Therefore, at this time, we are not proposing changes to 
the severity level designations for ICD-10-CM diagnosis codes S99.101B, 
S99.101K, S99.101P, S99.132B, S99.132K, and S99.132P as the requestor 
recommended.
(6) Other Encephalopathy
    In the FY 2019 IPPS/LTCH PPS proposed rule (83 FR 20241), we 
discussed a request that we had received to change the severity level 
designation for ICD-10-CM diagnosis code G93.40 (Encephalopathy, 
unspecified) from an MCC to a non-CC. We did not propose a change based 
on the review of the claims data and input from our clinical advisors. 
However, after a review of public comments in response to that 
proposal, we finalized a change in the severity level designation for 
ICD-10-CM diagnosis code G93.40 from an MCC to a CC (83 FR 41239).
    We received a request to reconsider the change in the severity 
level designation for ICD-10-CM diagnosis code G93.49 (Other 
encephalopathy) from an MCC to a CC, as reflected in Table 6I.2--
Deletions to the MCC List and Table 6J.--Complete CC List that were 
associated with the FY 2019 IPPS/LTCH PPS final rule, because the 
requestor noted this diagnosis code was not discussed in the FY 2019 
IPPS/LTCH PPS proposed or final rules along with the discussion of 
related ICD-10-CM diagnosis code G93.40. The requestor stated that 
diagnosis code G93.49 warrants an MCC classification to accurately 
reflect severity of illness and resources contributing to an extended 
length of stay for patients who have this condition.
    Our clinical advisors reviewed the data for ICD-10-CM diagnosis 
code G93.49 (Other encephalopathy) as set forth in the table below, and 
noted that the C1 value is close to 2.0, which indicates that the 
resource use is aligned with that of a CC, while the C2 value is about 
halfway between 2.0 and 3.0, which is also consistent with the resource 
use of a CC. They also compared the C1, C2, and C3 values of diagnosis 
code G93.49 to those of diagnosis code G93.40, as also set forth in the 
table below, and noted that the values were similar for both codes. Our 
clinical advisors noted that similar to diagnosis code G93.40, 
diagnosis code

[[Page 19249]]

G93.49 (Other encephalopathy) is poorly defined, not all 
encephalopathies are MCCs, and the MCC status may create an incentive 
for coding personnel to not pursue specificity of encephalopathy. 
Therefore, they believe that these conditions are clinically similar 
and should be assigned the same CC severity level status. Therefore, we 
are not proposing any change to the severity level for ICD 10 CM 
diagnosis code G93.49 (Other encephalopathy) for FY 2020.

----------------------------------------------------------------------------------------------------------------
           ICD-10-CM diagnosis code                Cnt1        C1        Cnt2        C2        Cnt3        C3
----------------------------------------------------------------------------------------------------------------
G93.40 (Encephalopathy, unspecified)..........     32,023      1.812    161,991      2.494    294,088      3.289
G93.49 (Other encephalopathy).................      4,258      1.758     23,203      2.536     40,836      3.349
----------------------------------------------------------------------------------------------------------------

(7) Obstetrics Chapter Codes
    We received a request to change the severity level for 94 ICD-10-CM 
diagnosis codes in the Obstetrics chapter of the ICD-10-CM diagnosis 
classification that describe a variety of complications of pregnancy, 
childbirth and the puerperium. The requestor stated that the 
reclassification of the 94 obstetric diagnosis codes would more 
appropriately reflect severity of illness and accurate MS-DRG grouping 
after CMS' FY 2019 creation of new obstetric MS-DRGs subdivided by 
severity level (with MCC, with CC, and without CC/MCC).
    The 94 obstetrics codes associated with this request and their 
current and requested severity level designation are shown in Table 
6P.1e. associated with this proposed rule (which is available via the 
internet on the CMS website at: http://www.cms.hhs.gov/Medicare/Medicare-Fee-for-Service-Payment/AcuteInpatientPPS/index.html). We are 
proposing to move some of these diagnosis codes to a higher severity 
level and some diagnosis codes to a lower severity level. Our proposals 
are shown in the table below.
    Our clinical advisors indicated that the approach outlined 
elsewhere in this section to evaluate requested changes to severity 
levels, in which each diagnosis is evaluated using Medicare cost data 
to determine the extent to which its presence as a secondary diagnosis 
resulted in increased hospital resource use, could not be used to 
evaluate this request because the number of obstetric patients in the 
Medicare data was insufficient to perform evaluation using statistical 
methods. Instead, our clinical advisors used their clinical judgment to 
evaluate the requested changes to the severity levels for the 94 
obstetrics diagnosis codes. Our clinical advisors concur with the 
requestor that changes to the severity level for some of the obstetrics 
diagnosis codes would more appropriately reflect severity of illness 
and accurate MS-DRG grouping. Specifically, our clinical advisors 
agreed with the requested change to severity from a non-CC to a CC for 
10 of the diagnosis codes identified by the requestor because they 
believe these conditions clinically warrant a CC designation. They 
noted that 6 of the 10 diagnosis codes describe gestational diabetes 
mellitus in pregnancy, gestational diabetes mellitus in childbirth, or 
gestational diabetes mellitus in the puerperium requiring control, 
either by insulin or oral hypoglycemic drugs and the condition would 
require additional monitoring and resources in the inpatient setting. 
They also noted that 2 of the 10 diagnosis codes describe maternal care 
for other isoimmunization in the first trimester for single or multiple 
gestations where the fetus is unspecified or fetus number 1 is 
specified. They indicated that although there are additional diagnosis 
codes describing maternal care for other isoimmunization in the first 
trimester that uniquely identify fetus number 2 through fetus number 5, 
as well as an ``other'' fetus beyond number 5, they do not believe 
these other diagnosis codes have any additional impact on resource use 
because treatment would be directed at the entire uterine cavity. They 
further noted that 1 of the 10 diagnosis codes describes a conjoined 
twin pregnancy in the third trimester and, while conjoined twins occur 
rarely and carry a high risk of complications and mortality, they 
believe the complexities are greatest in the third trimester. Lastly, 1 
of the 10 diagnosis codes describes unspecified diabetes mellitus in 
childbirth, and because the diagnosis codes describing unspecified 
diabetes mellitus in pregnancy and unspecified diabetes mellitus in the 
puerperium are designated as a CC, our clinical advisors agreed that 
clinically, the condition occurring in childbirth warrants a CC 
designation as well. Our clinical advisors also agreed with the 
requested change to severity level from an MCC to a CC for 4 other 
diagnosis codes identified by the requestor because, clinically, the CC 
designation is consistent with the other diagnosis codes within those 
diagnosis code families. For example, the diagnosis codes describing 
preexisting type 1 diabetes mellitus in pregnancy, preexisting type 2 
diabetes mellitus in pregnancy and unspecified preexisting diabetes 
mellitus in pregnancy, regardless of trimester (first, second, third, 
and unspecified) are all designated as CCs. Our clinical advisors 
agreed that the diagnosis codes describing these same conditions ``in 
childbirth'' also warrant a CC designation because the conditions do 
not require additional resources or reflect a greater severity of 
illness compared to the conditions when they occur ``in pregnancy''. 
Therefore, we are proposing a change to the severity level for 14 ICD-
10-CM diagnosis codes as shown in the following table.

----------------------------------------------------------------------------------------------------------------
              ICD-10-CM diagnosis code                    Current CC  subclass          Proposed CC  subclass
----------------------------------------------------------------------------------------------------------------
O24.02 (Pre-existing type 1 diabetes mellitus, in    MCC..........................  CC.
 childbirth).
O24.12 (Pre-existing type 2 diabetes mellitus, in    MCC..........................  CC.
 childbirth).
O24.32 (Unspecified pre-existing diabetes mellitus   MCC..........................  CC.
 in childbirth).
O24.414 (Gestational diabetes mellitus in            Non-CC.......................  CC.
 pregnancy, insulin controlled).
O24.415 (Gestational diabetes mellitus in            Non-CC.......................  CC.
 pregnancy, controlled by oral hypoglycemic drugs).
O24.424 (Gestational diabetes mellitus in            Non-CC.......................  CC.
 childbirth, insulin controlled).
O24.425 (Gestational diabetes mellitus in            Non-CC.......................  CC.
 childbirth, controlled by oral hypoglycemic drugs).
O24.434 (Gestational diabetes mellitus in the        Non-CC.......................  CC.
 puerperium, insulin controlled).
O24.435 (Gestational diabetes mellitus in            Non-CC.......................  CC.
 puerperium, controlled by oral hypoglycemic drugs).
O24.82 (Other pre-existing diabetes mellitus in      MCC..........................  CC.
 childbirth).
O24.92 (Unspecified diabetes mellitus in             Non-CC.......................  CC.
 childbirth).

[[Page 19250]]

 
O30.023 (Conjoined twin pregnancy, third trimester)  Non-CC.......................  CC.
O36.1910 (Maternal care for other isoimmunization,   Non-CC.......................  CC.
 first trimester, not applicable or unspecified).
O36.1911 (Maternal care for other isoimmunization,   Non-CC.......................  CC.
 first trimester, fetus 1).
----------------------------------------------------------------------------------------------------------------

    Given the limited number of cases reporting ICD-10-CM obstetrical 
codes in the Medicare claims data, we note that use of datasets other 
than MedPAR cost data for future evaluation of severity level 
designation for the ICD-10-CM diagnosis codes from the Obstetrics 
chapter of the ICD-10-CM classification is under consideration.
e. Proposed Additions and Deletions to the Diagnosis Code Severity 
Levels for FY 2020
    The following tables identify the proposed additions and deletions 
to the diagnosis code MCC severity levels list and the proposed 
additions and deletions to the diagnosis code CC severity levels list 
for FY 2020 and are available via the internet on the CMS website at: 
https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/AcuteInpatientPPS/index.html.
    Table 6I.1--Proposed Additions to the MCC List--FY 2020;
    Table 6I.2--Proposed Deletions to the MCC List--FY 2020;
    Table 6J.1--Proposed Additions to the CC List--FY 2020; and
    Table 6J.2--Proposed Deletions to the CC List--FY 2020.
f. Proposed CC Exclusions List for FY 2020
    In the September 1, 1987 final notice (52 FR 33143) concerning 
changes to the DRG classification system, we modified the GROUPER logic 
so that certain diagnoses included on the standard list of CCs would 
not be considered valid CCs in combination with a particular principal 
diagnosis. We created the CC Exclusions List for the following reasons: 
(1) To preclude coding of CCs for closely related conditions; (2) to 
preclude duplicative or inconsistent coding from being treated as CCs; 
and (3) to ensure that cases are appropriately classified between the 
complicated and uncomplicated DRGs in a pair.
    In the May 19, 1987 proposed notice (52 FR 18877) and the September 
1, 1987 final notice (52 FR 33154), we explained that the excluded 
secondary diagnoses were established using the following five 
principles:
     Chronic and acute manifestations of the same condition 
should not be considered CCs for one another;
     Specific and nonspecific (that is, not otherwise specified 
(NOS)) diagnosis codes for the same condition should not be considered 
CCs for one another;
     Codes for the same condition that cannot coexist, such as 
partial/total, unilateral/bilateral, obstructed/unobstructed, and 
benign/malignant, should not be considered CCs for one another;
     Codes for the same condition in anatomically proximal 
sites should not be considered CCs for one another; and
     Closely related conditions should not be considered CCs 
for one another.
    The creation of the CC Exclusions List was a major project 
involving hundreds of codes. We have continued to review the remaining 
CCs to identify additional exclusions and to remove diagnoses from the 
master list that have been shown not to meet the definition of a CC. We 
refer readers to the FY 2014 IPPS/LTCH PPS final rule (78 FR 50541 
through 50544) for detailed information regarding revisions that were 
made to the CC and CC Exclusion Lists under the ICD-9-CM MS-DRGs.
    In this FY 2020 IPPS/LTCH PPS proposed rule, for FY 2020, we are 
proposing changes to the ICD-10 MS-DRGs Version 37 CC Exclusion List. 
Therefore, we have developed Table 6G.1.--Proposed Secondary Diagnosis 
Order Additions to the CC Exclusions List--FY 2020; Table 6G.2.--
Proposed Principal Diagnosis Order Additions to the CC Exclusions 
List--FY 2020; Table 6H.1.--Proposed Secondary Diagnosis Order 
Deletions to the CC Exclusions List--FY 2020; and Table 6H.2.--Proposed 
Principal Diagnosis Order Deletions to the CC Exclusions List--FY 2020. 
For Table 6G.1, each secondary diagnosis code proposed for addition to 
the CC Exclusion List is shown with an asterisk and the principal 
diagnoses proposed to exclude the secondary diagnosis code are provided 
in the indented column immediately following it. For Table 6G.2, each 
of the principal diagnosis codes for which there is a CC exclusion is 
shown with an asterisk and the conditions proposed for addition to the 
CC Exclusion List that will not count as a CC are provided in an 
indented column immediately following the affected principal diagnosis. 
For Table 6H.1, each secondary diagnosis code proposed for deletion 
from the CC Exclusion List is shown with an asterisk followed by the 
principal diagnosis codes that currently exclude it. For Table 6H.2, 
each of the principal diagnosis codes is shown with an asterisk and the 
proposed deletions to the CC Exclusions List are provided in an 
indented column immediately following the affected principal diagnosis. 
Tables 6G.1., 6G.2., 6H.1., and 6H.2. associated with this proposed 
rule are available via the internet on the CMS website at: https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/AcuteInpatientPPS/index.html.
15. Proposed Changes to the ICD-10-CM and ICD-10-PCS Coding Systems
    To identify new, revised and deleted diagnosis and procedure codes, 
for FY 2020, we have developed 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, 
and Table 6F.--Revised Procedure Code Titles for this proposed rule.
    These tables are not published in the Addendum to this proposed 
rule but are available via the internet on the CMS website at: https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/AcuteInpatientPPS/index.html as described in section VI. of the 
Addendum to this proposed rule. As discussed in section II.F.18. of the 
preamble of this proposed rule, the code titles are adopted as part of 
the ICD-10 (previously ICD-9-CM) Coordination and Maintenance Committee 
process. Therefore, although we publish the code titles in the IPPS 
proposed and final rules, they are not subject to comment in the 
proposed or final rules.
    We are proposing the MDC and MS-DRG assignments for the new 
diagnosis and procedure codes as set forth in Table 6A.--New Diagnosis 
Codes and Table 6B.--New Procedure Codes. In addition, the proposed 
severity level designations for the new diagnosis codes are set forth 
in Table 6A. and the proposed O.R. status for the new procedure codes 
are set forth in Table 6B.
    We are making available on the CMS website at https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/AcuteInpatientPPS/index.html

[[Page 19251]]

the following tables associated with this proposed rule:
     Table 6A.--New Diagnosis Codes--FY 2020;
     Table 6B.--New Procedure Codes--FY 2020;
     Table 6C.--Invalid Diagnosis Codes--FY 2020;
     Table 6D.--Invalid Procedure Codes--FY 2020;
     Table 6E.--Revised Diagnosis Code Titles--FY 2020;
     Table 6F.--Revised Procedure Code Titles--FY 2020;
     Table 6G.1.--Proposed Secondary Diagnosis Order Additions 
to the CC Exclusions List--FY 2020;
     Table 6G.2.--Proposed Principal Diagnosis Order Additions 
to the CC Exclusions List--FY 2020;
     Table 6H.1.--Proposed Secondary Diagnosis Order Deletions 
to the CC Exclusions List--FY 2020;
     Table 6H.2.--Proposed Principal Diagnosis Order Deletions 
to the CC Exclusions List--FY 2020;
     Table 6I.1.--Proposed Additions to the MCC List--FY 2020;
     Table 6I.2.-Proposed Deletions to the MCC List--FY 2020;
     Table 6J.1.--Proposed Additions to the CC List--FY 2020; 
and
     Table 6J.2.--Proposed Deletions to the CC List--FY 2020.
16. Proposed Changes to the Medicare Code Editor (MCE)
    The Medicare Code Editor (MCE) is a software program that detects 
and reports errors in the coding of Medicare claims data. Patient 
diagnoses, procedure(s), and demographic information are entered into 
the Medicare claims processing systems and are subjected to a series of 
automated screens. The MCE screens are designed to identify cases that 
require further review before classification into an MS-DRG.
    As discussed in the FY 2019 IPPS/LTCH PPS final rule (83 FR 41220), 
we made available the FY 2019 ICD-10 MCE Version 36 manual file. The 
link to this MCE manual file, along with the link to the mainframe and 
computer software for the MCE Version 36 (and ICD-10 MS-DRGs) are 
posted on the CMS website at: https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/AcuteInpatientPPS/MS-DRG-Classifications-and-Software.html.
    For this FY 2020 IPPS/LTCH PPS proposed rule, below we address the 
MCE requests we received by the November 1, 2018 deadline. We also 
discuss the proposals we are making based on our internal review and 
analysis.
a. Age Conflict Edit: Maternity Diagnoses
    In the MCE, the Age conflict edit exists to detect inconsistencies 
between a patient's age and any diagnosis on the patient's record; for 
example, a 5-year-old patient with benign prostatic hypertrophy or a 
78-year-old patient coded with a delivery. In these cases, the 
diagnosis is clinically and virtually impossible for a patient of the 
stated age. Therefore, either the diagnosis or the age is presumed to 
be incorrect. Currently, in the MCE, the following four age diagnosis 
categories appear under the Age conflict edit and are listed in the 
manual and written in the software program:
     Perinatal/Newborn--Age of 0 years only; a subset of 
diagnoses which will only occur during the perinatal or newborn period 
of age 0 (for example, tetanus neonatorum, health examination for 
newborn under 8 days old).
     Pediatric--Age is 0-17 years inclusive (for example, 
Reye's syndrome, routine child health exam).
     Maternity--Age range is 12-55 years inclusive (for 
example, diabetes in pregnancy, antepartum pulmonary complication).
     Adult--Age range is 15-124 years inclusive (for example, 
senile delirium, mature cataract).
    Under the ICD-10 MCE, the maternity diagnoses category for the Age 
conflict edit considers the age range of 12 to 55 years inclusive. For 
that reason, the diagnosis codes on this Age conflict edit list would 
be expected to apply to conditions or disorders specific to that age 
group only.
    We received a request to reconsider the age range associated with 
the maternity diagnoses category for the Age conflict edit. According 
to the requestor, pregnancies can and do occur prior to age 12 and 
after age 55. The requestor suggested that a more appropriate age range 
would be from age 9 to age 64 for the maternity diagnoses category.
    We agree with the requestor that pregnancies can and do occur prior 
to the age of 12 and after the age of 55. We also agree that the 
suggested range, age 9 to age 64, is an appropriate age range. 
Therefore, we are proposing to revise the maternity diagnoses category 
for the Age conflict edit to consider the new age range of 9 to 64 
years inclusive.
b. Sex Conflict Edit: Diagnoses for Females Only Edit
    In the MCE, the Sex conflict edit detects inconsistencies between a 
patient's sex and any diagnosis or procedure on the patient's record; 
for example, a male patient with cervical cancer (diagnosis) or a 
female patient with a prostatectomy (procedure). In both instances, the 
indicated diagnosis or the procedure conflicts with the stated sex of 
the patient. Therefore, the patient's diagnosis, procedure, or sex is 
presumed to be incorrect.
    As discussed in section II.F.15. of the preamble of this proposed 
rule, Table 6A.--New Diagnosis Codes which is associated with this 
proposed rule (and is available via the internet on the CMS website at: 
https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/AcuteInpatientPPS/index.html) lists the new diagnosis codes that have 
been approved to date which will be effective with discharges on and 
after October 1, 2019. ICD-10-CM diagnosis code N99.85 (Post 
endometrial ablation syndrome) is a new code that describes a condition 
consistent with the female sex. We are proposing to add this diagnosis 
code to the Diagnoses for Females Only edit code list under the Sex 
conflict edit.
c. Unacceptable Principal Diagnosis Edit
    In the MCE, there are select codes that describe a circumstance 
that influences an individual's health status but does not actually 
describe a current illness or injury. There also are codes that are not 
specific manifestations but may be due to an underlying cause. These 
codes are considered unacceptable as a principal diagnosis. In limited 
situations, there are a few codes on the MCE Unacceptable Principal 
Diagnosis edit code list that are considered ``acceptable'' when a 
specified secondary diagnosis is also coded and reported on the claim.
    ICD-10-CM diagnosis codes I46.2 (Cardiac arrest due to underlying 
cardiac condition) and I46.8 (Cardiac arrest due to other underlying 
condition) are codes that clearly specify cardiac arrest as being due 
to an underlying condition. Also, in the ICD-10-CM Tabular List, there 
are instructional notes to ``Code first underlying cardiac condition'' 
at ICD-10-CM diagnosis code I46.2 and to ``Code first underlying 
condition'' at ICD-10-CM diagnosis code I46.8. Therefore, we are 
proposing to add ICD-10-CM diagnosis codes I46.2 and I46.8 to the 
Unacceptable Principal Diagnosis Category edit code list.
    As discussed in section II.F.15. of the preamble of this proposed 
rule, Table 6A.--New Diagnosis Codes associated with this proposed rule 
(which is available via the internet on the CMS website at: https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/AcuteInpatientPPS/index.html) lists the new diagnosis

[[Page 19252]]

codes that have been approved to date that will be effective with 
discharges occurring on and after October 1, 2019.
    We are proposing to add the new ICD-10-CM diagnosis codes listed in 
the following table to the Unacceptable Principal Diagnosis Category 
edit code list, as these codes are consistent with other ICD-10-CM 
diagnosis codes currently included on the Unacceptable Principal 
Diagnosis Category edit code list.

------------------------------------------------------------------------
      ICD-10-CM code                      Code description
------------------------------------------------------------------------
T50.915A..................  Adverse effect of multiple unspecified
                             drugs, medicaments and biological
                             substances, initial encounter.
T50.915D..................  Adverse effect of multiple unspecified
                             drugs, medicaments and biological
                             substances, subsequent encounter.
T50.915S..................  Adverse effect of multiple unspecified
                             drugs, medicaments and biological
                             substances, sequela.
T50.916A..................  Underdosing of multiple unspecified drugs,
                             medicaments and biological substances,
                             initial encounter.
T50.916D..................  Underdosing of multiple unspecified drugs,
                             medicaments and biological substances,
                             subsequent encounter.
T50.916S..................  Underdosing of multiple unspecified drugs,
                             medicaments and biological substances,
                             sequela.
Z11.7.....................  Encounter for testing for latent
                             tuberculosis infection.
Z22.7.....................  Latent tuberculosis.
Z71.84....................  Encounter for health counseling related to
                             travel.
Z86.002...................  Personal history of in-situ neoplasm of
                             other and unspecified genital organs.
Z86.003...................  Personal history of in-situ neoplasm of oral
                             cavity, esophagus and stomach.
Z86.004...................  Personal history of in-situ neoplasm of
                             other and unspecified digestive organs.
Z86.005...................  Personal history of in-situ neoplasm of
                             middle ear and respiratory system.
Z86.006...................  Personal history of melanoma in-situ.
------------------------------------------------------------------------

d. Non-Covered Procedure Edit
    In the MCE, the Non-Covered Procedure edit identifies procedures 
for which Medicare does not provide payment. Payment is not provided 
due to specific criteria that are established in the National Coverage 
Determination (NCD) process. We refer readers to the website at: 
https://www.cms.gov/Medicare/Coverage/Determination Process/
howtorequestanNCD.html for additional information on this process. In 
addition, there are procedures that would normally not be paid by 
Medicare but, due to the presence of certain diagnoses, are paid.
    As discussed in section II.F.15. of the preamble of this proposed 
rule, Table 6D.--Invalid Procedure Codes associated with this proposed 
rule (which is available via the internet on the CMS website at: 
https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/AcuteInpatient PPS/index.html) lists the procedure codes that are no 
longer effective as of October 1, 2019. Included in this table are the 
following ICD-10-PCS procedure codes listed on the Non-Covered 
Procedure edit code list.

------------------------------------------------------------------------
      ICD-10-PCS code                     Code description
------------------------------------------------------------------------
037G3Z6...................  Dilation of intracranial artery,
                             bifurcation, percutaneous approach.
037G4Z6...................  Dilation of intracranial artery,
                             bifurcation, percutaneous endoscopic
                             approach.
------------------------------------------------------------------------

    We are proposing to remove these codes from the Non-Covered 
Procedure edit code list. In addition, as discussed in section 
II.F.2.b. of the preamble of this proposed rule, a number of ICD-10-PCS 
procedure codes describing bone marrow transplant procedures were the 
subject of a proposal discussed at the March 5-6, 2019 ICD-10 
Coordination and Maintenance Committee meeting, to be deleted effective 
October 1, 2019. We are proposing that if the applicable proposal is 
finalized, we would delete the subset of those ICD-10-PCS procedure 
codes that are currently listed on the Non-Covered Procedure edit code 
list as shown in the following table.

------------------------------------------------------------------------
      ICD-10-PCS code                     Code description
------------------------------------------------------------------------
30250G0...................  Transfusion of autologous bone marrow into
                             peripheral artery, open approach.
30250Y0...................  Transfusion of autologous hematopoietic stem
                             cells into peripheral artery, open
                             approach.
30253G0...................  Transfusion of autologous bone marrow into
                             peripheral artery, percutaneous approach.
30253Y0...................  Transfusion of autologous hematopoietic stem
                             cells into peripheral artery, percutaneous
                             approach.
30260G0...................  Transfusion of autologous bone marrow into
                             central artery, open approach.
30260Y0...................  Transfusion of autologous hematopoietic stem
                             cells into central artery, open approach.
30263G0...................  Transfusion of autologous bone marrow into
                             central artery, percutaneous approach.
30263Y0...................  Transfusion of autologous hematopoietic stem
                             cells into central artery, percutaneous
                             approach.
------------------------------------------------------------------------

e. Future Enhancement
    In the FY 2018 IPPS/LTCH PPS final rule (82 FR 38053 through 
38054), we noted the importance of ensuring accuracy of the coded data 
from the reporting, collection, processing, coverage, payment, and 
analysis aspects. We have engaged a contractor to assist in the review 
of the limited coverage and noncovered procedure edits in the MCE that 
may also be present in other claims processing systems that are 
utilized by our MACs. The MACs must adhere to criteria specified within 
the National Coverage Determinations (NCDs) and may implement their own 
edits in addition to what are already incorporated into the MCE, 
resulting in duplicate edits. The objective of this review is to 
identify where duplicate edits may exist and to determine what the 
impact might be if these edits were to be removed from the MCE.
    We have noted that the purpose of the MCE is to ensure that errors 
and inconsistencies in the coded data are recognized during Medicare 
claims processing. As we indicated in the FY 2019 IPPS/LTCH PPS final 
rule (83 FR

[[Page 19253]]

41228), we are considering whether the inclusion of coverage edits in 
the MCE necessarily aligns with that specific goal because the focus of 
coverage edits is on whether or not a particular service is covered for 
payment purposes and not whether it was coded correctly.
    As we continue to evaluate the purpose and function of the MCE with 
respect to ICD-10, we encourage public input for future discussion. As 
we have discussed in prior rulemaking, we recognize a need to further 
examine the current list of edits and the definitions of those edits. 
We continue to encourage public comments on whether there are 
additional concerns with the current edits, including specific edits or 
language that should be removed or revised, edits that should be 
combined, or new edits that should be added to assist in detecting 
errors or inaccuracies in the coded data. Comments should be directed 
to the MS-DRG Classification Change Mailbox located at: 
[email protected] by November 1, 2019 for the FY 
2021 rulemaking.
17. Proposed Changes to Surgical Hierarchies
    Some inpatient stays entail multiple surgical procedures, each one 
of which, occurring by itself, could result in assignment of the case 
to a different MS-DRG within the MDC to which the principal diagnosis 
is assigned. Therefore, it is necessary to have a decision rule within 
the GROUPER by which these cases are assigned to a single MS-DRG. The 
surgical hierarchy, an ordering of surgical classes from most resource-
intensive to least resource-intensive, performs that function. 
Application of this hierarchy ensures that cases involving multiple 
surgical procedures are assigned to the MS-DRG associated with the most 
resource-intensive surgical class.
    A surgical class can be composed of one or more MS-DRGs. For 
example, in MDC 11, the surgical class ``kidney transplant'' consists 
of a single MS-DRG (MS-DRG 652) and the class ``major bladder 
procedures'' consists of three MS-DRGs (MS-DRGs 653, 654, and 655). 
Consequently, in many cases, the surgical hierarchy has an impact on 
more than one MS-DRG. The methodology for determining the most 
resource-intensive surgical class involves weighting the average 
resources for each MS-DRG by frequency to determine the weighted 
average resources for each surgical class. For example, assume surgical 
class A includes MS-DRGs 001 and 002 and surgical class B includes MS-
DRGs 003, 004, and 005. Assume also that the average costs of MS-DRG 
001 are higher than that of MS-DRG 003, but the average costs of MS-
DRGs 004 and 005 are higher than the average costs of MS-DRG 002. To 
determine whether surgical class A should be higher or lower than 
surgical class B in the surgical hierarchy, we would weigh the average 
costs of each MS-DRG in the class by frequency (that is, by the number 
of cases in the MS-DRG) to determine average resource consumption for 
the surgical class. The surgical classes would then be ordered from the 
class with the highest average resource utilization to that with the 
lowest, with the exception of ``other O.R. procedures'' as discussed in 
this proposed rule.
    This methodology may occasionally result in assignment of a case 
involving multiple procedures to the lower-weighted MS-DRG (in the 
highest, most resource-intensive surgical class) of the available 
alternatives. However, given that the logic underlying the surgical 
hierarchy provides that the GROUPER search for the procedure in the 
most resource-intensive surgical class, in cases involving multiple 
procedures, this result is sometimes unavoidable.
    We note that, notwithstanding the foregoing discussion, there are a 
few instances when a surgical class with a lower average cost is 
ordered above a surgical class with a higher average cost. For example, 
the ``other O.R. procedures'' surgical class is uniformly ordered last 
in the surgical hierarchy of each MDC in which it occurs, regardless of 
the fact that the average costs for the MS-DRG or MS-DRGs in that 
surgical class may be higher than those for other surgical classes in 
the MDC. The ``other O.R. procedures'' class is a group of procedures 
that are only infrequently related to the diagnoses in the MDC, but are 
still occasionally performed on patients with cases assigned to the MDC 
with these diagnoses. Therefore, assignment to these surgical classes 
should only occur if no other surgical class more closely related to 
the diagnoses in the MDC is appropriate.
    A second example occurs when the difference between the average 
costs for two surgical classes is very small. We have found that small 
differences generally do not warrant reordering of the hierarchy 
because, as a result of reassigning cases on the basis of the hierarchy 
change, the average costs are likely to shift such that the higher-
ordered surgical class has lower average costs than the class ordered 
below it.
    Based on the changes that we are proposing to make in this FY 2020 
IPPS/LTCH PPS proposed rule, as discussed in section II.F.5. of this 
preamble of this proposed rule, we are proposing to revise the surgical 
hierarchy for MDC 5 (Diseases and Disorders of the Circulatory System) 
as follows: In MDC 5, we are proposing to sequence proposed new MS-DRGs 
319 and 320 (Other Endovascular Cardiac Valve Procedures with and 
without MCC, respectively) above MS-DRGs 222, 223, 224, 225, 226, and 
227 (Cardiac Defibrillator Implant with and without Cardiac 
Catheterization with and without AMI/HF/Shock with and without MCC, 
respectively) and below MS-DRGs 266 and 267 (Endovascular Cardiac Valve 
Replacement with and without MCC, respectively). We also note that, as 
discussed in section II.F.5.a. of this preamble of this proposed rule, 
we are proposing to revise the titles for MS-DRGs 266 and 267 to 
``Endovascular Cardiac Valve Replacement and Supplement Procedures with 
MCC'' and ``Endovascular Cardiac Valve Replacement and Supplement 
Procedures without MCC'', respectively.
    Our proposal for Appendix D--MS-DRG Surgical Hierarchy by MDC and 
MS-DRG of the ICD-10 MS-DRG Definitions Manual Version 37 is 
illustrated in the following table.

                   Proposed Surgical Hierarchy: MDC 5
------------------------------------------------------------------------
 
------------------------------------------------------------------------
MS-DRG 215.............................  Other Heart Assist System
                                          Implant.
MS-DRGs 216-221........................  Cardiac Valve and Other Major
                                          Cardiothoracic Procedures.
MS-DRGs 266 and 267....................  Endovascular Cardiac Valve
                                          Procedures.
Proposed New MS-DRGs 319 and 320.......  Other Endovascular Cardiac
                                          Valve Procedures.
MS-DRGs 222-227........................  Cardiac Defibrillator Implant.
------------------------------------------------------------------------


[[Page 19254]]

    As with other MS-DRG related issues, we encourage commenters to 
submit requests to examine ICD-10 claims pertaining to the surgical 
hierarchy via the CMS MS-DRG Classification Change Request Mailbox 
located at: [email protected] by November 1, 2019 
for consideration for FY 2021.
18. Maintenance of the ICD-10-CM and ICD-10-PCS Coding Systems
    In September 1985, the ICD-9-CM Coordination and Maintenance 
Committee was formed. This is a Federal interdepartmental committee, 
co-chaired by the National Center for Health Statistics (NCHS), the 
Centers for Disease Control and Prevention (CDC), and CMS, charged with 
maintaining and updating the ICD-9-CM system. The final update to ICD-
9-CM codes was made on October 1, 2013. Thereafter, the name of the 
Committee was changed to the ICD-10 Coordination and Maintenance 
Committee, effective with the March 19-20, 2014 meeting. The ICD-10 
Coordination and Maintenance Committee addresses updates to the ICD-10-
CM and ICD-10-PCS coding systems. The Committee is jointly responsible 
for approving coding changes, and developing errata, addenda, and other 
modifications to the coding systems to reflect newly developed 
procedures and technologies and newly identified diseases. The 
Committee is also responsible for promoting the use of Federal and non-
Federal educational programs and other communication techniques with a 
view toward standardizing coding applications and upgrading the quality 
of the classification system.
    The official list of ICD-9-CM diagnosis and procedure codes by 
fiscal year can be found on the CMS website at: http://cms.hhs.gov/Medicare/Coding/ICD9ProviderDiagnosticCodes/codes.html. The official 
list of ICD-10-CM and ICD-10-PCS codes can be found on the CMS website 
at: http://www.cms.gov/Medicare/Coding/ICD10/index.html.
    The NCHS has lead responsibility for the ICD-10-CM and ICD-9-CM 
diagnosis codes included in the Tabular List and Alphabetic Index for 
Diseases, while CMS has lead responsibility for the ICD-10-PCS and ICD-
9-CM procedure codes included in the Tabular List and Alphabetic Index 
for Procedures.
    The Committee encourages participation in the previously mentioned 
process by health-related organizations. In this regard, the Committee 
holds public meetings for discussion of educational issues and proposed 
coding changes. These meetings provide an opportunity for 
representatives of recognized organizations in the coding field, such 
as the American Health Information Management Association (AHIMA), the 
American Hospital Association (AHA), and various physician specialty 
groups, as well as individual physicians, health information management 
professionals, and other members of the public, to contribute ideas on 
coding matters. After considering the opinions expressed at the public 
meetings and in writing, the Committee formulates recommendations, 
which then must be approved by the agencies.
    The Committee presented proposals for coding changes for 
implementation in FY 2020 at a public meeting held on September 11-12, 
2018, and finalized the coding changes after consideration of comments 
received at the meetings and in writing by November 13, 2018.
    The Committee held its 2019 meeting on March 5-6, 2019. The 
deadline for submitting comments on these code proposals is scheduled 
for April 5, 2019. It was announced at this meeting that any new 
diagnosis and procedure codes for which there was consensus of public 
support and for which complete tabular and indexing changes would be 
made by May 2019 would be included in the October 1, 2019 update to the 
ICD-10-CM diagnosis and ICD-10-PCS procedure code sets. As discussed in 
earlier sections of the preamble of this proposed rule, there are new, 
revised, and deleted ICD-10-CM diagnosis codes and ICD-10-PCS procedure 
codes that are captured in 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, and 
Table 6F.--Revised Procedure Code Titles for this proposed rule, which 
are available via the internet on the CMS website at: http://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/AcuteInpatientPPS/index.html. The code titles are adopted as part of 
the ICD-10 (previously ICD-9-CM) Coordination and Maintenance Committee 
process. Therefore, although we make the code titles available for the 
IPPS proposed rule, they are not subject to comment in the proposed 
rule. Because of the length of these tables, they are not published in 
the Addendum to the proposed rule. Rather, they are available via the 
internet as discussed in section VI. of the Addendum to this proposed 
rule.
    Live Webcast recordings of the discussions of the diagnosis and 
procedure codes at the Committee's September 11-12, 2018 meeting can be 
obtained from the CMS website at: http://cms.hhs.gov/Medicare/Coding/ICD9ProviderDiagnosticCodes/index.html?redirect=/icd9ProviderDiagnosticCodes/03_meetings.asp. The live webcast 
recordings of the discussions of the diagnosis and procedure codes at 
the Committee's March 5-6, 2019 meeting can be obtained from the CMS 
website at: https://www.cms.gov/Medicare/Coding/ICD10/C-and-M-Meeting-Materials.html.
    The materials for the discussions relating to diagnosis codes at 
the September 11-12 2018 meeting and March 5-6, 2019 meeting can be 
found at: http://www.cdc.gov/nchs/icd/icd10cm_maintenance.html. These 
websites also provide detailed information about the Committee, 
including information on requesting a new code, attending a Committee 
meeting, and timeline requirements and meeting dates.
    We encourage commenters to address suggestions on coding issues 
involving diagnosis codes to: Donna Pickett, Co-Chairperson, ICD-10 
Coordination and Maintenance Committee, NCHS, Room 2402, 3311 Toledo 
Road, Hyattsville, MD 20782. Comments may be sent by Email to: 
[email protected].
    Questions and comments concerning the procedure codes should be 
submitted via Email to: ICDProcedure [email protected].
    In the September 7, 2001 final rule implementing the IPPS new 
technology add-on payments (66 FR 46906), we indicated we would attempt 
to include proposals for procedure codes that would describe new 
technology discussed and approved at the Spring meeting as part of the 
code revisions effective the following October.
    Section 503(a) of Public Law 108-173 included a requirement for 
updating diagnosis and procedure codes twice a year instead of a single 
update on October 1 of each year. This requirement was included as part 
of the amendments to the Act relating to recognition of new technology 
under the IPPS. Section 503(a) amended section 1886(d)(5)(K) of the Act 
by adding a clause (vii) which states that the Secretary shall provide 
for the addition of new diagnosis and procedure codes on April 1 of 
each year, but the addition of such codes shall not require the 
Secretary to adjust the payment (or diagnosis-related group 
classification) until the fiscal year that begins after such date. This 
requirement improves the recognition of new technologies under the IPPS 
by providing information on these new technologies

[[Page 19255]]

at an earlier date. Data will be available 6 months earlier than would 
be possible with updates occurring only once a year on October 1.
    While section 1886(d)(5)(K)(vii) of the Act states that the 
addition of new diagnosis and procedure codes on April 1 of each year 
shall not require the Secretary to adjust the payment, or DRG 
classification, under section 1886(d) of the Act until the fiscal year 
that begins after such date, we have to update the DRG software and 
other systems in order to recognize and accept the new codes. We also 
publicize the code changes and the need for a mid-year systems update 
by providers to identify the new codes. Hospitals also have to obtain 
the new code books and encoder updates, and make other system changes 
in order to identify and report the new codes.
    The ICD-10 (previously the ICD-9-CM) Coordination and Maintenance 
Committee holds its meetings in the spring and fall in order to update 
the codes and the applicable payment and reporting systems by October 1 
of each year. Items are placed on the agenda for the Committee meeting 
if the request is received at least 3 months prior to the meeting. This 
requirement allows time for staff to review and research the coding 
issues and prepare material for discussion at the meeting. It also 
allows time for the topic to be publicized in meeting announcements in 
the Federal Register as well as on the CMS website. A complete addendum 
describing details of all diagnosis and procedure coding changes, both 
tabular and index, is published on the CMS and NCHS websites in June of 
each year. Publishers of coding books and software use this information 
to modify their products that are used by health care providers. This 
5-month time period has proved to be necessary for hospitals and other 
providers to update their systems.
    A discussion of this timeline and the need for changes are included 
in the December 4-5, 2005 ICD-9-CM Coordination and Maintenance 
Committee Meeting minutes. The public agreed that there was a need to 
hold the fall meetings earlier, in September or October, in order to 
meet the new implementation dates. The public provided comment that 
additional time would be needed to update hospital systems and obtain 
new code books and coding software. There was considerable concern 
expressed about the impact this April update would have on providers.
    In the FY 2005 IPPS final rule, we implemented section 
1886(d)(5)(K)(vii) of the Act, as added by section 503(a) of Public Law 
108-173, by developing a mechanism for approving, in time for the April 
update, diagnosis and procedure code revisions needed to describe new 
technologies and medical services for purposes of the new technology 
add-on payment process. We also established the following process for 
making these determinations. Topics considered during the Fall ICD-10 
(previously ICD-9-CM) Coordination and Maintenance Committee meeting 
are considered for an April 1 update if a strong and convincing case is 
made by the requestor at the Committee's public meeting. The request 
must identify the reason why a new code is needed in April for purposes 
of the new technology process. The participants at the meeting and 
those reviewing the Committee meeting materials and live webcast are 
provided the opportunity to comment on this expedited request. All 
other topics are considered for the October 1 update. Participants at 
the Committee meeting are encouraged to comment on all such requests. 
There were not any requests approved for an expedited April l, 2019 
implementation of a code at the September 11-12, 2018 Committee 
meeting. Therefore, there were not any new codes for implementation on 
April 1, 2019.
    ICD-9-CM addendum and code title information is published on the 
CMS website at: http://www.cms.hhs.gov/Medicare/Coding/ICD9ProviderDiagnosticCodes/index.html?redirect=/icd9ProviderDiagnosticCodes/01overview.asp#TopofPage. ICD-10-CM and 
ICD-10-PCS addendum and code title information is published on the CMS 
website at: http://www.cms.gov/Medicare/Coding/ICD10/index.html. CMS 
also sends copies of all ICD-10-CM and ICD-10-PCS coding changes to its 
Medicare contractors for use in updating their systems and providing 
education to providers.
    Information on ICD-10-CM diagnosis codes, along with the Official 
ICD-10-CM Coding Guidelines, can also be found on the CDC website at: 
http://www.cdc.gov/nchs/icd/icd10.htm. Additionally, information on 
new, revised, and deleted ICD-10-CM diagnosis and ICD-10-PCS procedure 
codes is provided to the AHA for publication in the Coding Clinic for 
ICD-10. AHA also distributes coding update information to publishers 
and software vendors.
    The following chart shows the number of ICD-10-CM and ICD-10-PCS 
codes and code changes since FY 2016 when ICD-10 was implemented.

  Total Number of Codes and Changes in Total Number of Codes per Fiscal
                   Year ICD-10-CM and ICD-10-PCS Codes
------------------------------------------------------------------------
                     Fiscal year                       Number    Change
------------------------------------------------------------------------
FY 2016:
  ICD-10-CM.........................................    69,823  ........
  ICD-10-PCS........................................    71,974  ........
FY 2017:
  ICD-10-CM.........................................    71,486    +1,663
  ICD-10-PCS........................................    75,789    +3,815
FY 2018:
  ICD-10-CM.........................................    71,704      +218
  ICD-10-PCS........................................    78,705    +2,916
FY 2019:
  ICD-10-CM.........................................    71,932      +228
  ICD-10-PCS........................................    78,881      +176
FY 2020 (Proposed):
  ICD-10-CM.........................................    72,184      +252
  ICD-10-PCS........................................    77,221    -1,660
------------------------------------------------------------------------

    As mentioned previously, the public is provided the opportunity to 
comment on any requests for new diagnosis or procedure codes discussed 
at the ICD-10 Coordination and Maintenance Committee meeting.
19. Replaced Devices Offered Without Cost or With a Credit
a. Background
    In the FY 2008 IPPS final rule with comment period (72 FR 47246 
through 47251), we discussed the topic of Medicare payment for devices 
that are replaced without cost or where credit for a replaced device is 
furnished to the hospital. We implemented a policy to reduce a 
hospital's IPPS payment for certain MS-DRGs where the implantation of a 
device that subsequently failed or was recalled determined the base MS-
DRG assignment. At that time, we specified that we will reduce a 
hospital's IPPS payment for those MS-DRGs where the hospital received a 
credit for a replaced device equal to 50 percent or more of the cost of 
the device.
    In the FY 2012 IPPS/LTCH PPS final rule (76 FR 51556 through 
51557), we clarified this policy to state that the policy applies if 
the hospital received a credit equal to 50 percent or more of the cost 
of the replacement device and issued instructions to hospitals 
accordingly.
b. Proposed Changes for FY 2020
    As discussed in section II.F.5.a. of the preamble of this proposed 
rule, for FY 2020, we are proposing to create new MS-DRGs 319 and 320 
(Other Endovascular Cardiac Valve Procedures with and without MCC, 
respectively) and to revise the title for MS-DRG 266 from 
``Endovascular Cardiac Valve Replacement with MCC'' to

[[Page 19256]]

``Endovascular Cardiac Valve Replacement and Supplement Procedures with 
MCC'' and the title for MS-DRG 267 from ``Endovascular Cardiac Valve 
Replacement without MCC'' to ``Endovascular Cardiac Valve Replacement 
and Supplement Procedures without MCC''.
    As stated in the FY 2016 IPPS/LTCH PPS proposed rule (80 FR 24409), 
we generally map new MS-DRGs onto the list when they are formed from 
procedures previously assigned to MS-DRGs that are already on the list. 
Currently, MS-DRGs 216 through 221 are on the list of MS-DRGs subject 
to the policy for payment under the IPPS for replaced devices offered 
without cost or with a credit as shown in the table below. A subset of 
the procedures currently assigned to MS-DRGs 216 through 221 is being 
proposed for assignment to proposed new MS-DRGs 319 and 320. Therefore, 
we are proposing that if the applicable proposed MS-DRG changes are 
finalized, we also would add proposed new MS-DRGs 319 and 320 to the 
list of MS-DRGs subject to the policy for payment under the IPPS for 
replaced devices offered without cost or with a credit and make 
conforming changes to the titles of MS-DRGs 266 and 267 as reflected in 
the table below. We also are proposing to continue to include the 
existing MS-DRGs currently subject to the policy as also displayed in 
the table below.

------------------------------------------------------------------------
            MDC                 MS-DRG              MS-DRG title
------------------------------------------------------------------------
Pre-MDC...................             001  Heart Transplant or Implant
                                             of Heart Assist System with
                                             MCC.
Pre-MDC...................             002  Heart Transplant or Implant
                                             of Heart Assist System
                                             without MCC.
1.........................             023  Craniotomy with Major Device
                                             Implant or Acute Complex
                                             CNS Principal Diagnosis
                                             with MCC or Chemotherapy
                                             Implant or Epilepsy with
                                             Neurostimulator.
1.........................             024  Craniotomy with Major Device
                                             Implant or Acute Complex
                                             CNS Principal Diagnosis
                                             without MCC.
1.........................             025  Craniotomy & Endovascular
                                             Intracranial Procedures
                                             with MCC.
1.........................             026  Craniotomy & Endovascular
                                             Intracranial Procedures
                                             with CC.
1.........................             027  Craniotomy & Endovascular
                                             Intracranial Procedures
                                             without CC/MCC.
1.........................             040  Peripheral, Cranial Nerve &
                                             Other Nervous System
                                             Procedures with MCC.
1.........................             041  Peripheral, Cranial Nerve &
                                             Other Nervous System
                                             Procedures with CC or
                                             Peripheral Neurostimulator.
1.........................             042  Peripheral, Cranial Nerve &
                                             Other Nervous System
                                             Procedures without CC/MCC.
3.........................             129  Major Head & Neck Procedures
                                             with CC/MCC or Major
                                             Device.
3.........................             130  Major Head & Neck Procedures
                                             without CC/MCC.
5.........................             215  Other Heart Assist System
                                             Implant.
5.........................             216  Cardiac Valve & Other Major
                                             Cardiothoracic Procedure
                                             with Cardiac
                                             Catheterization with MCC.
5.........................             217  Cardiac Valve & Other Major
                                             Cardiothoracic Procedure
                                             with Cardiac
                                             Catheterization with CC.
5.........................             218  Cardiac Valve & Other Major
                                             Cardiothoracic Procedure
                                             with Cardiac
                                             Catheterization without CC/
                                             MCC.
5.........................             219  Cardiac Valve & Other Major
                                             Cardiothoracic Procedure
                                             without Cardiac
                                             Catheterization with MCC.
5.........................             220  Cardiac Valve & Other Major
                                             Cardiothoracic Procedure
                                             without Cardiac
                                             Catheterization with CC.
5.........................             221  Cardiac Valve & Other Major
                                             Cardiothoracic Procedure
                                             without Cardiac
                                             Catheterization without CC/
                                             MCC.
5.........................             222  Cardiac Defibrillator
                                             Implant with Cardiac
                                             Catheterization with AMI/
                                             Heart Failure/Shock with
                                             MCC.
5.........................             223  Cardiac Defibrillator
                                             Implant with Cardiac
                                             Catheterization with AMI/
                                             Heart Failure/Shock without
                                             MCC.
5.........................             224  Cardiac Defibrillator
                                             Implant with Cardiac
                                             Catheterization without AMI/
                                             Heart Failure/Shock with
                                             MCC.
5.........................             225  Cardiac Defibrillator
                                             Implant with Cardiac
                                             Catheterization without AMI/
                                             Heart Failure/Shock without
                                             MCC.
5.........................             226  Cardiac Defibrillator
                                             Implant without Cardiac
                                             Catheterization with MCC.
5.........................             227  Cardiac Defibrillator
                                             Implant without Cardiac
                                             Catheterization without
                                             MCC.
5.........................             242  Permanent Cardiac Pacemaker
                                             Implant with MCC.
5.........................             243  Permanent Cardiac Pacemaker
                                             Implant with CC.
5.........................             244  Permanent Cardiac Pacemaker
                                             Implant without CC/MCC.
5.........................             245  AICD Generator Procedures.
5.........................             258  Cardiac Pacemaker Device
                                             Replacement with MCC.
5.........................             259  Cardiac Pacemaker Device
                                             Replacement without MCC.
5.........................             260  Cardiac Pacemaker Revision
                                             Except Device Replacement
                                             with MCC.
5.........................             261  Cardiac Pacemaker Revision
                                             Except Device Replacement
                                             with CC.
5.........................             262  Cardiac Pacemaker Revision
                                             Except Device Replacement
                                             without CC/MCC.
5.........................             265  AICD Lead Procedures.
5.........................             266  Endovascular Cardiac Valve
                                             Replacement and Supplement
                                             Procedures with MCC.
5.........................             267  Endovascular Cardiac Valve
                                             Replacement and Supplement
                                             Procedures without MCC.
5.........................             268  Aortic and Heart Assist
                                             Procedures Except Pulsation
                                             Balloon with MCC.
5.........................             269  Aortic and Heart Assist
                                             Procedures Except Pulsation
                                             Balloon without MCC.
5.........................             270  Other Major Cardiovascular
                                             Procedures with MCC.
5.........................             271  Other Major Cardiovascular
                                             Procedures with CC.
5.........................             272  Other Major Cardiovascular
                                             Procedures without CC/MCC.
5.........................             319  Other Endovascular Cardiac
                                             Valve Procedures with MCC.
5.........................             320  Other Endovascular Cardiac
                                             Valve Procedures without
                                             MCC.
8.........................             461  Bilateral or Multiple Major
                                             Joint Procedures of Lower
                                             Extremity with MCC.
8.........................             462  Bilateral or Multiple Major
                                             Joint Procedures of Lower
                                             Extremity without MCC.
8.........................             466  Revision of Hip or Knee
                                             Replacement with MCC.
8.........................             467  Revision of Hip or Knee
                                             Replacement with CC.
8.........................             468  Revision of Hip or Knee
                                             Replacement without CC/MCC.
8.........................             469  Major Hip and Knee Joint
                                             Replacement or Reattachment
                                             of Lower Extremity with MCC
                                             or Total Ankle Replacement.
8.........................             470  Major Hip and Knee Joint
                                             Replacement or Reattachment
                                             of Lower Extremity without
                                             MCC.
------------------------------------------------------------------------

    The final list of MS-DRGs subject to the IPPS policy for replaced 
devices offered without cost or with a credit will be included in the 
FY 2020 IPPS/LTCH PPS final rule and also will be issued to

[[Page 19257]]

providers in the form of a Change Request (CR).

G. Recalibration of the Proposed FY 2020 MS-DRG Relative Weights

1. Data Sources for Developing the Proposed Relative Weights
    In developing the proposed FY 2020 system of weights, we are 
proposing to use two data sources: Claims data and cost report data. As 
in previous years, the claims data source is the MedPAR file. This file 
is based on fully coded diagnostic and procedure data for all Medicare 
inpatient hospital bills. The FY 2018 MedPAR data used in this proposed 
rule include discharges occurring on October 1, 2017, through September 
30, 2018, based on bills received by CMS through December 31, 2018, 
from all hospitals subject to the IPPS and short-term, acute care 
hospitals in Maryland (which at that time were under a waiver from the 
IPPS). The FY 2018 MedPAR file used in calculating the proposed 
relative weights includes data for approximately 9,480,820 Medicare 
discharges from IPPS providers. Discharges for Medicare beneficiaries 
enrolled in a Medicare Advantage managed care plan are excluded from 
this analysis. These discharges are excluded when the MedPAR ``GHO 
Paid'' indicator field on the claim record is equal to ``1'' or when 
the MedPAR DRG payment field, which represents the total payment for 
the claim, is equal to the MedPAR ``Indirect Medical Education (IME)'' 
payment field, indicating that the claim was an ``IME only'' claim 
submitted by a teaching hospital on behalf of a beneficiary enrolled in 
a Medicare Advantage managed care plan. In addition, the December 31, 
2018 update of the FY 2018 MedPAR file complies with version 5010 of 
the X12 HIPAA Transaction and Code Set Standards, and includes a 
variable called ``claim type.'' Claim type ``60'' indicates that the 
claim was an inpatient claim paid as fee-for-service. Claim types 
``61,'' ``62,'' ``63,'' and ``64'' relate to encounter claims, Medicare 
Advantage IME claims, and HMO no-pay claims. Therefore, the calculation 
of the proposed relative weights for FY 2020 also excludes claims with 
claim type values not equal to ``60.'' The data exclude CAHs, including 
hospitals that subsequently became CAHs after the period from which the 
data were taken. We note that the proposed FY 2020 relative weights are 
based on the ICD-10-CM diagnosis codes and ICD-10-PCS procedure codes 
from the FY 2018 MedPAR claims data, grouped through the ICD-10 version 
of the proposed FY 2020 GROUPER (Version 37).
    The second data source used in the cost-based relative weighting 
methodology is the Medicare cost report data files from the HCRIS. 
Normally, we use the HCRIS dataset that is 3 years prior to the IPPS 
fiscal year. Specifically, we used cost report data from the December 
31, 2018 update of the FY 2017 HCRIS for calculating the proposed FY 
2020 cost-based relative weights.
2. Methodology for Calculation of the Proposed Relative Weights
    As we explain in section II.E.2. of the preamble of this proposed 
rule, we calculated the proposed FY 2020 relative weights based on 19 
CCRs, as we did for FY 2019. The methodology we are proposing to use to 
calculate the FY 2020 MS-DRG cost-based relative weights based on 
claims data in the FY 2018 MedPAR file and data from the FY 2017 
Medicare cost reports is as follows:
     To the extent possible, all the claims were regrouped 
using the proposed FY 2020 MS-DRG classifications discussed in sections 
II.B. and II.F. of the preamble of this proposed rule.
     The transplant cases that were used to establish the 
proposed relative weights for heart and heart-lung, liver and/or 
intestinal, and lung transplants (MS-DRGs 001, 002, 005, 006, and 007, 
respectively) were limited to those Medicare-approved transplant 
centers that have cases in the FY 2018 MedPAR file. (Medicare coverage 
for heart, heart-lung, liver and/or intestinal, and lung transplants is 
limited to those facilities that have received approval from CMS as 
transplant centers.)
     Organ acquisition costs for kidney, heart, heart-lung, 
liver, lung, pancreas, and intestinal (or multivisceral organs) 
transplants continue to be paid on a reasonable cost basis. Because 
these acquisition costs are paid separately from the prospective 
payment rate, it is necessary to subtract the acquisition charges from 
the total charges on each transplant bill that showed acquisition 
charges before computing the average cost for each MS-DRG and before 
eliminating statistical outliers.
     Claims with total charges or total lengths of stay less 
than or equal to zero were deleted. Claims that had an amount in the 
total charge field that differed by more than $30.00 from the sum of 
the routine day charges, intensive care charges, pharmacy charges, 
implantable devices charges, supplies and equipment charges, therapy 
services charges, operating room charges, cardiology charges, 
laboratory charges, radiology charges, other service charges, labor and 
delivery charges, inhalation therapy charges, emergency room charges, 
blood and blood products charges, anesthesia charges, cardiac 
catheterization charges, CT scan charges, and MRI charges were also 
deleted.
     At least 92.3 percent of the providers in the MedPAR file 
had charges for 14 of the 19 cost centers. All claims of providers that 
did not have charges greater than zero for at least 14 of the 19 cost 
centers were deleted. In other words, a provider must have no more than 
five blank cost centers. If a provider did not have charges greater 
than zero in more than five cost centers, the claims for the provider 
were deleted.
     Statistical outliers were eliminated by removing all cases 
that were beyond 3.0 standard deviations from the geometric mean of the 
log distribution of both the total charges per case and the total 
charges per day for each MS-DRG.
     Effective October 1, 2008, because hospital inpatient 
claims include a POA indicator field for each diagnosis present on the 
claim, only for purposes of relative weight-setting, the POA indicator 
field was reset to ``Y'' for ``Yes'' for all claims that otherwise have 
an ``N'' (No) or a ``U'' (documentation insufficient to determine if 
the condition was present at the time of inpatient admission) in the 
POA field.
    Under current payment policy, the presence of specific HAC codes, 
as indicated by the POA field values, can generate a lower payment for 
the claim. Specifically, if the particular condition is present on 
admission (that is, a ``Y'' indicator is associated with the diagnosis 
on the claim), it is not a HAC, and the hospital is paid for the higher 
severity (and, therefore, the higher weighted MS-DRG). If the 
particular condition is not present on admission (that is, an ``N'' 
indicator is associated with the diagnosis on the claim) and there are 
no other complicating conditions, the DRG GROUPER assigns the claim to 
a lower severity (and, therefore, the lower weighted MS-DRG) as a 
penalty for allowing a Medicare inpatient to contract a HAC. While the 
POA reporting meets policy goals of encouraging quality care and 
generates program savings, it presents an issue for the relative 
weight-setting process. Because cases identified as HACs are likely to 
be more complex than similar cases that are not identified as HACs, the 
charges associated with HAC cases are likely to be higher as well. 
Therefore, if the higher charges of these HAC claims are grouped into 
lower severity MS-DRGs prior to the relative

[[Page 19258]]

weight-setting process, the relative weights of these particular MS-
DRGs would become artificially inflated, potentially skewing the 
relative weights. In addition, we want to protect the integrity of the 
budget neutrality process by ensuring that, in estimating payments, no 
increase to the standardized amount occurs as a result of lower overall 
payments in a previous year that stem from using weights and case-mix 
that are based on lower severity MS-DRG assignments. If this would 
occur, the anticipated cost savings from the HAC policy would be lost.
    To avoid these problems, we reset the POA indicator field to ``Y'' 
only for relative weight-setting purposes for all claims that otherwise 
have an ``N'' or a ``U'' in the POA field. This resetting ``forced'' 
the more costly HAC claims into the higher severity MS-DRGs as 
appropriate, and the relative weights calculated for each MS-DRG more 
closely reflect the true costs of those cases.
    In addition, in the FY 2013 IPPS/LTCH PPS final rule, for FY 2013 
and subsequent fiscal years, we finalized a policy to treat hospitals 
that participate in the Bundled Payments for Care Improvement (BPCI) 
initiative the same as prior fiscal years for the IPPS payment modeling 
and ratesetting process without regard to hospitals' participation 
within these bundled payment models (77 FR 53341 through 53343). 
Specifically, because acute care hospitals participating in the BPCI 
Initiative still receive IPPS payments under section 1886(d) of the 
Act, we include all applicable data from these subsection (d) hospitals 
in our IPPS payment modeling and ratesetting calculations as if the 
hospitals were not participating in those models under the BPCI 
initiative. We refer readers to the FY 2013 IPPS/LTCH PPS final rule 
for a complete discussion on our final policy for the treatment of 
hospitals participating in the BPCI initiative in our ratesetting 
process. For additional information on the BPCI initiative, we refer 
readers to the CMS' Center for Medicare and Medicaid Innovation's 
website at: http://innovation.cms.gov/initiatives/Bundled-Payments/index.html and to section IV.H.4. of the preamble of the FY 2013 IPPS/
LTCH PPS final rule (77 FR 53341 through 53343).
    The participation of hospitals in the BPCI initiative concluded on 
September 30, 2018. The participation of hospitals in the Bundled 
Payments for Care Improvement (BPCI) Advanced model started on October 
1, 2018. The BPCI Advanced model, tested under the authority of section 
3021 of the Affordable Care Act (codified at section 1115A of the Act), 
is comprised of a single payment and risk track, which bundles payments 
for multiple services beneficiaries receive during a Clinical Episode. 
Acute care hospitals may participate in BPCI Advanced in one of two 
capacities: As a model Participant or as a downstream Episode 
Initiator. Regardless of the capacity in which they participate in the 
BPCI Advanced model, participating acute care hospitals will continue 
to receive IPPS payments under section 1886(d) of the Act. Acute care 
hospitals that are Participants also assume financial and quality 
performance accountability for Clinical Episodes in the form of a 
reconciliation payment. For additional information on the BPCI Advanced 
model, we refer readers to the BPCI Advanced web page on the CMS Center 
for Medicare and Medicaid Innovation's website at: https://innovation.cms.gov/initiatives/bpci-advanced/. Consistent with our 
policy for FY 2019, and consistent with how we have treated hospitals 
that participated in the BPCI Initiative, for FY 2020, we continue to 
believe it is appropriate to include all applicable data from the 
subsection (d) hospitals participating in the BPCI Advanced model in 
our IPPS payment modeling and ratesetting calculations because, as 
noted above, these hospitals are still receiving IPPS payments under 
section 1886(d) of the Act.
    The charges for each of the proposed 19 cost groups for each claim 
were standardized to remove the effects of differences in proposed area 
wage levels, IME and DSH payments, and for hospitals located in Alaska 
and Hawaii, the applicable proposed cost-of-living adjustment. Because 
hospital charges include charges for both operating and capital costs, 
we standardized total charges to remove the effects of differences in 
proposed geographic adjustment factors, cost-of-living adjustments, and 
DSH payments under the capital IPPS as well. Charges were then summed 
by MS-DRG for each of the proposed 19 cost groups so that each MS-DRG 
had 19 standardized charge totals. Statistical outliers were then 
removed. These charges were then adjusted to cost by applying the 
proposed national average CCRs developed from the FY 2017 cost report 
data.
    The proposed 19 cost centers that we used in the proposed relative 
weight calculation are shown in the following table. The table shows 
the lines on the cost report and the corresponding revenue codes that 
we used to create the proposed 19 national cost center CCRs. If 
stakeholders have comments about the groupings in this table, we may 
consider those comments as we finalize our policy.
    We are inviting public comments on our proposals related to 
recalibration of the proposed FY 2020 relative weights and the changes 
in relative weights from FY 2019.
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BILLING CODE 4120-01-C
3. Development of Proposed National Average CCRs
    We developed the proposed national average CCRs as follows:
    Using the FY 2017 cost report data, we removed CAHs, Indian Health 
Service hospitals, all-inclusive rate hospitals, and cost reports that 
represented time periods of less than 1 year (365 days). We included 
hospitals located in Maryland because we include their charges in our 
claims database. We then created CCRs for each provider for each cost 
center (see prior table for line items used in the calculations) and 
removed any CCRs that were greater

[[Page 19272]]

than 10 or less than 0.01. We normalized the departmental CCRs by 
dividing the CCR for each department by the total CCR for the hospital 
for the purpose of trimming the data. We then took the logs of the 
normalized cost center CCRs and removed any cost center CCRs where the 
log of the cost center CCR was greater or less than the mean log plus/
minus 3 times the standard deviation for the log of that cost center 
CCR. Once the cost report data were trimmed, we calculated a Medicare-
specific CCR. The Medicare-specific CCR was determined by taking the 
Medicare charges for each line item from Worksheet D-3 and deriving the 
Medicare-specific costs by applying the hospital-specific departmental 
CCRs to the Medicare-specific charges for each line item from Worksheet 
D-3. Once each hospital's Medicare-specific costs were established, we 
summed the total Medicare-specific costs and divided by the sum of the 
total Medicare-specific charges to produce national average, charge-
weighted CCRs.
    After we multiplied the total charges for each MS-DRG in each of 
the proposed 19 cost centers by the corresponding national average CCR, 
we summed the 19 ``costs'' across each proposed MS-DRG to produce a 
total standardized cost for the proposed MS-DRG. The average 
standardized cost for each proposed MS-DRG was then computed as the 
total standardized cost for the proposed MS-DRG divided by the 
transfer-adjusted case count for the proposed MS-DRG. The average cost 
for each proposed MS-DRG was then divided by the national average 
standardized cost per case to determine the proposed relative weight.
    The proposed FY 2020 cost-based relative weights were then 
normalized by a proposed adjustment factor of 1.788337 so that the 
average case weight after recalibration was equal to the average case 
weight before recalibration. The proposed normalization adjustment is 
intended to ensure that recalibration by itself neither increases nor 
decreases total payments under the IPPS, as required by section 
1886(d)(4)(C)(iii) of the Act.
    The proposed 19 national average CCRs for FY 2020 are as follows:

------------------------------------------------------------------------
                          Group                                 CCR
------------------------------------------------------------------------
Routine Days............................................           0.433
Intensive Days..........................................           0.362
Drugs...................................................           0.191
Supplies & Equipment....................................           0.301
Implantable Devices.....................................           0.308
Therapy Services........................................           0.297
Laboratory..............................................           0.109
Operating Room..........................................           0.175
Cardiology..............................................           0.099
Cardiac Catheterization.................................           0.106
Radiology...............................................           0.140
MRIs....................................................           0.073
CT Scans................................................           0.035
Emergency Room..........................................           0.154
Blood and Blood Products................................           0.282
Other Services..........................................           0.344
Labor & Delivery........................................           0.369
Inhalation Therapy......................................           0.151
Anesthesia..............................................           0.077
------------------------------------------------------------------------

    Since FY 2009, the relative weights have been based on 100 percent 
cost weights based on our MS-DRG grouping system.
    When we recalibrated the DRG weights for previous years, we set a 
threshold of 10 cases as the minimum number of cases required to 
compute a reasonable weight. We are proposing to use that same case 
threshold in recalibrating the proposed MS-DRG relative weights for FY 
2020. Using data from the FY 2018 MedPAR file, there were 8 MS-DRGs 
that contain fewer than 10 cases. For FY 2020, because we do not have 
sufficient MedPAR data to set accurate and stable cost relative weights 
for these low-volume MS-DRGs, we are proposing to compute relative 
weights for the proposed low-volume MS-DRGs by adjusting their final FY 
2019 relative weights by the percentage change in the average weight of 
the cases in other MS-DRGs from FY 2019 to FY 2020. The crosswalk table 
is shown below.

------------------------------------------------------------------------
    Low-volume  MS-DRG         MS-DRG title        Crosswalk to MS-DRG
------------------------------------------------------------------------
338......................  Appendectomy with    Final FY 2019 relative
                            Complicated          weight (adjusted by
                            Principal            percent change in
                            Diagnosis with MCC.  average weight of the
                                                 cases in other MS-
                                                 DRGs).
789......................  Neonates, Died or    Final FY 2019 relative
                            Transferred to       weight (adjusted by
                            Another Acute Care   percent change in
                            Facility.            average weight of the
                                                 cases in other MS-
                                                 DRGs).
790......................  Extreme Immaturity   Final FY 2019 relative
                            or Respiratory       weight (adjusted by
                            Distress Syndrome,   percent change in
                            Neonate.             average weight of the
                                                 cases in other MS-
                                                 DRGs).
791......................  Prematurity with     Final FY 2019 relative
                            Major Problems.      weight (adjusted by
                                                 percent change in
                                                 average weight of the
                                                 cases in other MS-
                                                 DRGs).
792......................  Prematurity without  Final FY 2019 relative
                            Major Problems.      weight (adjusted by
                                                 percent change in
                                                 average weight of the
                                                 cases in other MS-
                                                 DRGs).
793......................  Full-Term Neonate    Final FY 2019 relative
                            with Major           weight (adjusted by
                            Problems.            percent change in
                                                 average weight of the
                                                 cases in other MS-
                                                 DRGs).
794......................  Neonate with Other   Final FY 2019 relative
                            Significant          weight (adjusted by
                            Problems.            percent change in
                                                 average weight of the
                                                 cases in other MS-
                                                 DRGs).
795......................  Normal Newborn.....  Final FY 2019 relative
                                                 weight (adjusted by
                                                 percent change in
                                                 average weight of the
                                                 cases in other MS-
                                                 DRGs).
------------------------------------------------------------------------

H. Proposed Add-On Payments for New Services and Technologies for FY 
2020

1. Background
    Sections 1886(d)(5)(K) and (L) of the Act establish a process of 
identifying and ensuring adequate payment for new medical services and 
technologies (sometimes collectively referred to in this section as 
``new technologies'') under the IPPS. Section 1886(d)(5)(K)(vi) of the 
Act specifies that a medical service or technology will be considered 
new if it meets criteria established by the Secretary after notice and 
opportunity for public comment. Section 1886(d)(5)(K)(ii)(I) of the Act 
specifies that a new medical service or technology may be considered 
for new technology add-on payment if, based on the estimated costs 
incurred with respect to discharges involving such service or 
technology, the DRG prospective payment rate otherwise applicable to 
such discharges under this subsection is inadequate. We note that, 
beginning with discharges occurring in FY 2008, CMS transitioned from 
CMS-DRGs to MS-DRGs. The regulations at 42 CFR 412.87 implement these 
provisions and specify three criteria for a new medical service or 
technology to receive the additional payment: (1) The medical service 
or technology must be new; (2) the medical service or technology must 
be costly such that the

[[Page 19273]]

DRG rate otherwise applicable to discharges involving the medical 
service or technology is determined to be inadequate; and (3) the 
service or technology must demonstrate a substantial clinical 
improvement over existing services or technologies. Below we highlight 
some of the major statutory and regulatory provisions relevant to the 
new technology add-on payment criteria, as well as other information. 
For a complete discussion on the new technology add-on payment 
criteria, we refer readers to the FY 2012 IPPS/LTCH PPS final rule (76 
FR 51572 through 51574).
    Under the first criterion, as reflected in Sec.  412.87(b)(2), a 
specific medical service or technology will be considered ``new'' for 
purposes of new medical service or technology add-on payments until 
such time as Medicare data are available to fully reflect the cost of 
the technology in the MS-DRG weights through recalibration. We note 
that we do not consider a service or technology to be new if it is 
substantially similar to one or more existing technologies. That is, 
even if a medical product receives a new FDA approval or clearance, it 
may not necessarily be considered ``new'' for purposes of new 
technology add-on payments if it is ``substantially similar'' to 
another medical product that was approved or cleared by FDA and has 
been on the market for more than 2 to 3 years. In the FY 2010 IPPS/RY 
2010 LTCH PPS final rule (74 FR 43813 through 43814), we established 
criteria for evaluating whether a new technology is substantially 
similar to an existing technology, specifically: (1) Whether a product 
uses the same or a similar mechanism of action to achieve a therapeutic 
outcome; (2) whether a product is assigned to the same or a different 
MS-DRG; and (3) whether the new use of the technology involves the 
treatment of the same or similar type of disease and the same or 
similar patient population. If a technology meets all three of these 
criteria, it would be considered substantially similar to an existing 
technology and would not be considered ``new'' for purposes of new 
technology add-on payments. For a detailed discussion of the criteria 
for substantial similarity, we refer readers to the FY 2006 IPPS final 
rule (70 FR 47351 through 47352), and the FY 2010 IPPS/LTCH PPS final 
rule (74 FR 43813 through 43814).
    Under the second criterion, Sec.  412.87(b)(3) further provides 
that, to be eligible for the add-on payment for new medical services or 
technologies, the MS-DRG prospective payment rate otherwise applicable 
to discharges involving the new medical service or technology must be 
assessed for adequacy. Under the cost criterion, consistent with the 
formula specified in section 1886(d)(5)(K)(ii)(I) of the Act, to assess 
the adequacy of payment for a new technology paid under the applicable 
MS-DRG prospective payment rate, we evaluate whether the charges for 
cases involving the new technology exceed certain threshold amounts. 
The MS-DRG threshold amounts used in evaluating new technology add-on 
payment applications for FY 2020 are presented in a data file that is 
available, along with the other data files associated with the FY 2019 
IPPS/LTCH PPS final rule and correction notice, on the CMS website at: 
https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/AcuteInpatientPPS/FY2019-IPPS-Final-Rule-Home-Page-Items/FY2019-IPPS-Final-Rule-Data-Files.html?DLPage=1&DLEntries=10&DLSort=0&DLSortDir=ascending. As 
finalized in the FY 2019 IPPS/LTCH PPS final rule (83 FR 41275), 
beginning with FY 2020, we include the thresholds applicable to the 
next fiscal year (previously included in Table 10 of the annual IPPS/
LTCH PPS proposed and final rules) in the data files associated with 
the prior fiscal year. Accordingly, the proposed thresholds for 
applications for new technology add-on payments for FY 2021 are 
presented in a data file that is available on the CMS website, along 
with the other data files associated with this FY 2020 proposed rule, 
by clicking on the FY 2020 IPPS Proposed Rule Home Page at: https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/AcuteInpatientPPS/index.html.
    In the September 7, 2001 final rule that established the new 
technology add-on payment regulations (66 FR 46917), we discussed the 
issue of whether the Health Insurance Portability and Accountability 
Act (HIPAA) Privacy Rule at 45 CFR parts 160 and 164 applies to claims 
information that providers submit with applications for new medical 
service or technology add-on payments. We refer readers to the FY 2012 
IPPS/LTCH PPS final rule (76 FR 51573) for complete information on this 
issue.
    Under the third criterion, Sec.  412.87(b)(1) of our existing 
regulations provides that a new technology is an appropriate candidate 
for an additional payment when it represents an advance that 
substantially improves, relative to technologies previously available, 
the diagnosis or treatment of Medicare beneficiaries. For example, a 
new technology represents a substantial clinical improvement when it 
reduces mortality, decreases the number of hospitalizations or 
physician visits, or reduces recovery time compared to the technologies 
previously available. (We refer readers to the September 7, 2001 final 
rule for a more detailed discussion of this criterion (66 FR 46902). We 
also refer readers to section II.H.8. of the preamble of this proposed 
rule for a discussion of our proposed alternative inpatient new 
technology add-on payment pathway for transformative new devices.)
    The new medical service or technology add-on payment policy under 
the IPPS provides additional payments for cases with relatively high 
costs involving eligible new medical services or technologies, while 
preserving some of the incentives inherent under an average-based 
prospective payment system. The payment mechanism is based on the cost 
to hospitals for the new medical service or technology. Under Sec.  
412.88, if the costs of the discharge (determined by applying cost-to-
charge ratios (CCRs) as described in Sec.  412.84(h)) exceed the full 
DRG payment (including payments for IME and DSH, but excluding outlier 
payments), Medicare will make an add-on payment equal to the lesser of: 
(1) 50 percent of the estimated costs of the new technology or medical 
service (if the estimated costs for the case including the new 
technology or medical service exceed Medicare's payment); or (2) 50 
percent of the difference between the full DRG payment and the 
hospital's estimated cost for the case. Unless the discharge qualifies 
for an outlier payment, the additional Medicare payment is limited to 
the full MS-DRG payment plus 50 percent of the estimated costs of the 
new technology or medical service. We refer readers to section II.H.9. 
of the preamble of this proposed rule for a discussion of our proposed 
change to the calculation of the new technology add-on payment 
beginning in FY 2020, including our proposed amendments to Sec.  412.88 
of the regulations.
    Section 503(d)(2) of Public Law 108-173 provides that there shall 
be no reduction or adjustment in aggregate payments under the IPPS due 
to add-on payments for new medical services and technologies. 
Therefore, in accordance with section 503(d)(2) of Public Law 108-173, 
add-on payments for new medical services or technologies for FY 2005 
and later years have not been subjected to budget neutrality.
    In the FY 2009 IPPS final rule (73 FR 48561 through 48563), we 
modified our regulations at Sec.  412.87 to codify our longstanding 
practice of how CMS evaluates the eligibility criteria for new

[[Page 19274]]

medical service or technology add-on payment applications. That is, we 
first determine whether a medical service or technology meets the 
newness criterion, and only if so, do we then make a determination as 
to whether the technology meets the cost threshold and represents a 
substantial clinical improvement over existing medical services or 
technologies. We amended Sec.  412.87(c) to specify that all applicants 
for new technology add-on payments must have FDA approval or clearance 
by July 1 of the year prior to the beginning of the fiscal year for 
which the application is being considered.
    The Council on Technology and Innovation (CTI) at CMS oversees the 
agency's cross-cutting priority on coordinating coverage, coding and 
payment processes for Medicare with respect to new technologies and 
procedures, including new drug therapies, as well as promoting the 
exchange of information on new technologies and medical services 
between CMS and other entities. The CTI, composed of senior CMS staff 
and clinicians, was established under section 942(a) of Public Law 108-
173. The Council is co-chaired by the Director of the Center for 
Clinical Standards and Quality (CCSQ) and the Director of the Center 
for Medicare (CM), who is also designated as the CTI's Executive 
Coordinator.
    The specific processes for coverage, coding, and payment are 
implemented by CM, CCSQ, and the local Medicare Administrative 
Contractors (MACs) (in the case of local coverage and payment 
decisions). The CTI supplements, rather than replaces, these processes 
by working to assure that all of these activities reflect the agency-
wide priority to promote high-quality, innovative care. At the same 
time, the CTI also works to streamline, accelerate, and improve 
coordination of these processes to ensure that they remain up to date 
as new issues arise. To achieve its goals, the CTI works to streamline 
and create a more transparent coding and payment process, improve the 
quality of medical decisions, and speed patient access to effective new 
treatments. It is also dedicated to supporting better decisions by 
patients and doctors in using Medicare-covered services through the 
promotion of better evidence development, which is critical for 
improving the quality of care for Medicare beneficiaries.
    To improve the understanding of CMS' processes for coverage, 
coding, and payment and how to access them, the CTI has developed an 
``Innovator's Guide'' to these processes. The intent is to consolidate 
this information, much of which is already available in a variety of 
CMS documents and in various places on the CMS website, in a user 
friendly format. This guide was published in 2010 and is available on 
the CMS website at: https://www.cms.gov/Medicare/Coverage/CouncilonTechInnov/Downloads/Innovators-Guide-Master-7-23-15.pdf.
    As we indicated in the FY 2009 IPPS final rule (73 FR 48554), we 
invite any product developers or manufacturers of new medical services 
or technologies to contact the agency early in the process of product 
development if they have questions or concerns about the evidence that 
would be needed later in the development process for the agency's 
coverage decisions for Medicare.
    The CTI aims to provide useful information on its activities and 
initiatives to stakeholders, including Medicare beneficiaries, 
advocates, medical product manufacturers, providers, and health policy 
experts. Stakeholders with further questions about Medicare's coverage, 
coding, and payment processes, or who want further guidance about how 
they can navigate these processes, can contact the CTI at 
[email protected].
    We note that applicants for add-on payments for new medical 
services or technologies for FY 2021 must submit a formal request, 
including a full description of the clinical applications of the 
medical service or technology and the results of any clinical 
evaluations demonstrating that the new medical service or technology 
represents a substantial clinical improvement, along with a significant 
sample of data to demonstrate that the medical service or technology 
meets the high-cost threshold. Complete application information, along 
with final deadlines for submitting a full application, will be posted 
as it becomes available on the CMS website at: https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/AcuteInpatientPPS/newtech.html. To allow interested parties to identify the new medical 
services or technologies under review before the publication of the 
proposed rule for FY 2021, the CMS website also will post the tracking 
forms completed by each applicant. We note that the burden associated 
with this information collection requirement is the time and effort 
required to collect and submit the data in the formal request for add-
on payments for new medical services and technologies to CMS. The 
aforementioned burden is subject to the PRA; it is currently approved 
under OMB control number 0938-1347, which expires on December 31, 2020.
2. Public Input Before Publication of a Notice of Proposed Rulemaking 
on Add-On Payments
    Section 1886(d)(5)(K)(viii) of the Act, as amended by section 
503(b)(2) of Public Law 108-173, provides for a mechanism for public 
input before publication of a notice of proposed rulemaking regarding 
whether a medical service or technology represents a substantial 
clinical improvement or advancement. The process for evaluating new 
medical service and technology applications requires the Secretary to--
     Provide, before publication of a proposed rule, for public 
input regarding whether a new service or technology represents an 
advance in medical technology that substantially improves the diagnosis 
or treatment of Medicare beneficiaries;
     Make public and periodically update a list of the services 
and technologies for which applications for add-on payments are 
pending;
     Accept comments, recommendations, and data from the public 
regarding whether a service or technology represents a substantial 
clinical improvement; and
     Provide, before publication of a proposed rule, for a 
meeting at which organizations representing hospitals, physicians, 
manufacturers, and any other interested party may present comments, 
recommendations, and data regarding whether a new medical service or 
technology represents a substantial clinical improvement to the 
clinical staff of CMS.
    In order to provide an opportunity for public input regarding add-
on payments for new medical services and technologies for FY 2020 prior 
to publication of this FY 2020 IPPS/LTCH PPS proposed rule, we 
published a notice in the Federal Register on October 5, 2018 (83 FR 
50379), and held a town hall meeting at the CMS Headquarters Office in 
Baltimore, MD, on December 4, 2018. In the announcement notice for the 
meeting, we stated that the opinions and presentations provided during 
the meeting would assist us in our evaluations of applications by 
allowing public discussion of the substantial clinical improvement 
criterion for each of the FY 2020 new medical service and technology 
add-on payment applications before the publication of the FY 2020 IPPS/
LTCH PPS proposed rule.
    Approximately 100 individuals registered to attend the town hall 
meeting in person, while additional individuals listened over an open

[[Page 19275]]

telephone line. We also live-streamed the town hall meeting and posted 
the morning and afternoon sessions of the town hall on the CMS YouTube 
web page at: https://www.youtube.com/watch?v=4z1AhEuGHqQ and https://www.youtube.com/watch?v=m26Xj1EzbIY, respectively. We considered each 
applicant's presentation made at the town hall meeting, as well as 
written comments submitted on the applications that were received by 
the due date of December 14, 2018, in our evaluation of the new 
technology add-on payment applications for FY 2020 in this FY 2020 
IPPS/LTCH PPS proposed rule.
    In response to the published notice and the December 4, 2018 New 
Technology Town Hall meeting, we received written comments regarding 
the applications for FY 2020 new technology add-on payments. We note 
that we do not summarize comments that are unrelated to the 
``substantial clinical improvement'' criterion. As explained earlier 
and in the Federal Register notice announcing the New Technology Town 
Hall meeting (83 FR 50379 through 50381), the purpose of the meeting 
was specifically to discuss the substantial clinical improvement 
criterion in regard to pending new technology add-on payment 
applications for FY 2020. Therefore, we are not summarizing those 
written comments in this proposed rule that are unrelated to the 
substantial clinical improvement criterion. In section II.H.5. of the 
preamble of this FY 2020 IPPS/LTCH PPS proposed rule, we are 
summarizing comments regarding individual applications, or, if 
applicable, indicating that there were no comments received in response 
to the New Technology Town Hall meeting notice, at the end of each 
discussion of the individual applications.
    Comment: One commenter expressed appreciation for CMS' statements 
in the FY 2019 IPPS/LTCH PPS proposed rule (83 FR 20278 through 20279) 
relating to the similarity between data that satisfy the FDA's 
designations and data that satisfy the substantial clinical improvement 
criterion under the new technology add-on payment policy. The commenter 
stated that clarity was provided that will help future applicants 
understand which types of data can serve as the foundation for 
satisfying the substantial clinical improvement criterion. The 
commenter also expressed its appreciation that CMS further clarified 
that it accepts a wide range of data that would support the conclusion 
that the technology represents a substantial clinical improvement. The 
commenter explained that it interpreted CMS' statements to mean that 
CMS appreciates and considers the patient's experience and point-of-
view in its determination of a technology's substantial clinical 
improvement with respect to existing technologies, and stated that it 
hopes the agency will confirm this rationale in upcoming rulemaking.
    Response: We appreciate the commenter's support of our clarifying 
statements in the FY 2019 IPPS/LTCH PPS proposed rule. Additionally, we 
refer the commenter to the September 7, 2001 final rule for a more 
detailed discussion of the substantial clinical improvement criterion 
(66 FR 46902). We also refer readers to section II.H.8. of the preamble 
of this proposed rule for a discussion of our proposed alternative 
inpatient new technology add-on payment pathway for transformative new 
devices, and sections II.H.6. and II.H.7. of the preamble of this 
proposed rule for a discussion of and request for comment on potential 
revisions to the new technology add-on payment substantial clinical 
improvement criterion.
    Comment: Another commenter stated that the criteria for priority 
FDA review are very similar to the criteria to substantiate a 
technology's substantial clinical improvement under the new technology 
add-on payment policy and, therefore, devices used in the inpatient 
setting that are determined to be eligible for expedited review and 
approved by the FDA should automatically be considered as representing 
a substantial clinical improvement with respect to existing 
technologies, without further consideration by CMS.
    Response: We refer readers to our response to this and similar 
comments in the FY 2019 IPPS/LTCH PPS proposed rule (83 FR 20278 
through 20279).
    Comment: One commenter stated that an entity submitting an 
application for new technology add-on payments should be entitled to 
administrative review of an adverse determination by an official of the 
Department of Health and Human Services other than an official of the 
CMS. The commenter believed that this will provide a safeguard both for 
the manufacturer submitting an application, as well as for 
beneficiaries who would benefit from access to the innovative 
technology that is the subject of the new technology add-on payment 
application. The commenter further recommended that administrative 
review of an adverse determination should not preclude resubmission of 
a modified application at a later point in the future.
    Response: As discussed previously, the public has an opportunity at 
the New Technology Town Hall meeting to provide input regarding the 
substantial clinical improvement criterion for each new technology add-
on payment application under review for the upcoming fiscal year. We 
summarize each application in the IPPS/LTCH PPS proposed rule, and 
consider the public comments received in response to the proposed rule 
in determining whether to approve an application for new technology 
add-on payments. Furthermore, we also accept additional supplemental 
information on all new technology add-on payment applications 
summarized in the proposed rule through the end of the comment period 
for the annual IPPS/LTCH PPS proposed rule. We conduct a thorough 
review of all applications and, as described above, allow a wide range 
of data that would support the conclusion of a representation of 
substantial clinical improvement. We also note that an applicant may 
always resubmit an application for new technology add-on payments for a 
subsequent year following a denial of an application submitted for a 
prior fiscal year.
3. ICD-10-PCS Section ``X'' Codes for Certain New Medical Services and 
Technologies
    As discussed in the FY 2016 IPPS/LTCH PPS final rule (80 FR 49434), 
the ICD-10-PCS includes a new section containing the new Section ``X'' 
codes, which began being used with discharges occurring on or after 
October 1, 2015. Decisions regarding changes to ICD-10-PCS Section 
``X'' codes will be handled in the same manner as the decisions for all 
of the other ICD-10-PCS code changes. That is, proposals to create, 
delete, or revise Section ``X'' codes under the ICD-10-PCS structure 
will be referred to the ICD-10 Coordination and Maintenance Committee. 
In addition, several of the new medical services and technologies that 
have been, or may be, approved for new technology add-on payments may 
now, and in the future, be assigned a Section ``X'' code within the 
structure of the ICD-10-PCS. We posted ICD-10-PCS Guidelines on the CMS 
website at: http://www.cms.gov/Medicare/Coding/ICD10/2016-ICD-10-PCS-and-GEMs.html, including guidelines for ICD-10-PCS Section ``X'' codes. 
We encourage providers to view the material provided on ICD-10-PCS 
Section ``X'' codes.

[[Page 19276]]

4. Proposed FY 2020 Status of Technologies Approved for FY 2019 New 
Technology Add-On Payments
a. Defitelio[supreg] (Defibrotide)
    Jazz Pharmaceuticals submitted an application for new technology 
add-on payments for FY 2017 for defibrotide (Defitelio[supreg]), a 
treatment for patients who have been diagnosed with hepatic veno-
occlusive disease (VOD) with evidence of multi-organ dysfunction. VOD, 
also known as sinusoidal obstruction syndrome (SOS), is a potentially 
life-threatening complication of hematopoietic stem cell 
transplantation (HSCT), with an incidence rate of 8 percent to 15 
percent. Diagnoses of VOD range in severity from what has been 
classically defined as a disease limited to the liver (mild) and 
reversible, to a severe syndrome associated with multi-organ 
dysfunction or failure and death. Patients who have received treatment 
involving HSCT who develop VOD with multi-organ failure face an 
immediate risk of death, with a mortality rate of more than 80 percent 
when only supportive care is used. The applicant asserted that 
Defitelio[supreg] improves the survival rate of patients who have been 
diagnosed with VOD with multi-organ failure by 23 percent.
    Defitelio[supreg] received Orphan Drug Designation for the 
treatment of VOD in 2003 and for the prevention of VOD in 2007. It has 
been available to patients as an investigational drug through an 
Expanded Access Program since 2006. The applicant's New Drug 
Application (NDA) for Defitelio[supreg] received FDA approval on March 
30, 2016. The applicant confirmed that Defitelio[supreg] was not 
available on the U.S. market as of the FDA NDA approval date of March 
30, 2016. According to the applicant, commercial packaging could not be 
completed until the label for Defitelio[supreg] was finalized with FDA 
approval, and that commercial shipments of Defitelio[supreg] to 
hospitals and treatment centers began on April 4, 2016. Therefore, we 
agreed that, based on this information, the newness period for 
Defitelio[supreg] begins on April 4, 2016, the date of its first 
commercial availability.
    The applicant received approval to use unique ICD-10-PCS procedure 
codes to describe the use of Defitelio[supreg], with an effective date 
of October 1, 2016. The approved ICD-10-PCS procedure codes are: 
XW03392 (Introduction of defibrotide sodium anticoagulant into 
peripheral vein, percutaneous approach); and XW04392 (Introduction of 
defibrotide sodium anticoagulant into central vein, percutaneous 
approach). After evaluation of the newness, costs, and substantial 
clinical improvement criteria for new technology add-on payments for 
Defitelio[supreg] and consideration of the public comments we received 
in response to the FY 2017 IPPS/LTCH PPS proposed rule, we approved 
Defitelio[supreg] for new technology add-on payments for FY 2017 (81 FR 
56906). With the new technology add-on payment application, the 
applicant estimated that the average Medicare beneficiary would require 
a dosage of 25 mg/kg/day for a minimum of 21 days of treatment. The 
recommended dose is 6.25 mg/kg given as a 2-hour intravenous infusion 
every 6 hours. Dosing should be based on a patient's baseline body 
weight, which is assumed to be 70 kg for an average adult patient. All 
vials contain 200 mg at a cost of $825 per vial. Therefore, we 
determined that cases involving the use of the Defitelio[supreg] 
technology would incur an average cost per case of $151,800 (70 kg 
adult x 25 mg/kg/day x 21 days = 36,750 mg per patient/200 mg vial = 
184 vials per patient x $825 per vial = $151,800). Under existing Sec.  
412.88(a)(2), we limit new technology add-on payments to the lesser of 
50 percent of the average cost of the technology or 50 percent of the 
costs in excess of the MS-DRG payment for the case. As a result, the 
maximum new technology add-on payment amount for a case involving the 
use of Defitelio[supreg] is $75,900 for FY 2019.
    Our policy is that a medical service or technology may continue to 
be considered ``new'' for purposes of new technology add-on payments 
within 2 or 3 years after the point at which data begin to become 
available reflecting the inpatient hospital code assigned to the new 
service or technology. Our practice has been to begin and end new 
technology add-on payments on the basis of a fiscal year, and we have 
generally followed a guideline that uses a 6-month window before and 
after the start of the fiscal year to determine whether to extend the 
new technology add-on payment for an additional fiscal year. In 
general, we extend new technology add-on payments for an additional 
year only if the 3-year anniversary date of the product's entry onto 
the U.S. market occurs in the latter half of the fiscal year (70 FR 
47362).
    With regard to the newness criterion for Defitelio[supreg], we 
considered the beginning of the newness period to commence on the first 
day Defitelio[supreg] was commercially available (April 4, 2016). 
Because the 3-year anniversary date of the entry of the 
Defitelio[supreg] onto the U.S. market (April 4, 2019) will occur 
during FY 2019, we are proposing to discontinue new technology add-on 
payments for this technology for FY 2020. We are inviting public 
comments on our proposal to discontinue new technology add-on payments 
for Defitelio[supreg] for FY 2020.
b. Ustekinumab (Stelara[supreg])
    Janssen Biotech submitted an application for new technology add-on 
payments for the Stelara[supreg] induction therapy for FY 2018. 
Stelara[supreg] received FDA approval on September 23, 2016 as an 
intravenous (IV) infusion treatment for adult patients who have been 
diagnosed with moderately to severely active Crohn's disease (CD) who 
have failed or were intolerant to treatment using immunomodulators or 
corticosteroids, but never failed a tumor necrosis factor (TNF) 
blocker, or failed or were intolerant to treatment using one or more 
TNF blockers. Stelara[supreg] IV is intended for induction--
subcutaneous prefilled syringes are intended for maintenance dosing. 
Stelara[supreg] must be administered intravenously by a health care 
professional in either an inpatient hospital setting or an outpatient 
hospital setting.
    Stelara[supreg] for IV infusion is packaged in single 130 mg vials. 
Induction therapy consists of a single IV infusion dose using the 
following weight-based dosing regimen: Patients weighing 55 kg or less 
than (<) 55 kg are administered 260 mg of Stelara[supreg] (2 vials); 
patients weighing more than (>) 55 kg, but 85 kg or less than (<) 85 kg 
are administered 390 mg of Stelara[supreg] (3 vials); and patients 
weighing more than (>) 85 kg are administered 520 mg of Stelara[supreg] 
(4 vials). An average dose of Stelara[supreg] administered through IV 
infusion is 390 mg (3 vials). Maintenance doses of Stelara[supreg] are 
administered at 90 mg, subcutaneously, at 8-week intervals and may 
occur in the outpatient hospital setting.
    CD is an inflammatory bowel disease of unknown etiology, 
characterized by transmural inflammation of the gastrointestinal (GI) 
tract. Symptoms of CD may include fatigue, prolonged diarrhea with or 
without bleeding, abdominal pain, weight loss and fever. CD can affect 
any part of the GI tract including the mouth, esophagus, stomach, small 
intestine, and large intestine. Most commonly used pharmacologic 
treatments for CD include antibiotics, mesalamines, corticosteroids, 
immunomodulators, tumor necrosis alpha (TNF[alpha]) inhibitors, and 
anti-integrin agents. Surgery may be necessary for some patients who 
have been diagnosed with CD in which conventional therapies have 
failed. After evaluation of the newness, costs,

[[Page 19277]]

and substantial clinical improvement criteria for new technology add-on 
payments for Stelara[supreg] and consideration of the public comments 
we received in response to the FY 2018 IPPS/LTCH PPS proposed rule, we 
approved Stelara[supreg] for new technology add-on payments for FY 2018 
(82 FR 38129). Cases involving Stelara[supreg] that are eligible for 
new technology add-on payments are identified by ICD-10-PCS procedure 
code XW033F3 (Introduction of other New Technology therapeutic 
substance into peripheral vein, percutaneous approach, new technology 
group 3). With the new technology add-on payment application, the 
applicant estimated that the average Medicare beneficiary would require 
a dosage of 390 mg (3 vials) at a hospital acquisition cost of $1,600 
per vial (for a total of $4,800). Under existing Sec.  412.88(a)(2), we 
limit new technology add-on payments to the lesser of 50 percent of the 
average cost of the technology or 50 percent of the costs in excess of 
the MS-DRG payment for the case. As a result, the maximum new 
technology add-on payment amount for a case involving the use of 
Stelara[supreg] is $2,400 for FY 2019.
    With regard to the newness criterion for Stelara[supreg], we 
considered the beginning of the newness period to commence when 
Stelara[supreg] received FDA approval as an IV infusion treatment for 
Crohn's disease (CD) on September 23, 2016. Because the 3-year 
anniversary date of the entry of Stelara[supreg] onto the U.S. market 
(September 23, 2019) will occur during FY 2019, we are proposing to 
discontinue new technology add-on payments for this technology for FY 
2020. We are inviting public comments on our proposal to discontinue 
new technology add-on payments for Stelara[supreg] for FY 2020.
c. Bezlotoxumab (ZINPLAVATM)
    Merck & Co., Inc. submitted an application for new technology add-
on payments for ZINPLAVATM for FY 2018. 
ZINPLAVATM is indicated as a treatment to reduce recurrence 
of Clostridium difficile infection (CDI) in adult patients who are 
receiving antibacterial drug treatment for a diagnosis of CDI and who 
are at high risk for CDI recurrence. ZINPLAVATM is not 
indicated for the treatment of the presenting episode of CDI and is not 
an antibacterial drug. ZINPLAVATM should only be used in 
conjunction with an antibacterial drug treatment for CDI.
    Clostridium difficile (C-diff) is a disease-causing anaerobic, 
spore forming bacterium that affects the gastrointestinal (GI) tract. 
Some people carry the C-diff bacterium in their intestines, but never 
develop symptoms of an infection. The difference between asymptomatic 
colonization and disease is caused primarily by the production of an 
enterotoxin (Toxin A) and/or a cytotoxin (Toxin B). The presence of 
either or both toxins can lead to symptomatic CDI, which is defined as 
the acute onset of diarrhea with a documented infection with toxigenic 
C-diff. The GI tract contains millions of bacteria, commonly referred 
to as ``normal flora'' or ``good bacteria,'' which play a role in 
protecting the body from infection. Antibiotics can kill these good 
bacteria and allow C-diff to multiply and release toxins that damage 
the cells lining the intestinal wall, resulting in a CDI. CDI is a 
leading cause of hospital-associated gastrointestinal illnesses. 
Persons at increased risk for CDI include people who are currently on 
or who have recently been treated with antibiotics, people who have 
encountered current or recent hospitalization, people who are older 
than 65 years, immunocompromised patients, and people who have recently 
had a diagnosis of CDI. CDI symptoms include, but are not limited to, 
diarrhea, abdominal pain, and fever. CDI symptoms range in severity 
from mild (abdominal discomfort, loose stools) to severe (profuse, 
watery diarrhea, severe abdominal pain, and high fevers). Severe CDI 
can be life-threatening and, in rare cases, can cause bowel rupture, 
sepsis and organ failure. CDI is responsible for 14,000 deaths per year 
in the United States.
    C-diff produces two virulent, pro-inflammatory toxins, Toxin A and 
Toxin B, which target host colonic endothelial cells by binding to 
endothelial cell surface receptors via combined repetitive oligopeptide 
(CROP) domains. These toxins cause the release of inflammatory 
cytokines leading to intestinal fluid secretion and intestinal 
inflammation. The applicant asserted that ZINPLAVATM targets 
Toxin B sites within the CROP domain rather than the C-diff organism 
itself. According to the applicant, by targeting C-diff Toxin B, 
ZINPLAVATM neutralizes Toxin B, prevents large intestine 
endothelial cell inflammation, symptoms associated with CDI, and 
reduces the recurrence of CDI. ZINPLAVATM received FDA 
approval on October 21, 2016, as a treatment to reduce the recurrence 
of CDI in adult patients receiving antibacterial drug treatment for CDI 
and who are at high risk of CDI recurrence. As previously stated, 
ZINPLAVATM is not indicated for the treatment of CDI. 
ZINPLAVATM is not an antibacterial drug, and should only be 
used in conjunction with an antibacterial drug treatment for CDI. 
ZINPLAVATM became commercially available on February 10, 
2017. Therefore, the newness period for ZINPLAVATM began on 
February 10, 2017. The applicant submitted a request for a unique ICD-
10-PCS procedure code and was granted approval for the following 
procedure codes: XW033A3 (Introduction of bezlotoxumab monoclonal 
antibody, into peripheral vein, percutaneous approach, new technology 
group 3) and XW043A3 (Introduction of bezlotoxumab monoclonal antibody, 
into central vein, percutaneous approach, new technology group 3).
    After evaluation of the newness, costs, and substantial clinical 
improvement criteria for new technology add-on payments for 
ZINPLAVATM and consideration of the public comments we 
received in response to the FY 2018 IPPS/LTCH PPS proposed rule, we 
approved ZINPLAVATM for new technology add-on payments for 
FY 2018 (82 FR 38119). With the new technology add-on payment 
application, the applicant estimated that the average Medicare 
beneficiary would require a dosage of 10 mg/kg of ZINPLAVATM 
administered as an IV infusion over 60 minutes as a single dose. 
According to the applicant, the WAC for one dose is $3,800. Under 
existing Sec.  412.88(a)(2), we limit new technology add-on payments to 
the lesser of 50 percent of the average cost of the technology or 50 
percent of the costs in excess of the MS-DRG payment for the case. As a 
result, the maximum new technology add-on payment amount for a case 
involving the use of ZINPLAVATM is $1,900 for FY 2019.
    With regard to the newness criterion for ZINPLAVATM, we 
considered the beginning of the newness period to commence on February 
10, 2017. As discussed previously in this section, in general, we 
extend new technology add-on payments for an additional year only if 
the 3-year anniversary date of the product's entry onto the U.S. market 
occurs in the latter half of the upcoming fiscal year. Because the 3-
year anniversary date of the entry of ZINPLAVATM onto the 
U.S. market (February 10, 2020) will occur in the first half of FY 
2020, we are proposing to discontinue new technology add-on payments 
for this technology for FY 2020. We are inviting public comments on our 
proposal to discontinue new technology add-on payments for 
ZINPLAVATM for FY 2020.

[[Page 19278]]

d. KYMRIAH[supreg] (Tisagenlecleucel) and YESCARTA[supreg] 
(Axicabtagene Ciloleucel)
    Two manufacturers, Novartis Pharmaceuticals Corporation and Kite 
Pharma, Inc., submitted separate applications for new technology add-on 
payments for FY 2019 for KYMRIAH[supreg] (tisagenlecleucel) and 
YESCARTA[supreg] (axicabtagene ciloleucel), respectively. Both of these 
technologies are CD-19-directed T-cell immunotherapies used for the 
purposes of treating patients with aggressive variants of non-Hodgkin 
lymphoma (NHL).
    On May 1, 2018, Novartis Pharmaceuticals Corporation received FDA 
approval for KYMRIAH[supreg]'s second indication, the treatment of 
adult patients with relapsed or refractory (r/r) large B-cell lymphoma 
after two or more lines of systemic therapy including diffuse large B-
cell lymphoma (DLBCL) not otherwise specified, high grade B-cell 
lymphoma and DLBCL arising from follicular lymphoma. On October 18, 
2017, Kite Pharma, Inc. received FDA approval for the use of 
YESCARTA[supreg] indicated for the treatment of adult patients with r/r 
large B-cell lymphoma after two or more lines of systemic therapy, 
including DLBCL not otherwise specified, primary mediastinal large B-
cell lymphoma, high grade B-cell lymphoma, and DLBCL arising from 
follicular lymphoma.
    Procedures involving the KYMRIAH[supreg] and YESCARTA[supreg] 
therapies are both reported using the following ICD-10-PCS procedure 
codes: XW033C3 (Introduction of engineered autologous chimeric antigen 
receptor t-cell immunotherapy into peripheral vein, percutaneous 
approach, new technology group 3); and XW043C3 (Introduction of 
engineered autologous chimeric antigen receptor t-cell immunotherapy 
into central vein, percutaneous approach, new technology group 3). In 
the FY 2019 IPPS/LTCH PPS final rule, we finalized our proposal to 
assign cases reporting these ICD-10-PCS procedure codes to Pre-MDC MS-
DRG 016 for FY 2019 and to revise the title of this MS-DRG to 
Autologous Bone Marrow Transplant with CC/MCC or T-cell Immunotherapy. 
We refer readers to section II.F.2.d. of the preamble of the FY 2019 
IPPS/LTCH PPS final rule for a complete discussion of these final 
policies (83 FR 41172 through 41174).
    With respect to the newness criterion, according to both 
applicants, KYMRIAH[supreg] and YESCARTA[supreg] are the first CAR T-
cell immunotherapies of their kind. As discussed in the FY 2019 IPPS/
LTCH PPS proposed and final rules, because potential cases representing 
patients who may be eligible for treatment using KYMRIAH[supreg] and 
YESCARTA[supreg] would group to the same MS-DRGs (because the same ICD-
10-CM diagnosis codes and ICD-10-PCS procedures codes are used to 
report treatment using either KYMRIAH[supreg] or YESCARTA[supreg]), and 
we believed that these technologies are intended to treat the same or 
similar disease in the same or similar patient population, and are 
purposed to achieve the same therapeutic outcome using the same or 
similar mechanism of action, we believed these two technologies are 
substantially similar to each other and that it was appropriate to 
evaluate both technologies as one application for new technology add-on 
payments under the IPPS. For these reasons, we stated that we intended 
to make one determination regarding approval for new technology add-on 
payments that would apply to both applications, and in accordance with 
our policy, would use the earliest market availability date submitted 
as the beginning of the newness period for both KYMRIAH[supreg] and 
YESCARTA[supreg].
    As summarized in the FY 2019 IPPS/LTCH PPS final rule, we received 
comments from the applicants for KYMRIAH[supreg] and YESCARTA[supreg] 
regarding whether KYMRIAH[supreg] and YESCARTA[supreg] were 
substantially similar to each other. The applicant for YESCARTA[supreg] 
stated that it believed each technology consists of notable differences 
in the construction, as well as manufacturing processes and successes 
that may lead to differences in activity. The applicant encouraged CMS 
to evaluate YESCARTA[supreg] as a separate new technology add-on 
payment application and approve separate new technology add-on payments 
for YESCARTA[supreg], effective October 1, 2018, and to not move 
forward with a single new technology add-on payment evaluation 
determination that covers both CAR T-cell therapies, YESCARTA[supreg] 
and KYMRIAH[supreg]. The applicant for KYMRIAH[supreg] indicated that, 
based on FDA's approval, it agreed with CMS that KYMRIAH[supreg] is 
substantially similar to YESCARTA[supreg], as defined by the new 
technology add-on payment application evaluation criteria. We refer 
readers to the FY 2019 IPPS/LTCH PPS final rule for a more detailed 
summary of these and other public comments we received regarding 
substantial similarity for KYMRIAH[supreg] and YESCARTA[supreg].
    After consideration of the public comments we received and for the 
reasons discussed in the FY 2019 IPPS/LTCH PPS final rule, we stated 
that we believed that KYMRIAH[supreg] and YESCARTA[supreg] are 
substantially similar to one another. We also noted that for FY 2019, 
there was no payment impact regarding this determination of substantial 
similarity because the cost of the technologies is the same. However, 
we stated that we welcomed additional comments in future rulemaking 
regarding whether KYMRIAH[supreg] and YESCARTA[supreg] are 
substantially similar and intended to revisit this issue in the FY 2020 
IPPS/LTCH PPS proposed rule. For the reasons discussed in the FY 2019 
IPPS/LTCH PPS final rule, we continue to believe that KYMRIAH[supreg] 
and YESCARTA[supreg] are substantially similar to each other. We note 
that for FY 2020, the pricing for KYMRIAH[supreg] and YESCARTA[supreg] 
remains the same and, therefore, for FY 2020, there would continue to 
be no payment impact regarding the determination that the two 
technologies are substantially similar to each other. Similar to last 
year, we welcome public comments regarding whether KYMRIAH[supreg] and 
YESCARTA[supreg] are substantially similar to each other. We refer 
readers to the FY 2019 IPPS/LTCH PPS final rule for a complete 
discussion on newness and substantial similarity regarding 
KYMRIAH[supreg] and YESCARTA[supreg].
    After evaluation of the newness, costs, and substantial clinical 
improvement criteria for new technology add-on payments for 
KYMRIAH[supreg] and YESCARTA[supreg] and consideration of the public 
comments we received in response to the FY 2019 IPPS/LTCH PPS proposed 
rule, we approved new technology add-on payments for KYMRIAH[supreg] 
and YESCARTA[supreg] for FY 2019 (83 FR 41299). Cases involving 
KYMRIAH[supreg] or YESCARTA[supreg] that are eligible for new 
technology add-on payments are identified by ICD-10-PCS procedure codes 
XW033C3 or XW043C3. The applicants for both KYMRIAH[supreg] and 
YESCARTA[supreg] estimated that the average cost for an administered 
dose of KYMRIAH[supreg] or YESCARTA[supreg] is $373,000. Under existing 
Sec.  412.88(a)(2), we limit new technology add-on payments to the 
lesser of 50 percent of the average cost of the technology or 50 
percent of the costs in excess of the MS-DRG payment for the case. As a 
result, for FY 2019, the maximum new technology add-on payment for a 
case involving the use of KYMRIAH[supreg] or YESCARTA[supreg] is 
$186,500.
    As stated above, our policy is that a medical service or technology 
may continue to be considered ``new'' for purposes of new technology 
add-on payments within 2 or 3 years after the point at which data begin 
to become available reflecting the inpatient hospital code assigned to 
the new service or technology. With regard to the newness criterion for 
KYMRIAH[supreg] and YESCARTA[supreg], as discussed in the FY

[[Page 19279]]

2019 IPPS/LTCH PPS final rule, according to the applicant for 
YESCARTA[supreg], the first commercial shipment of YESCARTA[supreg] was 
received by a certified treatment center on November 22, 2017. As 
stated above, we use the earliest market availability date submitted as 
the beginning of the newness period for both KYMRIAH[supreg] and 
YESCARTA[supreg]. Therefore, we consider the beginning of the newness 
period for both KYMRIAH[supreg] and YESCARTA[supreg] to commence 
November 22, 2017. Because the 3-year anniversary date of the entry of 
the technology onto the U.S. market (November 22, 2020) will occur 
after FY 2020, we are proposing to continue new technology add-on 
payments for KYMRIAH[supreg] and YESCARTA[supreg] for FY 2020. Under 
the proposed change to the calculation of the new technology add-on 
payment amount discussed in section II.H.9. of the preamble of this 
proposed rule, we are proposing that the maximum new technology add-on 
payment amount for a case involving the use of KYMRIAH[supreg] and 
YESCARTA[supreg] would be increased to $242,450 for FY 2020; that is, 
65 percent of the average cost of the technology. However, if we do not 
finalize the proposed change to the calculation of the new technology 
add-on payment amount, we are proposing that the maximum new technology 
add-on payment for a case involving KYMRIAH[supreg] or YESCARTA[supreg] 
would remain at $186,500 for FY 2020. We are inviting public comments 
on our proposals to continue new technology add-on payments for 
KYMRIAH[supreg] and YESCARTA[supreg] for FY 2020.
    For the reasons discussed in section II.F.2.c. of this proposed 
rule, we are proposing not to modify the current MS-DRG assignment for 
cases reporting CAR T-cell therapies for FY 2020. Alternatively, we are 
seeking public comments on payment alternatives for CAR T-cell 
therapies. We also are inviting public comments on how these payment 
alternatives would affect access to care, as well as how they affect 
incentives to encourage lower drug prices, which is a high priority for 
this Administration. As discussed in the FY 2019 IPPS/LTCH PPS final 
rule (83 FR 41172 through 41174), we are considering approaches and 
authorities to encourage value-based care and lower drug prices. We are 
soliciting public comments on how the effective dates of any potential 
payment methodology alternatives, if any were to be adopted, may 
intersect and affect future participation in any such alternative 
approaches. Such payment alternatives could include adjusting the CCRs 
used to calculate new technology add-on payments for cases involving 
the use of KYMRIAH[supreg] and YESCARTA[supreg]. We note that we also 
considered this payment alternative for FY 2019, as discussed in the FY 
2019 IPPS/LTCH PPS final rule (83 FR 41172 through 41174), and are 
revisiting this approach given the additional experience with CAR T-
cell therapy being provided in hospitals paid under the IPPS and in 
IPPS-excluded cancer hospitals. We also are requesting public comments 
on other payment alternatives for these cases, including eliminating 
the use of CCRs in calculating the new technology add-on payments for 
cases involving the use of KYMRIAH[supreg] and YESCARTA[supreg] by 
making a uniform add-on payment that equals the proposed maximum add-on 
payment, that is, 65 percent of the cost of the technology (in 
accordance with the proposed increase in the calculation of the maximum 
new technology add-on payment amount), which in this instance would be 
$242,450; and/or using a higher percentage than the proposed 65 percent 
to calculate the maximum new technology add-on payment amount. If we 
were to finalize any such changes to the new technology add-on payment 
for cases involving the use of KYMRIAH[supreg] and YESCARTA[supreg], we 
would also revise our proposed amendments to Sec.  412.88 accordingly.
e. VYXEOSTM (Cytarabine and Daunorubicin Liposome for 
Injection)
    Jazz Pharmaceuticals, Inc. submitted an application for new 
technology add-on payments for the VYXEOSTM technology for 
FY 2019. VYXEOSTM was approved by FDA on August 3, 2017, for 
the treatment of adults with newly diagnosed therapy-related acute 
myeloid leukemia (t-AML) or AML with myelodysplasia-related changes 
(AML-MRC).
    Treatment of AML diagnoses usually consists of two phases; 
remission induction and post-remission therapy. Phase one, remission 
induction, is aimed at eliminating as many myeloblasts as possible. The 
most common used remission induction regimens for AML diagnoses are the 
``7+3'' regimens using an antineoplastic and an anthracycline. 
Cytarabine and daunorubicin are two commonly used drugs for ``7+3'' 
remission induction therapy. Cytarabine is continuously administered 
intravenously over the course of 7 days, while daunorubicin is 
intermittently administered intravenously for the first 3 days. The 
``7+3'' regimen typically achieves a 70 to 80 percent complete 
remission (CR) rate in most patients under 60 years of age.
    VYXEOSTM is a nano-scale liposomal formulation 
containing a fixed combination of cytarabine and daunorubicin in a 5:1 
molar ratio. This formulation was developed by the applicant using a 
proprietary system known as CombiPlex. According to the applicant, 
CombiPlex addresses several fundamental shortcomings of conventional 
combination regimens, specifically the conventional ``7+3'' free drug 
dosing, as well as the challenges inherent in combination drug 
development, by identifying the most effective synergistic molar ratio 
of the drugs being combined in vitro, and fixing this ratio in a nano-
scale drug delivery complex to maintain the optimized combination after 
administration and ensuring exposure of this ratio to the tumor.
    After evaluation of the newness, costs, and substantial clinical 
improvement criteria for new technology add-on payments for 
VYXEOSTM and consideration of the public comments we 
received in response to the FY 2019 IPPS/LTCH PPS proposed rule, we 
approved VYXEOSTM for new technology add-on payments for FY 
2019 (83 FR 41304). Cases involving VYXEOSTM that are 
eligible for new technology add-on payments are identified by ICD-10-
PCS procedure codes XW033B3 (Introduction of cytarabine and 
caunorubicin liposome antineoplastic into peripheral vein, percutaneous 
approach, new technology group 3) or XW043B3 (Introduction of 
cytarabine and daunorubicin liposome antineoplastic into central vein, 
percutaneous approach, new technology group 3). In its application, the 
applicant estimated that the average cost of a single vial for 
VYXEOSTM is $7,750 (daunorubicin 44 mg/m\2\ and cytarabine 
100 mg/m\2\). As discussed in the FY 2019 IPPS/LTCH PPS final rule (83 
FR 41305), we computed a maximum average of 9.4 vials used in the 
inpatient hospital setting with the maximum average cost for 
VYXEOSTM used in the inpatient hospital setting equaling 
$72,850 ($7,750 cost per vial * 9.4 vials). Under existing Sec.  
412.88(a)(2), we limit new technology add-on payments to the lesser of 
50 percent of the average cost of the technology or 50 percent of the 
costs in excess of the MS-DRG payment for the case. As a result, the 
maximum new technology add-on payment for a case involving the use of 
VYXEOSTM is $36,425 for FY 2019.
    With regard to the newness criterion for VYXEOSTM, we 
consider the beginning of the newness period to commence when 
VYXEOSTM was approved by the FDA (August 3, 2017). As 
discussed previously in this section,

[[Page 19280]]

in general, we extend new technology add-on payments for an additional 
year only if the 3-year anniversary date of the product's entry onto 
the U.S. market occurs in the latter half of the upcoming fiscal year. 
Because the 3-year anniversary date of the entry of the 
VYXEOSTM onto the U.S. market (August 3, 2020) will occur in 
the second half of FY 2020, we are proposing to continue new technology 
add-on payments for this technology for FY 2020. Under the proposed 
change to the calculation of the new technology add-on payment amount 
discussed in section II.H.9. of the preamble of this proposed rule, we 
are proposing that the maximum new technology add-on payment amount for 
a case involving the use of VYXEOSTM would be $47,353.50 for 
FY 2020; that is, 65 percent of the average cost of the technology. 
However, if we do not finalize the proposed change to the calculation 
of the new technology add-on payment amount, we are proposing that the 
maximum new technology add-on payment for a case involving 
VYXEOSTM would remain at $36,425 for FY 2020. We are 
inviting public comments on our proposals to continue new technology 
add-on payments for VYXEOSTM for FY 2020.
f. VABOMERETM (Meropenem-Vaborbactam)
    Melinta Therapeutics, Inc., submitted an application for new 
technology add-on payments for VABOMERETM for FY 2019. 
VABOMERETM is indicated for use in the treatment of adult 
patients who have been diagnosed with complicated urinary tract 
infections (cUTIs), including pyelonephritis, caused by designated 
susceptible bacteria. VABOMERETM received FDA approval on 
August 29, 2017.
    After evaluation of the newness, costs, and substantial clinical 
improvement criteria for new technology add-on payments for 
VABOMERETM and consideration of the public comments we 
received in response to the FY 2019 IPPS/LTCH PPS proposed rule, we 
approved VABOMERETM for new technology add-on payments for 
FY 2019 (83 FR 41311). We noted in the FY 2019 IPPS/LTCH PPS final rule 
(83 FR 41311) that the applicant did not request approval for the use 
of a unique ICD-10-PCS procedure code for VABOMERETM for FY 
2019 and that as a result, hospitals would be unable to uniquely 
identify the use of VABOMERETM on an inpatient claim using 
the typical coding of an ICD-10-PCS procedure code. We noted that in 
the FY 2013 IPPS/LTCH PPS final rule (77 FR 53352), with regard to the 
oral drug DIFICIDTM, we revised our policy to allow for the 
use of an alternative code set to identify oral medications where no 
inpatient procedure is associated for the purposes of new technology 
add-on payments. We established the use of a NDC as the alternative 
code set for this purpose and described our rationale for this 
particular code set. This change was effective for payments for 
discharges occurring on or after October 1, 2012. In the FY 2019 IPPS/
LTCH PPS final rule, we acknowledged that VABOMERETM is not 
an oral drug and is administered by IV infusion, but it was the first 
approved new technology aside from an oral drug with no uniquely 
assigned inpatient procedure code. Therefore, we believed that the 
circumstances with respect to the identification of eligible cases 
using VABOMERETM are similar to those addressed in the FY 
2013 IPPS/LTCH PPS final rule with regard to DIFICIDTM 
because we did not have current ICD-10-PCS code(s) to uniquely identify 
the use of VABOMERETM to make the new technology add-on 
payment. We stated that because we have determined that 
VABOMERETM has met all of the new technology add-on payment 
criteria and cases involving the use of VABOMERETM would be 
eligible for such payments for FY 2019, we needed to use an alternative 
coding method to identify these cases and make the new technology add-
on payment for use of VABOMERETM in FY 2019. Therefore, for 
the reasons discussed in the FY 2019 IPPS/LTCH PPS final rule and 
similar to the policy in the FY 2013 IPPS/LTCH PPS final rule, cases 
involving VABOMERETM that are eligible for new technology 
add-on payments for FY 2019 are identified by National Drug Codes (NDC) 
65293-0009-01 or 70842-0120-01 (VABOMERETM Meropenem-
Vaborbactam Vial).
    According to the applicant, the cost of VABOMERETM is 
$165 per vial. A patient receives two vials per dose and three doses 
per day. Therefore, the per-day cost of VABOMERETM is $990 
per patient. The duration of therapy, consistent with the Prescribing 
Information, is up to 14 days. Therefore, the estimated cost of 
VABOMERETM to the hospital, per patient, is $13,860. We 
stated in the FY 2019 IPPS/LTCH PPS final rule that based on the 
limited data from the product's launch, approximately 80 percent of 
VABOMERETM's usage would be in the inpatient hospital 
setting, and approximately 20 percent of VABOMERETM's usage 
may take place outside of the inpatient hospital setting. Therefore, 
the average number of days of VABOMERETM administration in 
the inpatient hospital setting is estimated at 80 percent of 14 days, 
or approximately 11.2 days. As a result, the total inpatient cost for 
VABOMERETM is $11,088 ($990 * 11.2 days). Under existing 
Sec.  412.88(a)(2), we limit new technology add-on payments to the 
lesser of 50 percent of the average cost of the technology or 50 
percent of the costs in excess of the MS-DRG payment for the case. As a 
result, the maximum new technology add-on payment for a case involving 
the use of VABOMERETM is $5,544 for FY 2019.
    With regard to the newness criterion for VABOMERETM, we 
consider the beginning of the newness period to commence when 
VABOMERETM received FDA approval (August 29, 2017). As 
discussed previously in this section, in general, we extend new 
technology add-on payments for an additional year only if the 3-year 
anniversary date of the product's entry onto the U.S. market occurs in 
the latter half of the upcoming fiscal year. Because the 3-year 
anniversary date of the entry of VABOMERETM onto the U.S. 
market (August 29, 2020) will occur during the second half of FY 2020, 
we are proposing to continue new technology add-on payments for this 
technology for FY 2020. Under the proposed change to the calculation of 
the new technology add-on payment amount discussed in section II.H.9. 
of the preamble of this proposed rule, we are proposing that the 
maximum new technology add-on payment amount for a case involving the 
use of VABOMERETM would be $7,207.20 for FY 2020; that is, 
65 percent of the average cost of the technology. However, if we do not 
finalize the proposed change to the calculation of the new technology 
add-on payment amount, we are proposing that the maximum new technology 
add-on payment for a case involving VABOMERETM would remain 
at $5,544 for FY 2020.
    As noted above, because there was no ICD-10-PCS code(s) to uniquely 
identify the use of VABOMERETM, we indicated in the FY 2019 
IPPS/LTCH PPS final rule that FY 2019 cases involving the use of 
VABOMERETM that are eligible for the FY 2019 new technology 
add-on payments would be identified using an NDC code. Subsequent to 
the issuance of that final rule, new ICD-10-PCS codes XW033N5 
(Introduction of Meropenem-vaborbactam Anti-infective into Peripheral 
Vein, Percutaneous Approach, New Technology Group 5) and XW043N5 
(Introduction of Meropenem-vaborbactam Anti-infective

[[Page 19281]]

into Central Vein, Percutaneous Approach, New Technology Group 5) were 
finalized to identify cases involving the use of VABOMERETM, 
effective October 1, 2019, as shown in Table 6B--New Procedure Codes, 
associated with this proposed rule and available via the internet on 
the CMS website at: http://www.cms.hhs.gov/Medicare/Medicare-Fee-for-Service-Payment/AcuteInpatientPPS/index.html. Therefore, for FY 2020, 
we will use these two ICD-10-PCS codes (XW033N5 and XW043N5) to 
identify cases involving the use of VABOMERETM that are 
eligible for the new technology add-on payments.
    While these newly approved ICD-10-PCS procedure codes can be used 
to uniquely identify cases involving the use of VABOMERETM 
for FY 2020, we are concerned that limiting new technology add-on 
payments only to cases reporting these new ICD-10-PCS codes for FY 2020 
could cause confusion because it is possible that some providers may 
inadvertently continue to bill some claims with the NDC codes rather 
than the new ICD-10-PCS codes. Therefore, for FY 2020, we are proposing 
that in addition to using the new ICD-10-PCS codes to identify cases 
involving the use of VABOMERETM, we would also continue to 
use the NDC codes to identify cases and make the new technology add-on 
payments. As a result, we are proposing that cases involving the use of 
VABOMERETM that are eligible for new technology add-on 
payments for FY 2020 would be identified by ICD-10-PCS codes XW033N5 or 
XW043N5 or NDCs 65293-0009-01 or 70842-0120-01.
    We are inviting public comments on our proposal to continue new 
technology add-on payments for VABOMERETM for FY 2020 and 
our proposals for identifying and making new technology add-on payments 
for cases involving the use of VABOMERETM.
g. remed[emacr][supreg] System
    Respicardia, Inc. submitted an application for new technology add-
on payments for the remed[emacr][supreg] System for FY 2019. According 
to the applicant, the remed[emacr][supreg] System is indicated for use 
as a transvenous phrenic nerve stimulator in the treatment of adult 
patients who have been diagnosed with moderate to severe central sleep 
apnea. The remed[emacr][supreg] System consists of an implantable pulse 
generator, and a stimulation and sensing lead. The pulse generator is 
placed under the skin, in either the right or left side of the chest, 
and it functions to monitor the patient's respiratory signals. A 
transvenous lead for unilateral stimulation of the phrenic nerve is 
placed either in the left pericardiophrenic vein or the right 
brachiocephalic vein, and a second lead to sense respiration is placed 
in the azygos vein. Both leads, in combination with the pulse 
generator, function to sense respiration and, when appropriate, 
generate an electrical stimulation to the left or right phrenic nerve 
to restore regular breathing patterns. On October 6, 2017, the 
remed[emacr][supreg] System was approved by the FDA as an implantable 
phrenic nerve stimulator indicated for the use in the treatment of 
adult patients who have been diagnosed with moderate to severe CSA. The 
device was available commercially upon FDA approval. Therefore, the 
newness period for the remed[emacr][supreg] System is considered to 
begin on October 6, 2017.
    After evaluation of the newness, costs, and substantial clinical 
improvement criteria for new technology add-on payments for the 
remed[emacr][supreg] System and consideration of the public comments we 
received in response to the FY 2019 IPPS/LTCH PPS proposed rule, we 
approved the remed[emacr][supreg] System for new technology add-on 
payments for FY 2019. Cases involving the use of the 
remed[emacr][supreg] System that are eligible for new technology add-on 
payments are identified by ICD-10-PCS procedures codes 0JH60DZ and 
05H33MZ in combination with procedure code 05H03MZ (Insertion of 
neurostimulator lead into right innominate vein, percutaneous approach) 
or 05H43MZ (Insertion of neurostimulator lead into left innominate 
vein, percutaneous approach). According to the application, the cost of 
the remed[emacr][supreg] System is $34,500 per patient. Under existing 
Sec.  412.88(a)(2), we limit new technology add-on payments to the 
lesser of 50 percent of the average cost of the technology or 50 
percent of the costs in excess of the MS-DRG payment for the case. As a 
result, the maximum new technology add-on payment for a case involving 
the use of the remed[emacr][supreg] System is $17,250 for FY 2019 (83 
FR 41320).
    With regard to the newness criterion for the remed[emacr][supreg] 
System, we consider the beginning of the newness period to commence 
when the remed[emacr][supreg] System was approved by the FDA on October 
6, 2017. Because the 3-year anniversary date of the entry of the 
remed[emacr][supreg] System onto the U.S. market (October 6, 2020) will 
occur after FY 2020, we are proposing to continue new technology add-on 
payments for this technology for FY 2020. Under the proposed change to 
the calculation of the new technology add-on payment amount discussed 
in section II.H.9. of the preamble of this proposed rule, we are 
proposing that the maximum new technology add-on payment amount for a 
case involving the use of the remed[emacr][supreg] System would be 
$22,425 for FY 2020; that is, 65 percent of the average cost of the 
technology. However, if we do not finalize the proposed change to the 
calculation of the new technology add-on payment amount, we are 
proposing that the maximum new technology add-on payment for a case 
involving the remed[emacr][supreg] System would remain at $17,250 for 
FY 2020. We are inviting public comments on our proposals to continue 
new technology add-on payments for the remed[emacr][supreg] System for 
FY 2020.
h. ZEMDRITM (Plazomicin)
    Achaogen, Inc. submitted an application for new technology add-on 
payments for ZEMDRITM (Plazomicin) for FY 2019. According to 
the applicant, ZEMDRITM (Plazomicin) is a next-generation 
aminoglycoside antibiotic, which has been found in vitro to have 
enhanced activity against many multi-drug resistant (MDR) gram-negative 
bacteria. The applicant received approval from the FDA on June 25, 
2018, for use in the treatment of adults who have been diagnosed with 
cUTIs, including pyelonephritis. After evaluation of the newness, 
costs, and substantial clinical improvement criteria for new technology 
add-on payments for ZEMDRITM and consideration of the public 
comments we received in response to the FY 2019 IPPS/LTCH PPS proposed 
rule, we approved ZEMDRITM for new technology add-on 
payments for FY 2019 (83 FR 41334). Cases involving ZEMDRITM 
that are eligible for new technology add-on payments are identified by 
ICD-10-PCS procedure codes XW033G4 (Introduction of Plazomicin anti-
infective into peripheral vein, percutaneous approach, new technology 
group 4) or XW043G4 (Introduction of Plazomicin anti-infective into 
central vein, percutaneous approach, new technology group 4). In its 
application, the applicant estimated that the average Medicare 
beneficiary would require a dosage of 15 mg/kg administered as an IV 
infusion as a single dose. According to the applicant, the WAC for one 
dose is $330, and patients will typically require 3 vials for the 
course of treatment with ZEMDRITM per day for an average 
duration of 5.5 days. Therefore, the total cost of ZEMDRITM 
per patient is $5,445. Under existing Sec.  412.88(a)(2), we limit new 
technology add-on payments to the

[[Page 19282]]

lesser of 50 percent of the average cost of the technology or 50 
percent of the costs in excess of the MS-DRG payment for the case. As a 
result, the maximum new technology add-on payment for a case involving 
the use of ZEMDRITM is $2,722.50 for FY 2019. With regard to 
the newness criterion for ZEMDRITM, we consider the 
beginning of the newness period to commence when ZEMDRITM 
was approved by the FDA on June 25, 2018. Because the 3-year 
anniversary date of the entry of ZEMDRITM onto the U.S. 
market (June 25, 2021) will occur after FY 2020, we are proposing to 
continue new technology add-on payments for this technology for FY 
2020. Under the proposed change to the calculation of the new 
technology add-on payment amount discussed in section II.H.9. of the 
preamble of this proposed rule, we are proposing that the maximum new 
technology add-on payment amount for a case involving the use of 
ZEMDRITM would be $3,539.25 for FY 2020; that is, 65 percent 
of the average cost of the technology. However, if we do not finalize 
the proposed change to the calculation of the new technology add-on 
payment amount, we are proposing that the maximum new technology add-on 
payment for a case involving ZEMDRITM would remain at 
$2,722.50 for FY 2020. We are inviting public comments on our proposals 
to continue new technology add-on payments for ZEMDRITM for 
FY 2020.
i. GIAPREZATM
    The La Jolla Pharmaceutical Company submitted an application for 
new technology add-on payments for GIAPREZATM for FY 2019. 
GIAPREZATM, a synthetic human angiotensin II, is 
administered through intravenous infusion to raise blood pressure in 
adult patients who have been diagnosed with septic or other 
distributive shock.
    GIAPREZATM was granted a Priority Review designation 
under FDA's expedited program and received FDA approval on December 21, 
2017, for the use in the treatment of adults who have been diagnosed 
with septic or other distributive shock as an intravenous infusion to 
increase blood pressure. After evaluation of the newness, costs, and 
substantial clinical improvement criteria for new technology add-on 
payments for GIAPREZATM and consideration of the public 
comments we received in response to the FY 2019 IPPS/LTCH PPS proposed 
rule, we approved GIAPREZATM for new technology add-on 
payments for FY 2019 (83 FR 41342). Cases involving 
GIAPREZATM that are eligible for new technology add-on 
payments are identified by ICD-10-PCS procedure codes XW033H4 
(Introduction of synthetic human angiotensin II into peripheral vein, 
percutaneous approach, new technology, group 4) or XW043H4 
(Introduction of synthetic human angiotensin II into central vein, 
percutaneous approach, new technology group 4). In its application, the 
applicant estimated that the average Medicare beneficiary would require 
a dosage of 20 ng/kg/min administered as an IV infusion over 48 hours, 
which would require 2 vials. The applicant explained that the WAC for 
one vial is $1,500, with each episode-of-care costing $3,000 per 
patient. Under existing Sec.  412.88(a)(2), we limit new technology 
add-on payments to the lesser of 50 percent of the average cost of the 
technology or 50 percent of the costs in excess of the MS-DRG payment 
for the case. As a result, the maximum new technology add-on payment 
for a case involving the use of GIAPREZATM is $1,500 for FY 
2019.
    With regard to the newness criterion for GIAPREZATM, we 
consider the beginning of the newness period to commence when 
GIAPREZATM was approved by the FDA (December 21, 2017). 
Because the 3-year anniversary date of the entry of 
GIAPREZATM onto the U.S. market (December 21, 2020) would 
occur after FY 2020, we are proposing to continue new technology add-on 
payments for this technology for FY 2020. Under the proposed change to 
the calculation of the new technology add-on payment discussed in 
section II.H.9. of the preamble of this proposed rule, we are proposing 
that the maximum new technology add-on payment amount for a case 
involving the use of GIAPREZATM would be $1,950 for FY 2020; 
that is, 65 percent of the average cost of the technology. However, if 
we do not finalize the proposed change to the calculation of the new 
technology add-on payment amount, we are proposing that the maximum new 
technology add-on payment for a case involving GIAPREZATM 
would remain at $1,500 for FY 2020. We are inviting public comments on 
our proposals to continue new technology add-on payments for 
GIAPREZATM for FY 2020.
j. Cerebral Protection System (Sentinel[supreg] Cerebral Protection 
System)
    Claret Medical, Inc. submitted an application for new technology 
add-on payments for the Cerebral Protection System (Sentinel[supreg] 
Cerebral Protection System) for FY 2019. According to the applicant, 
the Sentinel Cerebral Protection System is indicated for the use as an 
embolic protection (EP) device to capture and remove thrombus and 
debris while performing transcatheter aortic valve replacement (TAVR) 
procedures. The device is percutaneously delivered via the right radial 
artery and is removed upon completion of the TAVR procedure. The De 
Novo request for the Sentinel[supreg] Cerebral Protection System was 
granted by FDA on June 1, 2017 (DEN160043).
    After evaluation of the newness, costs, and substantial clinical 
improvement criteria for new technology add-on payments for the 
Sentinel[supreg] Cerebral Protection System and consideration of the 
public comments we received in response to the FY 2019 IPPS/LTCH PPS 
proposed rule, we approved the Sentinel[supreg] Cerebral Protection 
System for new technology add-on payments for FY 2019 (83 FR 41348). 
Cases involving the Sentinel[supreg] Cerebral Protection System that 
are eligible for new technology add-on payments are identified by ICD-
10-PCS code X2A5312 (Cerebral embolic filtration, dual filter in 
innominate artery and left common carotid artery, percutaneous 
approach). In its application, the applicant estimated that the cost of 
the Sentinel[supreg] Cerebral Protection System is $2,800. Under 
existing Sec.  412.88(a)(2), we limit new technology add-on payments to 
the lesser of 50 percent of the average cost of the technology or 50 
percent of the costs in excess of the MS-DRG payment for the case. As a 
result, the maximum new technology add-on payment for a case involving 
the use of the Sentinel[supreg] Cerebral Protection System is $1,400 
for FY 2019.
    With regard to the newness criterion for the Sentinel[supreg] 
Cerebral Protection System, we consider the beginning of the newness 
period to commence when the FDA granted the De Novo request for the 
Sentinel[supreg] Cerebral Protection System (June 1, 2017). As 
discussed previously in this section, in general, we extend new 
technology add-on payments for an additional year only if the 3-year 
anniversary date of the product's entry onto the U.S. market occurs in 
the latter half of the upcoming fiscal year. Because the 3-year 
anniversary date of the entry of the Sentinel[supreg] Cerebral 
Protection System onto the U.S. market (June 1, 2020) will occur in the 
second half of FY 2020, we are proposing to continue new technology 
add-on payments for this technology for FY 2020. Under the proposed 
change to the calculation of the new technology add-on payment amount 
discussed in section II.H.9. of the preamble of this proposed rule, we 
are proposing that the maximum new technology add-on payment amount for

[[Page 19283]]

a case involving the use of the Sentinel[supreg] Cerebral Protection 
System would be $1,820 for FY 2020; that is, 65 percent of the average 
cost of the technology. However, if we do not finalize the proposed 
change to the calculation of the new technology add-on payment amount, 
we are proposing that the maximum new technology add-on payment for a 
case involving the Sentinel[supreg] Cerebral Protection System would 
remain at $1,400 for FY 2020. We are inviting public comments on our 
proposals to continue new technology add-on payments for the 
Sentinel[supreg] Cerebral Protection System for FY 2020.
k. The AQUABEAM System (Aquablation)
    PROCEPT BioRobotics Corporation submitted an application for new 
technology add-on payments for the AQUABEAM System (Aquablation) for FY 
2019. According to the applicant, the AQUABEAM System is indicated for 
the use in the treatment of patients experiencing lower urinary tract 
symptoms caused by a diagnosis of benign prostatic hyperplasia (BPH). 
The AQUABEAM System consists of three main components: A console with 
two high-pressure pumps, a conformal surgical planning unit with trans-
rectal ultrasound imaging, and a single-use robotic hand-piece. The 
applicant reported that the AQUABEAM System provides the operating 
surgeon a multi-dimensional view, using both ultrasound image guidance 
and endoscopic visualization, to clearly identify the prostatic adenoma 
and plan the surgical resection area. Based on the planning inputs from 
the surgeon, the system's robot delivers Aquablation, an autonomous 
waterjet ablation therapy that enables targeted, controlled, heat-free 
and immediate removal of prostate tissue used for the purpose of 
treating lower urinary tract symptoms caused by a diagnosis of BPH. The 
combination of surgical mapping and robotically-controlled resection of 
the prostate is designed to offer predictable and reproducible 
outcomes, independent of prostate size, prostate shape or surgeon 
experience.
    The FDA granted the AQUABEAM System's De Novo request on December 
21, 2017, for use in the resection and removal of prostate tissue in 
males suffering from lower urinary tract symptoms (LUTS) due to benign 
prostatic hyperplasia. The applicant stated that the AQUABEAM System 
was made available on the U.S. market immediately after the FDA granted 
the De Novo request.
    After evaluation of the newness, costs, and substantial clinical 
improvement criteria for new technology add-on payments for the 
AQUABEAM System and consideration of the public comments we received in 
response to the FY 2019 IPPS/LTCH PPS proposed rule, we approved the 
AQUABEAM System for new technology add-on payments for FY 2019 (83 FR 
41355). Cases involving the AQUABEAM System that are eligible for new 
technology add-on payments are identified by ICD-10-PCS code XV508A4 
(Destruction of prostate using robotic waterjet ablation, via natural 
or artificial opening endoscopic, new technology group 4). The 
applicant estimated that the average Medicare beneficiary would require 
the transurethral procedure of one AQUABEAM System per patient. 
According to the application, the cost of the AQUABEAM System is $2,500 
per procedure. Under existing Sec.  412.88(a)(2), we limit new 
technology add-on payments to the lesser of 50 percent of the average 
cost of the technology or 50 percent of the costs in excess of the MS-
DRG payment for the case. As a result, the maximum new technology add-
on payment for a case involving the use of the AQUABEAM System's 
Aquablation System is $1,250 for FY 2019.
    With regard to the newness criterion for the AQUABEAM System, we 
consider the beginning of the newness period to commence on the date 
the FDA granted the De Novo request (December 21, 2017). As noted above 
and in the FY 2019 rulemaking, the applicant stated that the AQUABEAM 
System was made available on the U.S. market immediately after the FDA 
granted the De Novo request.
    We note that in the FY 2019 IPPS/LTCH PPS final rule, we 
inadvertently misstated the newness period beginning date as April 19, 
2018 (83 FR 41351). As discussed in the FY 2019 IPPS/LTCH PPS final 
rule (83 FR 41350), in its public comment in response to the FY 2019 
IPPS/LTCH PPS proposed rule, the applicant explained that, while the 
AQUABEAM System received approval from the FDA for its De Novo request 
on December 21, 2017, local non-coverage determinations in the Medicare 
population resulted in the first case being delayed until April 19, 
2018. Therefore, the applicant believed that the newness period should 
begin on April 19, 2018, instead of the date FDA granted the De Novo 
request. In the final rule, we responded that with regard to the 
beginning of the technology's newness period, as discussed in the FY 
2005 IPPS final rule (69 FR 49003), the timeframe that a new technology 
can be eligible to receive new technology add-on payments begins when 
data begin to become available. While local non-coverage determinations 
may limit the use of a technology in different regions in the country, 
a technology may be available in regions where no local non-coverage 
decision existed (with data beginning to become available). We also 
explained that under our historical policy we do not consider how 
frequently the medical service or technology has been used in the 
Medicare population in our determination of newness (as discussed in 
the FY 2006 IPPS final rule (70 FR 47349)). Consistent with this 
response, and as indicated in the proposed rule and elsewhere in the 
final rule, we believe the beginning of the newness period to commence 
on the first day the AQUABEAM System was commercially available 
(December 21, 2017). As noted, the later statement that the newness 
period beginning date for the AQUABEAM System is April 19, 2018 was an 
inadvertent error. As we indicated in the FY 2019 IPPS/LTCH PPS final 
rule, we welcome further information from the applicant for 
consideration regarding the beginning of the newness period.
    Because the 3-year anniversary date of the entry of the AQUABEAM 
System onto the U.S. market (December 21, 2020) will occur after FY 
2020, we are proposing to continue new technology add-on payments for 
this technology for FY 2020. Under the proposed change to the 
calculation of the new technology add on payment amount discussed in 
section II.H.9. of the preamble of this proposed rule, we are proposing 
that the maximum new technology add-on payment amount for a case 
involving the use of the AQUABEAM System would be $1,625 for FY 2020; 
that is, 65 percent of the average cost of the technology. However, if 
we do not finalize the proposed change to the calculation of the new 
technology add-on payment amount, we are proposing that the maximum new 
technology add-on payment for a case involving the AQUABEAM System 
would remain at $1,250 for FY 2020. We are inviting public comments on 
our proposals to continue new technology add-on payments for the 
AQUABEAM System for FY 2020.
l. AndexXaTM (Andexanet alfa)
    Portola Pharmaceuticals, Inc. (Portola) submitted an application 
for new technology add-on payments for FY 2019 for the use of 
AndexXaTM (Andexanet alfa).
    AndexXaTM received FDA approval on May 3, 2018, and is 
indicated for use in the treatment of patients who are

[[Page 19284]]

receiving treatment with rivaroxaban and apixaban, when reversal of 
anticoagulation is needed due to life-threatening or uncontrolled 
bleeding.
    After evaluation of the newness, costs, and substantial clinical 
improvement criteria for new technology add-on payments for 
AndexXaTM and consideration of the public comments we 
received in response to the FY 2019 IPPS/LTCH PPS proposed rule, we 
approved AndexXaTM for new technology add-on payments for FY 
2019 (83 FR 41362). Cases involving the use of AndexXaTM 
that are eligible for new technology add-on payments are identified by 
ICD-10-PCS procedure codes XW03372 (Introduction of Andexanet alfa, 
Factor Xa inhibitor reversal agent into peripheral vein, percutaneous 
approach, new technology group 2) or XW04372 (Introduction of Andexanet 
alfa, Factor Xa inhibitor reversal agent into central vein, 
percutaneous approach, new technology group 2). The applicant explained 
that the WAC for 1 vial is $2,750, with the use of an average of 10 
vials for the low dose and 18 vials for the high dose. The applicant 
noted that per the clinical trial data, 90 percent of cases were 
administered a low dose and 10 percent of cases were administered the 
high dose. The weighted average between the low and high dose is an 
average of 10.22727 vials. Therefore, the cost of a standard dosage of 
AndexXaTM is $28,125 ($2,750 x 10.22727). Under existing 
Sec.  412.88(a)(2), we limit new technology add-on payments to the 
lesser of 50 percent of the average cost of the technology or 50 
percent of the costs in excess of the MS-DRG payment for the case. As a 
result, the maximum new technology add-on payment for a case involving 
the use of AndexXaTM is $14,062.50 for FY 2019.
    With regard to the newness criterion for AndexXaTM, we 
consider the beginning of the newness period to commence when 
AndexXaTM received FDA approval (May 3, 2018). Because the 
3-year anniversary date of the entry of AndexXaTM onto the 
U.S. market (May 3, 2021) will occur after FY 2020, we are proposing to 
continue new technology add-on payments for this technology for FY 
2020. Under the proposed change to the calculation of the new 
technology add-on payment amount discussed in section II.H.9. of the 
preamble of this proposed rule, we are proposing that the maximum new 
technology add-on payment amount for a case involving the use of 
AndexXaTM would be $18,281.25 for FY 2020; that is, 65 
percent of the average cost of the technology. However, if we do not 
finalize the proposed change to the calculation of the new technology 
add-on payment amount, we are proposing that the maximum new technology 
add-on payment for a case involving AndexXaTM would remain 
at $14,062.50 for FY 2020. We are inviting public comments on our 
proposals to continue new technology add-on payments for 
AndexXaTM for FY 2020.
5. Proposed FY 2020 Applications for New Technology Add-On Payments
    We received 18 applications for new technology add-on payments for 
FY 2020. In accordance with the regulations under Sec.  412.87(c), 
applicants for new technology add-on payments must have FDA approval or 
clearance by July 1 of the year prior to the beginning of the fiscal 
year for which the application is being considered. One applicant 
withdrew its application prior to the issuance of this proposed rule. A 
discussion of the 17 remaining applications is presented below.
a. AZEDRA[supreg] (Ultratrace[supreg] iobenguane Iodine-131) Solution
    Progenics Pharmaceuticals, Inc. submitted an application for new 
technology add-on payments for AZEDRA[supreg] (Ultratrace[supreg] 
iobenguane Iodine-131) for FY 2020. (We note that Progenics 
Pharmaceuticals, Inc. previously submitted an application for new 
technology add-on payments for AZEDRA[supreg] for FY 2019, which was 
withdrawn prior to the issuance of the FY 2019 IPPS/LTCH PPS final 
rule.) AZEDRA[supreg] is a drug solution formulated for intravenous 
(IV) use in the treatment of patients who have been diagnosed with 
obenguane avid malignant and/or recurrent and/or unresectable 
pheochromocytoma and paraganglioma. AZEDRA[supreg] contains a small 
molecule ligand consisting of meta-iodobenzylguanidine (MIBG) and 
\131\Iodine (\131\I) (hereafter referred to as ``\131\I-MIBG''). The 
applicant noted that iobenguane Iodine-131 is also known as \131\I-
MIBG.
    The applicant reported that pheochromocytomas and paragangliomas 
are rare tumors with an incidence of approximately 2 to 8 people per 
million per year.1 2 Both tumors are catecholamine-secreting 
neuroendocrine tumors, with pheochromocytomas being the more common of 
the two and comprising 80 to 85 percent of cases. While 10 percent of 
pheochromocytomas are malignant, whereby ``malignant'' is defined by 
the World Health Organization (WHO) as ``the presence of distant 
metastases,'' paragangliomas have a malignancy frequency of 25 
percent.3 4 Approximately one-half of malignant tumors are 
pronounced at diagnosis, while other malignant tumors develop slowly 
within 5 years.\5\ Pheochromocytomas and paragangliomas tend to be 
indistinguishable at the cellular level and frequently at the clinical 
level. For example catecholamine-secreting paragangliomas often present 
clinically like pheochromocytomas with hypertension, episodic headache, 
sweating, tremor, and forceful palpitations.\6\ Although 
pheochromocytomas and paragangliomas can share overlapping 
histopathology, epidemiology, and molecular pathobiology 
characteristics, there are differences between these two neuroendocrine 
tumors in clinical behavior, aggressiveness and metastatic potential, 
biochemical findings and association with inherited genetic syndrome 
differences, highlighting the importance of distinguishing between the 
presence of malignant pheochromocytoma and the presence of malignant 
paraganglioma. At this time, there is no curative treatment for 
malignant pheochromocytomas and paragangliomas. Successful management 
of these malignancies requires a multidisciplinary approach of 
decreasing tumor burden, controlling endocrine activity, and treating 
debilitating symptoms. According to the applicant, decreasing 
metastatic tumor burden would address the leading cause of mortality in 
this patient population, where the 5-year survival rate is 50 percent 
for patients with untreated malignant pheochromocytomas and 
paragangliomas.\7\ The applicant stated that controlling catecholamine

[[Page 19285]]

hypersecretion (for example, severe paroxysmal or sustained 
hypertension, palpitations and arrhythmias) would also mean decreasing 
morbidity associated with hypertension (for example, risk of stroke, 
myocardial infarction and renal failure), and begin to address the 30-
percent cardiovascular mortality rate associated with malignant 
pheochromocytomas and paragangliomas.
---------------------------------------------------------------------------

    \1\ Beard, C.M., Sheps, S.G., Kurland, L.T., Carney, J.A., Lie, 
J.T., ``Occurrence of pheochromocytoma in Rochester, Minnesota'', 
pp. 1950-1979.
    \2\ Stenstr[ouml]m, G., Sv[auml]rdsudd, K., ``Pheochromocytoma 
in Sweden 1958-1981. An analysis of the National Cancer Registry 
Data,'' Acta Medica Scandinavica, 1986, vol. 220(3), pp. 225-232.
    \3\ Fishbein, Lauren, ``Pheochromocytoma and Paraganglioma,'' 
Hematology/Oncology Clinics 30, no. 1, 2016, pp. 135-150.
    \4\ Lloyd, R.V., Osamura, R.Y., Kl[ouml]ppel, G., & Rosai, J. 
(2017). World Health Organization (WHO) Classification of Tumours of 
Endocrine Organs. Lyon, France: International Agency for Research on 
Center (IARC).
    \5\ Kantorovich, Vitaly, and Karel Pacak. ``Pheochromocytoma and 
paraganglioma.'' Progress in Brain Research., 2010, vol. 182, pp. 
343-373.
    \6\ Carty, SE, Young, W.F., Elfky, A., ``Paraganglioma and 
pheochromocytoma: Management of malignant disease,'' UpToDate. 
Available at: https://www.uptodate.com/contents/paraganglioma-and-pheochromocytoma-management-of-malignant-disease.
    \7\ Kantorovich, Vitaly, and Karel Pacak. ``Pheochromocytoma and 
paraganglioma.'' Progress in Brain Research., 2010, vol. 182, pp. 
343-373.
---------------------------------------------------------------------------

    The applicant reported that, prior to the introduction of 
AZEDRA[supreg], controlling catecholamine activity in pheochromocytomas 
and paragangliomas was medically achieved with administration of 
combined alpha and beta-adrenergic blockade, and surgically with tumor 
tissue reduction. Because there is no curative treatment for malignant 
pheochromocytomas and paragangliomas, resecting both primary and 
metastatic lesions whenever possible to decrease tumor burden \8\ 
provides a methodology for controlling catecholamine activity and 
lowering cardiovascular mortality risk. Besides surgical removal of 
tumor tissue for lowering tumor burden, there are other treatment 
options that depend upon tumor type (that is, pheochromocytoma tumors 
versus paraganglioma tumors), anatomic location, and the number and 
size of the metastatic tumors. These treatment options include: (1) 
Radiation therapy; (2) nonsurgical local ablative therapy with 
radiofrequency ablation, cryoablation, and percutaneous ethanol 
injection; (3) transarterial chemoembolization for liver metastases; 
and (4) radionuclide therapy using metaiodobenzylguanidine (MIBG) or 
somatostatin. Regardless of the method to reduce local tumor burden, 
periprocedural medical care is needed to prevent massive catecholamine 
secretion and hypertensive crisis.\9\
---------------------------------------------------------------------------

    \8\ Noda, T., Nagano, H., Miyamoto, A., et al., ``Successful 
outcome after resection of liver metastasis arising from an 
extraadrenal retroperitoneal paraganglioma that appeared 9 years 
after surgical excision of the primary lesion,'' Int J Clin Oncol, 
2009, vol. 14, pp. 473.
    \9\ Carty, SE, Young, W.F., Elfky, A., ``Paraganglioma and 
pheochromocytoma: Management of malignant disease,'' UpToDate. 
Available at: https://www.uptodate.com/contents/paraganglioma-and-pheochromocytoma-management-of-malignant-disease.
---------------------------------------------------------------------------

    The applicant stated that AZEDRA[supreg] specifically targets 
neuroendocrine tumors arising from chromaffin cells of the adrenal 
medulla (in the case of pheochromocytomas) and from neuroendocrine 
cells of the extra-adrenal autonomic paraganglia (in the case of 
paragangliomas).\10\ According to the applicant, AZEDRA[supreg] is a 
more consistent form of 131I-MIBG compared to compounded 
formulations of 131I-MIBG that are not approved by the FDA. 
AZEDRA[supreg] (iobenguane I 131) (AZEDRA) was approved by the FDA on 
July 30, 2018, and according to the applicant, is the first and only 
drug indicated for the treatment of adult and pediatric patients 12 
years and older who have been diagnosed with iobenguane scan positive, 
unresectable, locally advanced or metastatic pheochromocytoma or 
paraganglioma who require systemic anticancer therapy. Among local 
tumor tissue reduction options, use of external beam radiation therapy 
(EBRT) at doses greater than 40 Gy can provide local pheochromocytoma 
and paraganglioma tumor control and relief of symptoms for tumors at a 
variety of sites, including the soft tissues of the skull base and 
neck, abdomen, and thorax, as well as painful bone metastases.\11\ 
However, the applicant stated that EBRT irradiated tissues are 
unresponsive to subsequent treatment with 131I-MIBG 
radionuclide.\12\ MIBG was initially used for the imaging of 
paragangliomas and pheochromocytomas because of its similarity to 
noradrenaline, which is taken up by chromaffin cells. Conventional MIBG 
used in imaging expanded to off-label use in patients who had been 
diagnosed with malignant pheochromocytomas and paragangliomas. Because 
131I-MIBG is sequestered within pheochromocytoma and 
paraganglioma tumors, subsequent malignant cell death occurs from 
radioactivity. Approximately 50 percent of tumors are eligible for 
treatment involving 131I-MIBG therapy based on having MIBG 
uptake with diagnostic imaging. According to the applicant, despite 
uptake by tumors, studies have also found that 131I-MIBG 
therapy has been limited by total radiation dose, hematologic side 
effects, and hypertension. While the pathophysiology of total radiation 
dose and hematologic side effects are more readily understandable, 
hypertension is believed to be precipitated by large quantities of non-
iodinated MIBG or ``cold'' MIBG being introduced along with radioactive 
\131\I-MIBG therapy.\13\ The ``cold'' MIBG blocks synaptic reuptake of 
norepinephrine, which can lead to tachycardia and paroxysmal 
hypertension within the first 24 hours, the majority of which occur 
within 30 minutes of administration and can be dose-limiting.\14\
---------------------------------------------------------------------------

    \10\ Ibid.
    \11\ Ibid.
    \12\ Fitzgerald, P.A., Goldsby, R.E., Huberty, J.P., et al., 
``Malignant pheochromocytomas and paragangliomas: a phase II study 
of therapy with high-dose 131I-metaiodobenzylguanidine (131I-
MIBG),'' Ann N Y Acad Sci, 2006, vol. 1073, pp. 465.
    \13\ Loh, K.C., Fitzgerald, P.A., Matthay, K.K., Yeo, P.P., 
Price, DC, ``The treatment of malignant pheochromocytoma with 
iodine-131 metaiodobenzylguanidine (\131\I-MIBG): a comprehensive 
review of 116 reported patients,'' J Endocrinol Invest, 1997, vol. 
20(11), pp. 648-658.
    \14\ Gonias, S, et al., ``Phase II Study of High-Dose [\131\I 
]Metaiodobenzylguanidine Therapy for Patients With Metastatic 
Pheochromocytoma and Paraganglioma,'' J of Clin Onc, July 27, 2009.
---------------------------------------------------------------------------

    The applicant asserted that its new proprietary manufacturing 
process called Ultratrace[supreg] allows AZEDRA[supreg] to be 
manufactured without the inclusion of unlabeled or ``cold'' MIBG in the 
final formulation. The applicant also noted that targeted radionuclide 
MIBG therapy to reduce tumor burden is one of two treatments that have 
been studied the most. The other treatment is cytotoxic chemotherapy 
and, specifically, Carboplatin, Vincristine, and Dacarbazine (CVD). The 
applicant stated that cytotoxic chemotherapy is an option for patients 
who experience symptoms with rapidly progressive, non-resectable, high 
tumor burden, and that cytotoxic chemotherapy is another option for a 
large number of metastatic bone lesions.\15\ According to the 
applicant, CVD was believed to have an effect on malignant 
pheochromocytomas and paragangliomas due to the embryonic origin being 
similar to neuroblastomas. The response rates to CVD have been variable 
between 25 percent and 50 percent.16 17 These patients 
experience side effects consistent with chemotherapeutic treatment with 
CVD, with the added concern of the precipitation of hormonal 
complications such as hypertensive crisis, thereby requiring close 
monitoring during cytotoxic chemotherapy.\18\ According to the 
applicant, use of CVD relative to other tumor burden reduction options 
is not

[[Page 19286]]

an ideal treatment because of nearly 100 percent recurrence rates, and 
the need for chemotherapy cycles to be continually readministered at 
the risk of increased systemic toxicities and eventual development of 
resistance. Finally, there is a subgroup of patients that are 
asymptomatic and have slower progressing tumors where frequent follow-
up is an option for care.\19\ Therefore, the applicant believed that 
AZEDRA[supreg] offers cytotoxic radioactive therapy for the indicated 
population that avoids harmful side effects that typically result from 
use of low-specific activity products.
---------------------------------------------------------------------------

    \15\ Carty, SE, Young, W.F., Elfky, A., ``Paraganglioma and 
pheochromocytoma: Management of malignant disease,'' UpToDate. 
Available at: https://www.uptodate.com/contents/paraganglioma-and-pheochromocytoma-management-of-malignant-disease.
    \16\ Niemeijer, N.D., Alblas, G., Hulsteijn, L.T., Dekkers, O.M. 
and Corssmit, E.P. M., ``Chemotherapy with cyclophosphamide, 
vincristine and dacarbazine for malignant paraganglioma and 
pheochromocytoma: systematic review and meta[hyphen]analysis,'' 
Clinical endocrinology, 2014, vol 81(5), pp. 642-651.
    \17\ Ayala-Ramirez, Montserrat, et al., ``Clinical Benefits of 
Systemic Chemotherapy for Patients with Metastatic Pheochromocytomas 
or Sympathetic Extra-Adrenal Paragangliomas: Insights from the 
Largest Single Institutional Experience,'' Cancer, 2012, vol. 
118(11), pp. 2804-2812.
    \18\ Wu, L.T., Dicpinigaitis, P., Bruckner, H., et al., 
``Hypertensive crises induced by treatment of malignant 
pheochromocytoma with a combination of cyclophosphamide, 
vincristine, and dacarbazine,'' Med Pediatr Oncol, 1994, vol. 22(6), 
pp. 389-392.
    \19\ Carty, SE, Young, W.F., Elfky, A., ``Paraganglioma and 
pheochromocytoma: Management of malignant disease,'' UpToDate. 
Available at: https://www.uptodate.com/contents/paraganglioma-and-pheochromocytoma-management-of-malignant-disease.
---------------------------------------------------------------------------

    The applicant reported that the recommended AZEDRA[supreg] dosage 
and frequency for patients receiving treatment involving \131\I-MIBG 
therapy for a diagnosis of avid malignant and/or recurrent and/or 
unresectable pheochromocytoma and paraganglioma tumors is:
     Dosimetric Dosing--5 to 6 micro curies (mCi) (185 to 222 
MBq) for a patient weighing more than or equal to 50 kg, and 0.1 mCi/kg 
(3.7 MBq/kg) for patients weighing less than 50 kg. Each recommended 
dosimetric dose is administered as an IV injection.
     Therapeutic Dosing--500 mCi (18.5 GBq) for patients 
weighing more than 62.5 kg, and 8 mCi/kg (296 MBq/kg) for patients 
weighing less than or equal to 62.5 kg. Therapeutic doses are 
administered by IV infusion, in ~50 mL over a period of ~30 minutes 
(100 mL/hour), administered approximately 90 days apart.
    With respect to the newness criterion, the applicant indicated that 
FDA granted Orphan Drug designation for AZEDRA[supreg] on January 18, 
2006, followed by Fast Track designation on March 8, 2006, and 
Breakthrough Therapy designation on July 26, 2015. The applicant's New 
Drug Application (NDA) proceeded on a rolling basis, and was completed 
on November 2, 2017. AZEDRA[supreg] was approved by the FDA on July 30, 
2018, for the treatment of adult and pediatric patients 12 years and 
older who have been diagnosed with iobenguane scan positive, 
unresectable, locally advanced or metastatic pheochromocytoma or 
paraganglioma who require systemic anticancer therapy through a New 
Drug Approval (NDA) filed under Section 505(b)(1) of the Federal Food, 
Drug and Cosmetic Act and 21 CFR 314.50. Currently, there are no 
approved ICD-10-PCS procedure codes to uniquely identify procedures 
involving the administration of AZEDRA[supreg]. We note that the 
applicant submitted a request for approval for a unique ICD-10-PCS code 
for the administration of AZEDRA[supreg] beginning in FY 2020.
    As discussed earlier, if a technology meets all three of the 
substantial similarity criteria, it would be considered substantially 
similar to an existing technology and would not be considered ``new'' 
for purposes of new technology add-on payments.
    With regard to the first criterion, whether a product uses the same 
or similar mechanism of action, the applicant stated that while 
AZEDRA[supreg] and low-specific activity conventional I-131 MIBG both 
target the same transporter sites on the tumor cell surface, the 
therapies' safety and efficacy outcomes are different. These 
differences in outcomes are because AZEDRA[supreg] is manufactured 
using the proprietary Ultratrace[supreg] technology, which maximizes 
the molecules that carry the tumoricidal component (I-131 MIBG) and 
minimizes the extraneous unlabeled component (MIBG, free ligands), 
which could cause cardiovascular side effects. Therefore, according to 
the applicant, AZEDRA[supreg] is designed to increase efficacy and 
decrease safety risks, whereas conventional I-131 MIBG uses existing 
technologies and results in a product that overwhelms the normal 
reuptake system with excess free ligands, which leads to safety issues 
as well as decreasing the probability of the \131\I-MIBG binding to the 
tumor cells.
    With regard to the second criterion, whether a product is assigned 
to the same or a different MS-DRG, the applicant noted that there are 
no specific MS-DRGs for the assignment of cases involving the treatment 
of patients who have been diagnosed with pheochromocytoma and 
paraganglioma. We believe that potential cases representing patients 
who may be eligible for treatment involving the administration of 
AZEDRA[supreg] would be assigned to the same MS-DRGs as cases 
representing patients who receive treatment for a diagnosis of 
iobenguane avid malignant and/or recurrent and/or unresectable 
pheochromocytoma and paraganglioma. We also refer readers to the cost 
criterion discussion below, which includes the applicant's list of the 
MS-DRGs to which potential cases involving treatment with the 
administration of AZEDRA[supreg] most likely would map.
    With regard to the third criterion, whether the new use of the 
technology involves the treatment of the same or similar type of 
disease and the same or similar patient population, according to the 
applicant, AZEDRA[supreg] is the only FDA-approved drug indicated for 
use in the treatment of patients who have been diagnosed with malignant 
pheochromocytoma and paraganglioma tumors that avidly take up \131\I-
MIBG and are recurrent and/or unresectable. The applicant stated that 
these patients face serious mortality and morbidity risks if left 
untreated, as well as potentially suffer from side effects if treated 
by available off-label therapies.
    The applicant also contended that AZEDRA[supreg] can be 
distinguished from other currently available treatments because it 
potentially provides the following advantages:
     AZEDRA[supreg] will have a very limited impact on normal 
norepinephrine reuptake due to the negligible amount of unlabeled MIBG 
present in the dose. Therefore, AZEDRA[supreg] is expected to pose a 
much lower risk of acute drug-induced hypertension.
     There is minimal unlabeled MIBG to compete for the 
norepinephrine transporter binding sites in the tumor, resulting in 
more effective delivery of radioactivity.
     Current off-label therapeutic use of \131\I is compounded 
by individual pharmacies with varied quality and conformance standards.
     Because of its higher specific activity (the activity of a 
given radioisotope per unit mass), AZEDRA[supreg] infusion times are 
significantly shorter than conventional \131\I administrations.
    Therefore, with these potential advantages, the applicant 
maintained that AZEDRA[supreg] represents an option for the treatment 
of patients who have been diagnosed with malignant and/or recurrent 
and/or unresectable pheochromocytoma and paraganglioma tumors, where 
there is a clear, unmet medical need.
    For the reasons cited earlier, the applicant believed that 
AZEDRA[supreg] is not substantially similar to other currently 
available therapies and/or technologies and meets the ``newness'' 
criterion. We are inviting public comments on whether AZEDRA[supreg] is 
substantially similar to other currently available therapies and/or 
technologies and meets the ``newness'' criterion.
    With regard to the cost criterion, the applicant conducted an 
analysis using FY 2015 MedPAR data to demonstrate that AZEDRA[supreg] 
meets the cost criterion.
    The applicant searched for potential cases representing patients 
who may be eligible for treatment involving AZEDRA[supreg] that had one 
of the following ICD-9-CM diagnosis codes (which the applicant believed 
is indicative of

[[Page 19287]]

diagnosis appropriate for treatment involving AZEDRA[supreg]): 194.0 
(Malignant neoplasm of adrenal gland), 194.6 (Malignant neoplasm of 
aortic body and other paraganglia), 209.29 (Malignant carcinoid tumor 
of other sites), 209.30 (Malignant poorly differentiated neuroendocrine 
carcinoma, any site), 227.0 (Benign neoplasm of adrenal gland), 237.3 
(Neoplasm of uncertain behavior of paraganglia)--in combination with 
one of the following ICD-9-CM procedure codes describing the 
administration of a radiopharmaceutical: 00.15 (High-dose infusion 
interleukin-2); 92.20 (Infusion of liquid brachytherapy radioisotope); 
92.23 (Radioisotopic teleradiotherapy); 92.27 (Implantation or 
insertion of radioactive elements); 92.28 (Injection or instillation of 
radioisotopes). The applicant reported that the potential cases used 
for this analysis mapped to MS-DRGs 054 and 055 (Nervous System 
Neoplasms with and without MCC, respectively), MS-DRG 271 (Other Major 
Cardiovascular Procedures with CC), MS-DRG 436 (Malignancy of 
Hepatobiliary System or Pancreas with CC), MS-DRG 827 
(Myeloproliferative Disorders or Poorly Differentiated Neoplasms with 
Major O.R. Procedure with CC), and MS-DRG 843 (Other Myeloproliferative 
Disorders or Poorly Differentiated Neoplastic Diagnosis with MCC). Due 
to patient privacy concerns, because the number of cases under each MS-
DRG was less than 11 in total, the applicant assumed an equal 
distribution between these 6 MS-DRGs. Based on the FY 2019 IPPS/LTCH 
PPS final rule correction notice data file thresholds, the average 
case-weighted threshold amount was $60,136. Using the identified cases, 
the applicant determined that the average unstandardized charge per 
case ranged from $21,958 to $152,238 for the 6 evaluated MS-DRGs. After 
removing charges estimated to be associated with precursor agents, the 
applicant used a 3-year inflation factor of 1.1436 (a yearly inflation 
factor of 1.04574 applied over 3 years), based on the FY 2018 IPPS/LTCH 
PPS final rule (82 FR 38527), to inflate the charges from FY 2015 to FY 
2018. The applicant provided an estimated average of $151,000 per 
therapeutic dose per patient, based on the wholesale acquisition cost 
of the drug and the average dosage amount for most patients, with a 
total cost per patient estimated to be approximately $980,000. After 
including the cost of the technology, the applicant determined an 
inflated average case-weighted standardized charge per case of 
$1,078,631.
    We are concerned with the limited number of cases the applicant 
analyzed. However, we acknowledge the difficulty in obtaining cost data 
for such a rare condition. We are inviting public comments on whether 
the AZEDRA[supreg] technology meets the cost criterion.
    With regard to substantial clinical improvement, the applicant 
maintained that the use of AZEDRA[supreg] has been shown to reduce the 
incidence of hypertensive episodes and use of antihypertensive 
medications, reduce tumor size, improve blood pressure control, and 
reduce secretion of tumor biomarkers. In addition, the applicant 
asserted that AZEDRA[supreg] provides a treatment option for those 
outlined in its indication patient population. The applicant asserted 
that AZEDRA[supreg] meets the substantial clinical improvement 
criterion based on the results from two clinical studies: (1) MIP-IB12 
(IB12): A Phase I Study of Iobenguane (MIBG) I-131 in Patients With 
Malignant Pheochromocytoma/Paraganglioma; \20\ and (2) MIP-IB12B 
(IB12B): A Study Evaluating Ultratrace[supreg] Iobenguane I-131 in 
Patients With Malignant Relapsed/Refractory Pheochromocytoma/
Paraganglioma. The applicant explained that the IB12B study is similar 
to the IB12 study in that both studies evaluated two open-label, 
single-arm studies. The applicant reported that both studies included 
patients who had been diagnosed with malignant and/or recurrent and/or 
unresectable pheochromocytoma and paraganglioma tumors, and both 
studies assessed objective tumor response, biochemical tumor response, 
overall survival rates, occurrence of hypertensive crisis, and the 
long-term benefit of AZEDRA[supreg] treatment relative to the need for 
antihypertensives. However, according to the applicant, the study 
designs differed in dose regimens (1 dose administered to patients in 
the IB12 study, and 2 doses administered to patients in the IB12B 
study) and primary study endpoints. Differences in the designs of the 
studies prevented direct comparison of study endpoints and pooling of 
the data. In addition, the applicant stated that results from safety 
data from the IB12 study and the IB12B study were pooled and used to 
support substantial clinical improvement assertions. We note that 
neither the IB12 study nor the IB12B study compared the effects of the 
use of AZEDRA[supreg] to any of the other treatment options to decrease 
tumor burden (for example, cytotoxic chemotherapy, radiation therapy, 
and surgical debulking).
---------------------------------------------------------------------------

    \20\ Noto, Richard B., et. al., ``Phase 1 Study of High-
Specific-Activity I-131 MIBG for Metastatic and/or Recurrent 
Pheochromocytoma or Paraganglioma (IB12 Phase 1 Study),'' J Clin 
Endocrinol Metab, vol. 103(1), pp. 213-220.
---------------------------------------------------------------------------

    Regarding the data results from the IB12 study, the applicant 
asserted that, based on the reported safety and tolerability, and 
primary endpoint of radiological response at 12 months, high-specific-
activity I-131 MIBG may be an effective alternative therapeutic option 
for patients who have been diagnosed with iobenguane-avid, metastatic 
and/or recurrent pheochromocytoma and paraganglioma tumors for whom 
there are no other approved therapies and for those patients who have 
failed available treatment options. In addition, the applicant used the 
exploratory finding of decreased or discontinuation of anti-
hypertensive medications relative to baseline medications as evidence 
that AZEDRA[supreg] has clinical benefit and positive impact on the 
long-term effects of hypertension induced norepinephrine producing 
malignant pheochromocytoma and paraganglioma tumors. We understand that 
the applicant used antihypertensive medications as a proxy to assess 
the long-term effects of hypertension such as renal, myocardial, and 
cerebral end organ damage. The applicant reported that it studied 15 of 
the original IB12 study's 21-patient cohort, and found 33 percent (n=5) 
had decreased or discontinuation of antihypertensive medications during 
the 12 months of follow-up. However, the applicant did not provide 
additional data on the incidence of renal insufficiency/failure, 
myocardial ischemic/infarction events, or transient ischemic attacks or 
strokes. Therefore, it is unclear to us if these five patients also had 
decreased urine metanephrines, changed their diet, lost significant 
weight, or if other underlying comorbidities that influence 
hypertension were resolved, making it difficult to understand the 
significance of this exploratory finding.
    Regarding the applicant's assertion that the use of AZEDRA[supreg] 
is safer and more effective than alternative therapies, we note that 
the IB12 study was a dose-escalating study and did not compare current 
therapies with the use of AZEDRA[supreg]. We also note the following: 
(1) The average age of the 21 enrolled patients in the IB12 study was 
50.4 years old (a range of 30 to 72 years old); (2) the gender 
distribution was 61.9 percent (n=13) male and 38.1 percent (n=8) 
female; and (3) 76.2 percent (n=16) were white, 14.3 percent (n=3) were 
black or African American, and 9.5 percent (n=2) were Asian. We

[[Page 19288]]

agree with the study's conductor \21\ that the size of the study is a 
limitation, and with a younger, predominately white, male patient 
population, generalization of study results to a more diverse 
population may be difficult. The applicant reported that one other 
aspect of the patient population indicated that all 21 patients 
received prior anti-cancer therapy for treatment of malignant 
pheochromocytoma and paraganglioma tumors, which included the 
following: 57.1 percent (n=12) received radiation therapy including 
external beam radiation and conventional MIBG; 28.6 percent (n=6) 
received cytotoxic chemotherapy (for example, CVD and other 
chemotherapeutic agents); and 14.3 percent (n=3) received 
Octreotide.\22\ Although this study's patient population illustrates a 
population that has failed some of the currently available therapy 
options, which may potentially support a finding of substantial 
clinical improvement for those with no other treatment options, we are 
unclear which patients benefited from treatment involving 
AZEDRA[supreg], especially in view of the finding of a Fitzgerald, et 
al. study cited earlier \23\ that concluded tissues previously 
irradiated by EBRT were found to be unresponsive to subsequent 
treatment with \131\I-MIBG radionuclide. It was not clear in the 
application how previously EBRT-treated patients who failed EBRT fared 
with the Response Evaluation Criteria in Solid Tumors (RECIST) scores, 
biotumor marker results, and reduction in antihypertensive medications. 
We also lacked information to draw the same correlation between 
previously CVD-treated patients and their RECIST scores, biotumor 
marker results, and reduction in antihypertensive medications.
---------------------------------------------------------------------------

    \21\ Noto, Richard B., et al., ``Phase 1 Study of High-Specific-
Activity I-131 MIBG for Metastatic and/or Recurrent Pheochromocytoma 
or Paraganglioma (IB12 Phase 1 Study),'' J Clin Endocrinol Metab, 
vol. 103(1), pp. 213-220.
    \22\ Ibid.
    \23\ Fitzgerald, P.A., Goldsby, R.E., Huberty, J.P., et al., 
``Malignant pheochromocytomas and paragangliomas: a phase II study 
of therapy with high-dose 131I-metaiodobenzylguanidine (131I-
MIBG).'' Ann N Y Acad Sci, 2006, vol. 1073, pp. 465.
---------------------------------------------------------------------------

    The applicant asserted that the use of AZEDRA[supreg] reduces tumor 
size and reduces the secretion of tumor biomarkers, thereby providing 
important clinical benefits to patients. The IB12 study assessed the 
overall best tumor response based on RECIST.\24\ Tumor biomarker 
response was assessed as complete or partial response for serum 
chromogranin A and total metanephrines in 80 percent and 64 percent of 
patients, respectively. The applicant noted that both the overall best 
tumor response based on RECIST and tumor biomarker response favorable 
results are at doses higher than 500 mCi. We noticed that tumor burden 
improvement, as measured by RECIST criteria, showed that none of the 21 
patients achieved a complete response. In addition, although 4 patients 
showed partial response, these 4 patients also experienced dose-
limiting toxicity with hematological events, and all 4 patients 
received administered doses greater than 18.5 GBq (500 mCi). We also 
note that, regardless of total administered activity (for example, 
greater than or less than 18.5 GBq (500 mCi)), 61.9 percent (n=13) of 
the 21 patients enrolled in the study had stable disease and 14.3 
percent (n=2) of the 14 patients who received greater than administered 
doses of 18.5 GBq (500 mCi) had progressive disease. Finally, we also 
noticed that, for most tumor biomarkers, there were no dose 
relationship trends. While we appreciate the applicant's contention 
that there is no other FDA-approved drug therapy for patients who have 
been diagnosed with \131\I-MIBG avid malignant and/or recurrent and/or 
unresectable pheochromocytoma and paraganglioma tumors, we have 
questions as to whether the overall tumor best response and overall 
best tumor biomarker data results from the IB12 study support a finding 
that the use of the AZEDRA[supreg] technology represents a substantial 
clinical improvement.
---------------------------------------------------------------------------

    \24\ Therasse, P., Arbuck, S.G., Eisenhauer, J.W., Kaplan, R.S., 
Rubinsten, L., Verweij, J., Van Blabbeke, M., Van Oosterom, A.T., 
Christian, M.D., and Gwyther, S.G., ``New guidelines to evaluate the 
response to treatment in solid tumors,'' J Natl Cancer Inst, 2000, 
vol. 92(3), pp. 205-16. Available at: http://www.eortc.be/Services/Doc/RECIST.pdf.
---------------------------------------------------------------------------

    Finally, regarding the applicant's assertion that, based on the 
IB12 study data, AZEDRA[supreg] provides a safe alternative therapy for 
those patients who have failed other currently available treatment 
therapies, we note that none of the patients experienced hypertensive 
crisis, and that 76 percent (n=16) of the 21 patients enrolled in the 
study experienced Grade III or IV adverse events. Although the 
applicant indicated the adverse events were related to the study drug, 
the applicant also noted that there was no statistically significant 
difference between the greater than or less than 18.5 GBq administered 
doses; both groups had adverse events rates greater than 75 percent. 
Specifically, 5 of 7 patients (76 percent) who received less than or 
equal to 18.5 GBq administered doses, and 11 of 14 patients (79 
percent) who received greater than 18.5 GBq administered doses 
experienced Grade III or IV adverse advents. The most common (greater 
than or equal to 10 percent) Grade III and IV adverse events were 
neutropenia, leukopenia, thrombocytopenia, nausea, and vomiting. We 
also note that: (1) There were 5 deaths during the study that occurred 
from approximately 2.5 months up to 22 months after treatment and there 
was no detailed data regarding the 5 deaths, especially related to the 
total activity received during the study; (2) there was no information 
about which patients received prior radiation therapy with EBRT and/or 
conventional MIBG relative to those who experienced Grade III or IV 
adverse events; and (3) the total lifetime radiation dose was not 
provided by the applicant. We are inviting public comments on whether 
the safety data profile from the IB12 study supports a finding that the 
use of AZEDRA[supreg] represents a substantial clinical improvement for 
patients who received treatment with \131\I-MIBG for a diagnosis of 
avid malignant and/or recurrent and/or unresectable pheochromocytoma 
and paraganglioma tumors, given the risks for Grade III or IV adverse 
events.
    The applicant provided study data results from the IB12B study 
(MIP-IB12B), an open-label, prospective 5-year follow-up, single-arm, 
multi-center, Phase II pivotal study to evaluate the safety and 
efficacy of the use of AZEDRA[supreg] for the treatment of patients who 
have been diagnosed with malignant and/or recurrent pheochromocytoma 
and paraganglioma tumors to support the assertion of substantial 
clinical improvement. The applicant reported that the IB12B's primary 
endpoint is the proportion of patients with a reduction (including 
discontinuation) of all anti-hypertensive medication by at least 50 
percent for at least 6 months. Seventy-four patients who received at 
least 1 dosimetric dose of AZEDRA[supreg] were evaluated for safety and 
68 patients who received at least 1 therapeutic dose of AZEDRA[supreg], 
each at 500 mCi (or 8 mCi/kg for patients weighing less than or equal 
to 62.5 kg), were assessed for specific clinical outcomes. The 
applicant asserted that results from this prospective study met the 
primary endpoint (reduction or discontinuation of anti-hypertensive 
medications), as well as demonstrated strong supportive evidence from 
key secondary endpoints (overall tumor response, tumor biomarker 
response, and overall survival rates) that confers important clinical 
relevance to patients

[[Page 19289]]

who have been diagnosed with malignant pheochromocytoma and 
paraganglioma tumors. The applicant also indicated that the use of 
AZEDRA[supreg] was shown to be generally well tolerated at doses 
administered at 8 mCi/kg. We note that the data results from the IB12B 
study did not have a comparator arm, making it difficult to interpret 
the clinical outcome data relative to other currently available 
therapies.
    As discussed for the IB12 study, the applicant reported that 
antihypertension treatment was a proxy for effectiveness of the use of 
AZEDRA[supreg] on norepinephrine induced hypertension producing tumors. 
In the IB12B study, 25 percent (17/68) of patients met the primary 
endpoint of having a greater than 50 percent reduction in anti-
hypertensive agents for at least 6 months. The applicant further 
indicated that an additional 16 patients showed a greater than 50 
percent reduction in anti-hypertensive agents for less than 6 months, 
and by pooling data results from these 33 patients the applicant 
concluded that 49 percent (33/68) of patients achieved a greater than 
50 percent reduction at any time during the study's 12-month follow-up 
period. The study's primary endpoint data also revealed that 11 percent 
of the 88 patients who received a therapeutic dose of AZEDRA[supreg] 
experienced a worsening of preexisting hypertension defined as an 
increase in systolic blood pressure to >=160 mmHg with an increase of 
20 mmHg or an increase in diastolic blood pressure >= 00 mmHg with an 
increase of 10 mmHg. All changes in blood pressure occurred within the 
first 24 hours post infusion. The applicant further compared its data 
results from the IB12B study regarding antihypertension medication and 
the frequency of post-infusion hypertension with published studies on 
MIBG and CVD therapy. The applicant noted a retrospective analysis of 
CVD therapy of 52 patients who had been diagnosed with metastatic 
pheochromocytoma and paraganglioma tumors that found only 15 percent of 
CVD-treated patients achieved a 50-percent reduction in anti-
hypertensive agents. The applicant also compared its data results for 
post-infusion hypertension with literature reporting on MIBG and found 
14 and 19 percent (depending on the study) of patients receiving MIBG 
experience hypertension within 24 hours of infusion. Comparatively, the 
applicant stated that the use of AZEDRA[supreg] had no acute events of 
hypertension following infusion. We are inviting public comments on 
whether these data results regarding hypertension support a finding 
that the use of the AZEDRA[supreg] technology represents a substantial 
clinical improvement, and if anti-hypertensive medication reduction is 
an adequate proxy for improvement in renal, cerebral, and myocardial 
end organ damage.
    Regarding reduction in tumor burden (as defined by RECIST scores), 
the applicant indicated that at the conclusion of the IB12B study's 12-
month follow-up period, 23.4 percent (n=15) of the 68 patients showed a 
partial response, 68.8 percent (n=44) of the 68 patients achieved 
stable disease, and 4.7 percent (n=3) of the 68 patients showed 
progressive disease. None of the patients showed completed response. 
The applicant maintained that achieving stable disease is important for 
patients who have been treated for malignant pheochromocytoma and 
paraganglioma tumors because this is a progressive disease without a 
cure at this time. The applicant also indicated that literature shows 
that stable disease is maintained in approximately 47 percent of 
treatment na[iuml]ve patients who have been diagnosed with metastatic 
pheochromocytoma and paraganglioma tumors at 1 year due to the indolent 
nature of the disease.\25\ In the IB12B study, the data results equated 
to 23 percent of patients achieving partial response and 69 percent of 
patients achieving stable disease. According to the applicant, this 
compares favorably to treatment with both conventional radiolabeled 
MIBG and CVD chemotherapy.
---------------------------------------------------------------------------

    \25\ Hescot, S., Leboulleux, S., Amar, L., Vezzosi, D., Borget, 
I., Bournaud-Salinas, C., de la Fouchardiere, C., Lib[eacute], R., 
Do Cao, C., Niccoli, P., Tabarin, A., ``One-year progression-free 
survival of therapy-naive patients with malignant pheochromocytoma 
and paraganglioma,'' The J Clin Endocrinol Metab, 2013, vol. 98(10), 
pp. 4006-4012.
---------------------------------------------------------------------------

    The applicant stated that the data results demonstrated effective 
tumor response rates. The applicant reported that the IB12 and IB12B 
study data showed overall tumor response rates of 80 percent and 92 
percent, respectively. In addition, the applicant contended that the 
study data across both trials show that patients demonstrated improved 
blood pressure control, reductions in tumor biomarker secretion, and 
strong evidence in overall survival rates. The overall median time to 
death from the first dose was 36.7 months in all treated patients. 
Patients who received 2 therapeutic doses had an overall median 
survival rate of 48.7 months, compared to 17.5 months for patients who 
only received a single dose. We note that the IB12B study reported 12-
month Kaplan-Meier estimate of survival of 91 percent, while the drug 
dosing study IB12 reported overall subject survival of 86 percent at 12 
months, 62 percent at 24 months, 38 percent at 36 months, and 4.8 
percent at 48 months. We also note that only 45 of 68 patients who 
received at least 1 therapeutic dose completed the 12-month efficacy 
phase.
    The applicant indicated that comparison of the IB12B study data 
regarding overall survival rate with historical data is difficult due 
to the differences in the retrospective nature of the published 
clinical studies and heterogeneous patient characteristics, especially 
when overall survival is calculated from the time of initial diagnosis. 
We agree with the applicant regarding the difficulties in comparing the 
results of the published clinical studies, and also believe that the 
differences in these studies may make it more difficult to evaluate 
whether the use of the AZEDRA[supreg] technology improves overall 
survival rates relative to other therapies.
    We acknowledge the challenges with constructing robust clinical 
studies due to the extremely rare occurrence of patients who have been 
diagnosed with pheochromocytoma and paraganglioma tumors. However, we 
are concerned that because the data for both of these studies is mainly 
based upon retrospective studies and small, heterogeneous patient 
cohorts, it is difficult to draw precise conclusions regarding 
efficacy. Only very limited nonpublished data from two, single-arm, 
noncomparative studies are available to evaluate the safety and 
effectiveness of AZEDRA[supreg], leading to a comparison of outcomes 
with historical controls.
    We are inviting public comments on whether the use of the 
AZEDRA[supreg] technology meets the substantial clinical improvement 
criterion, including with respect to the specific concerns we have 
raised. We did not receive any written comments in response to the New 
Technology Town Hall meeting notice published in the Federal Register 
regarding the substantial clinical improvement criterion for 
AZEDRA[supreg] or at the New Technology Town Hall meeting.
b. CABLIVI[supreg] (caplacizumab-yhdp)
    The Sanofi Company submitted an application for new technology add-
on payments for CABLIVI[supreg] (caplacizumab-yhdp) for FY 2020. The 
applicant described CABLIVI[supreg] as a humanized bivalent nanobody 
consisting of two identical building blocks joined by a tri alanine 
linker, which is administered through intravenous and subcutaneous

[[Page 19290]]

injection to inhibit microclot formation in adult patients who have 
been diagnosed with acquired thrombotic thrombocytopenic purpura 
(aTTP). The applicant stated that aTTP is a life-threatening, immune-
mediated thrombotic microangiopathy characterized by severe 
thrombocytopenia, hemolytic anemia, and organ ischemia with an 
estimated 3 to 11 cases per million per year in the U.K. and 
U.S.26 27 28 Further, the applicant stated that aTTP is an 
ultra-orphan disease caused by inhibitory autoantibodies to von 
Willebrand Factor-cleaving protease (vWFCP) also known as ``a 
disintegrin and metalloprotease with thrombospondin type 1 motif, 
member 13 (ADAMTS13),'' resulting in a severe deficiency in WFCP. The 
applicant further explained that von Willebrand Factor (vWF) is a key 
protein in hemostasis and is an adhesive, multimeric plasma 
glycoprotein with a pivotal role in the recruitment of platelets to 
sites of vascular injury. According to the applicant, more than 90 
percent of circulating vWF is expressed by endothelial cells and 
secreted into the systemic circulation as ultra-large von Willebrand 
Factor (ULvWF) multimers. The applicant stated that decreased ADAMTS13 
activity leads to an accumulation of ULvWF multimers, which bind to 
platelets and induce platelet aggregation. According to the applicant, 
the consumption of platelets in these microthrombi causes severe 
thrombocytopenia, tissue ischemia and organ dysfunction (commonly 
involving the brain, heart, and kidneys) and may result in acute 
thromboembolic events such as stroke, myocardial infarction, venous 
thrombosis, and early death. The applicant indicated that the 
aforementioned tissue and organ damage resulting from the ischemia 
leads to increased levels of lactate dehydrogenase (LDH), troponins, 
and creatinine (organ damage markers) and that faster normalization of 
these organ damage markers and platelet counts is believed to be linked 
with faster resolution of the ongoing microthrombotic process and the 
associated tissue ischemia. According to the applicant, in diagnoses of 
aTTP there is no consensual, validated surrogate marker that defines 
the subpopulation at greatest risk of death or significant morbidity. 
Therefore, the applicant stated that all patients who have been 
diagnosed with aTTP should be considered severe cases and treated in 
order to prevent death and significant morbidity.
---------------------------------------------------------------------------

    \26\ Scully, M., et al., ``Regional UK TTP registry: correlation 
with laboratory ADAMTS 13 analysis and clinical Features,'' Br. J. 
Haematol., 2008, vol. 142(5), pp. 819-26.
    \27\ Reese, J.A., et al., ``Children and adults with thrombotic 
thrombocytopenic purpura associated with severe, acquired Adamts13 
deficiency: comparison of incidence, demographic and clinical 
features,'' Pediatr. Blood Cancer, 2013, vol. 60(10), pp. 1676-82.
    \28\ Terrell, D.R., et al., ``The incidence of thrombotic 
thrombocytopenic purpura-hemolytic uremic syndrome: all patients, 
idiopathic patients, and patients with severe ADAMTS-13 
deficiency,'' J. Thromb. Haemost., 2005, vol. 3(7), pp. 1432-6.
---------------------------------------------------------------------------

    The applicant explained that the two standard-of-care (SOC) 
treatment options for a diagnosis of aTTP are plasma exchange (PE), in 
which a patient's blood plasma is removed through apheresis and is 
replaced with donor plasma, and immunosuppression (for example, 
corticosteroids and increasingly also rituximab), which is often 
administered as adjunct to plasma exchange in the treatment for a 
diagnosis of aTTP.29 30 According to the applicant, despite 
the current SOC treatment options, acute aTTP episodes are still 
associated with a mortality rate of up to 20 percent, which generally 
occurs within the first weeks of diagnosis. The applicant asserted 
that, although the 20-percent mortality rate reflects substantial 
improvement because of PE treatment, in spite of greater understanding 
of disease pathogenesis and the use of newer immunosuppressants, the 
mortality rate has not been further 
improved.31 32 33 34 35 36 The applicant also noted that 
another important limitation of the currently available therapies (PE 
and immunosuppression) is the delayed onset of effect of days to weeks 
of these therapies because such therapies do not directly address the 
pathophysiological platelet aggregation that leads to the formation of 
microthrombi, which is ultimately associated with death or with the 
severe outcomes reported with diagnoses of aTTP. The applicant 
explained that despite current treatment, exacerbation and relapse 
occur and frequently lead to hospitalization and the need to restart 
daily PE treatment and optimize immunosuppression. In addition, the 
applicant noted that patients may experience exacerbations after 
discontinuing plasma exchange treatment due to continuing formation of 
microthrombi as a result of unresolved underlying autoimmune disease, 
and patients remain at risk of thrombotic complications or early death 
until the episode is completely resolved.\37\
---------------------------------------------------------------------------

    \29\ Scully, M., et al., ``Guidelines on the diagnosis and 
management of thrombotic thrombocytopenic purpura and other 
thrombotic microangiopathies,'' Br. J. Haematol., 2012, vol. 158(3), 
pp. 323-35.
    \30\ George, J.N., ``Corticosteroids and rituximab as adjunctive 
treatments for thrombotic thrombocytopenic Purpura,'' Am. J. 
Hematol., 2012, vol. 87 Suppl 1, pp. S88-91.
    \31\ Form for Notification of a Compassionate Use Programme to 
the Paul-Ehrlich-Institut.
    \32\ Benhamou, Y., et al., ``Cardiac troponin-I on diagnosis 
predicts early death and refractoriness in acquired thrombotic 
thrombocytopenic purpura. Experience of the French Thrombotic 
Microangiopathies Reference Center,'' J. Thromb. Haemost., 2015, 
vol. 13(2), pp. 293-302.
    \33\ Han, B., et al., ``Depression and cognitive impairment 
following recovery from thrombotic thrombocytopenic purpura,'' Am. 
J. of Hematol., 2015, vol. 90(8), pp. 709-14.
    \34\ Rajan, S.K., ``BMJ Best Practice; Thrombotic 
thrombocyopenic purpura,'' May 27, 2016.
    \35\ Goel, R., et al., ``Prognostic risk-stratified score for 
predicting mortality in hospitalized patients with thrombotic 
thrombocytopenic purpura: nationally representative data from 2007 
to 2012,'' Transfusion, 2016, vol. 56(6), pp. 1451-8.
    \36\ Rock, G.A., Shumak, K.H., Buskard, N.A., et al., 
``Comparison of plasma exchange with plasma infusion in the 
treatment of thrombotic thrombocytopenic purpura. Canadian Apheresis 
Study Group,'' N Engl J Med, 1991, vol. 325, pp. 393-397.
    \37\ Goel, R., et al., ``Prognostic risk-stratified score for 
predicting mortality in hospitalized patients with thrombotic 
thrombocytopenic purpura: nationally representative data from 2007 
to 2012,'' Transfusion, 2016, vol. 56(6), pp. 1451-8.
---------------------------------------------------------------------------

    According to the information provided by the applicant, 
CABLIVI[supreg] is administered as an adjunct to PE treatment and 
immunosuppressive therapy immediately upon diagnosis of aTTP through a 
bolus intraveneous injection for the first dose and subcutaneous 
injection for all subsequent doses. The recommended treatment regimen 
and dosage of CABLIVI[supreg] consists of administering 10 mg on the 
first day of treatment via intravenous injection prior to the standard 
plasma exchange treatment. After completion of PE treatment on the 
first day, a 10 mg subcutaneous injection is administered. After the 
first day, and for the rest of the plasma exchange treatment period, a 
daily 10 mg subcutaneous injection is administered following each day's 
PE treatment. After the PE treatment period is completed, a daily 10 mg 
subcutaneous injection is administered for 30 days. If the underlying 
immunological disease (aTTP) is not resolved, the treatment period 
should be extended beyond 30 days and be accompanied by optimization of 
immunosuppression (another SOC treatment option, in addition to PE 
treatment). According to the applicant and as discussed later, the use 
of CABLIVI[supreg] produces faster normalization of platelet count 
response compared to that of SOC treatment options alone. The applicant 
indicated that this contributes to a decrease in the

[[Page 19291]]

length of the SOC treatment period with respect to the number of days 
of PE treatment, the mean length of intensive care unit stays, and the 
mean length of hospitalizations.
    With respect to the newness criterion, CABLIVI[supreg] received FDA 
approval on February 6, 2019, for the treatment of adult patients who 
have been diagnosed with aTTP, in combination with plasma exchange and 
immunosuppressive therapy. According to information provided by the 
applicant, CABLIVI[supreg] was previously granted Fast Track and Orphan 
Drug designations in the United States for the treatment of aTTP by the 
FDA and Orphan Drug designation in Europe for the treatment of aTTP. 
Currently, there are no ICD-10-PCS procedure codes to uniquely identify 
procedures involving CABLIVI[supreg]. We note that the applicant 
submitted a request for approval for a unique ICD-10-PCS procedure code 
for the administration of CABLIVI[supreg] beginning in FY 2020.
    As discussed above, if a technology meets all three of the 
substantial similarity criteria, it would be considered substantially 
similar to an existing technology and would not be considered ``new'' 
for purposes of new technology add-on payments.
    With regard to the first criterion, whether a product uses the same 
or a similar mechanism of action to achieve a therapeutic outcome, 
according to the applicant, CABLIVI[supreg] is a first-in-class therapy 
with an innovative mechanism of action. The applicant explained that 
CABLIVI[supreg] binds to the A1 domain of vWF and specifically inhibits 
the interaction between vWF and platelets. Furthermore, the applicant 
indicated that in patients who have been diagnosed with aTTP, 
proteolysis of ULvWF multimers by ADAMTS13 is impaired due to the 
presence of inhibiting or clearing anti-ADAMTS13 auto-antibodies, 
resulting in the persistence of the constitutively active A1 domain 
and, as a consequence, platelets spontaneously bind to ULvWF and 
generate microvascular blood clots in high shear blood vessels. The 
applicant noted that CABLIVI[supreg] is able to interact with vWF in 
both its active (that is, ULvWF multimers or normal multimers activated 
through immobilization or shear stress) and inactive forms (that is, 
multimers prior to conformational change of the A1 domain), thereby 
immediately blocking the interaction of vWF with the platelet receptor 
(GPIb-IX-V) and further preventing spontaneous interaction of ULvWF 
with platelets that would lead to platelet microthrombi formation in 
the microvasculature, local schemia and platelet consumption. The 
applicant highlighted that this immediate platelet-protective effect 
differentiates CABLIVI[supreg] from slower-acting therapies, such as PE 
and immunosuppressants, which need days to exert their effect. The 
applicant explained that PE acts by removing ULvWF and the circulating 
auto-antibodies against ADAMTS13, thereby replenishing blood levels of 
ADAMTS13, while immunosuppressants aim to stop or reduce the formation 
of auto-antibodies against ADAMTS13.
    With respect to the second criterion, whether a product is assigned 
to the same or a different MS-DRG, the applicant believed that 
potential cases representing patients who may be eligible for treatment 
involving CABLIVI[supreg] would be assigned to the same MS- DRGs as 
cases representing patients who receive SOC treatment for a diagnosis 
of aTTP. As explained below in the discussion of the cost criterion, 
the applicant believed that potential cases representing patients who 
may be eligible for treatment involving CABLIVI[supreg] would be 
assigned to MS-DRGs that contain cases representing patients who were 
diagnosed with aTTP and received therapeutic PE procedures during 
hospitalization.
    With respect to the third criterion, whether the new use of the 
technology involves the treatment of the same or similar type of 
disease and the same or similar patient population, according to the 
applicant, there are no other specific therapies approved for the 
treatment of patients diagnosed with aTTP. As stated earlier, according 
to the applicant, patients who have been diagnosed with aTTP have two 
currently available SOC treatment options: PE, in which a patient's 
blood plasma is removed through apheresis and is replaced with donor 
plasma, and immunosuppression (for example, corticosteroids and 
increasingly rituximab), which is administered as an adjunct to PE in 
the treatment of aTTP. The applicant further explained that 
immunosuppression consisting of glucocorticoids is often administered 
as adjunct to PE in the initial treatment of a diagnosis of 
aTTP,38 39 but their use is based on historical evidence 
that some patients with limited symptoms might respond to 
corticosteroids alone.40 41 The applicant noted that there 
have been no studies specifically comparing treatment involving the 
combination of PE with corticosteroids, versus PE alone; that they are 
not specifically approved for the treatment of a diagnosis of aTTP, and 
that other immunosuppressive agents used to treat a diagnosis of aTTP, 
such as rituximab, have not been studied in properly controlled, 
double-blind studies. The applicant also noted that rituximab, aside 
from not being licensed for the treatment of a diagnosis of aTTP, is 
not fully effective during the first 2 weeks of treatment, with a 
reported delay of onset of its effect that may extend up to 27 days, 
with at least 3 to 7 days needed to achieve adequate B-cell depletion 
(given the B-cells may also contain ADAMTS13 antibodies), and even 
longer to restore ADAMTS13 activity levels.42 43
---------------------------------------------------------------------------

    \38\ Scully, M., et al., ``Guidelines on the diagnosis and 
management of thrombotic thrombocytopenic purpura and other 
thrombotic microangiopathies,'' Br. J. Haematol., 2012, vol. 158(3), 
pp. 323-35.
    \39\ George, J.N., ``Corticosteroids and rituximab as adjunctive 
treatments for thrombotic thrombocytopenic Purpura,'' Am. J. 
Hematol., 2012, vol. 87 Suppl 1, pp. S88-91.
    \40\ Bell, W.R., et al., ``Improved survival in thrombotic 
thrombocytopenic purpura-hemolytic uremic Syndrome. Clinical 
experience in 108 patients,'' N. Engl. J. Med., 1991, vol. 325(6), 
pp. 398-403.
    \41\ Phillips, E.H., et al., ``The role of ADAMTS-13 activity 
and complement mutational analysis in differentiating acute 
thrombotic microangiopathies,'' J. Thromb. Haemost., 2016, vol. 
14(1), pp. 175-85.
    \42\ Coppo, P., ``Management of thrombotic thrombocytopenic 
purpura,'' Transfus Clin Biol., Sep 2017, vol. 24(3), pp. 148-153.
    \43\ Froissart, A., et al., ``Rituximab in autoimmune thrombotic 
thrombocytopenic purpura: A success story,'' Eur. J. Intern. Med., 
2015, vol. 26(9), pp. 659-65.
---------------------------------------------------------------------------

    Based on the applicant's statements as summarized above, the 
applicant believes that CABLIVI[supreg] provides a new treatment option 
for patients who have been diagnosed with aTTP. However, it is not 
clear that CABLIVI[supreg] would involve the treatment of a different 
type of disease or a different patient population. As stated earlier, 
according to the applicant, patients who have been diagnosed with aTTP 
have two SOC treatment options for a diagnosis of aTTP: PE, in which a 
patient's blood plasma is removed through apheresis and is replaced 
with donor plasma, and immunosuppression (for example, corticosteroids 
and increasingly also rituximab), which is administered as an adjunct 
to PE in the initial treatment for a diagnosis of aTTP. Therefore, it 
appears that CABLIVI[supreg] is used to treat the same or similar type 
of disease (a diagnosis of aTTP) and a similar patient population as 
currently available treatment options.
    We are inviting public comments on whether CABLIVI[supreg] is 
substantially similar to other technologies and whether CABLIVI[supreg] 
meets the newness criterion.

[[Page 19292]]

    With regard to the cost criterion, the applicant conducted the 
following analysis to demonstrate that the technology meets the cost 
criterion. In order to identify the range of MS-DRGs that cases 
representing potential patients who may be eligible for treatment using 
CABLIVI[supreg] may map to, the applicant identified all MS-DRGs for 
patients who had been hospitalized for a diagnosis of aTTP. 
Specifically, the applicant searched the FY 2017 MedPAR file for 
Medicare fee-for-service inpatient hospital claims submitted between 
October 1, 2016 and September 30, 2017, and identified potential cases 
by ICD-10-CM diagnosis code M31.1 (Thrombotic microangiopathy) and ICD-
10-PCS procedure codes 6A550Z3 (Pheresis of plasma, single) and 6A551Z3 
(Pheresis of plasma, multiple). The applicant noted that it excluded 
cases with an ICD-10-CM diagnosis code of D59.3 (Hemolytic-uremic 
syndrome).
    This resulted in 360 cases spanning 61 MS-DRGs, with approximately 
67.2 percent of all potential cases mapping to the following 5 MS-DRGs:

------------------------------------------------------------------------
               MS-DRG                            MS-DRG title
------------------------------------------------------------------------
MS-DRG 545..........................  Connective Tissue Disorders with
                                       MCC.
MS-DRG 546..........................  Connective Tissue Disorders
                                       without CC.
MS-DRG 547..........................  Connective Tissue Disorders
                                       without CC/MCC.
MS-DRG 682..........................  Renal Failure with MCC.
MS-DRG 698..........................  Other Kidney and Urinary Tract
                                       Diagnoses with MCC.
------------------------------------------------------------------------

    Using the 242 identified cases that mapped to the top 5 MS-DRGs 
above, the average case-weighted unstandardized charge per case was 
$188,765. The applicant then standardized the charges and then removed 
historic charges for items that are expected to be avoided for patients 
who receive treatment involving CABLIVI[supreg]. The applicant 
determined that 31 percent of historical routine bed charges, 65 
percent of historical ICU charges, and 38 percent of historical blood 
administration charges (which includes charges for therapeutic PE) 
would be reduced because of the use of CABLIVI[supreg], based on the 
findings from the Phase III clinical study HERCULES. The applicant 
indicated it used the FY 2017 MedPAR file to determine the appropriate 
amount of charges to remove. The applicant then inflated the adjusted 
standardized charges by 8.864 percent utilizing the 2-year inflation 
factor published by CMS in the FY 2019 IPPS/LTCH PPS final rule to 
adjust the outlier threshold (83 FR 41722). (We note that this figure 
was revised in the FY 2019 IPPS/LTCH PPS final rule correction notice. 
The corrected final 2-year inflation factor is 1.08986 (83 FR 49844). 
We further note that even when using the corrected final rule values to 
inflate the charges, the average case-weighted standardized charge per 
case exceeded the average case-weighted threshold amount.) The 
applicant explained that the anticipated price for CABLIVI[supreg]'s 
indication for the treatment of patients who have been diagnosed with 
aTTP, in combination with plasma exchange and immunosuppressive 
therapy, has yet to be determined and, therefore, no charges for 
CABLIVI[supreg] were added in the analysis. Based on the FY 2019 IPPS/
LTCH PPS final rule correction notice data file thresholds for FY 2020, 
the applicant determined the average case-weighted threshold amount was 
$49,904. The final inflated average case-weighted standardized charge 
per case was $145,543. Because the final inflated average case-weighted 
standardized charge per case exceeds the average case-weighted 
threshold amount, the applicant maintained that the technology meets 
the cost criterion. We are inviting public comments on whether 
CABLIVI[supreg] meets the cost criterion.
    With respect to the substantial clinical improvement criterion, the 
applicant asserted that it believes that CABLIVI[supreg] represents a 
substantial clinical improvement compared to the use of currently 
available treatments (PE and immunosuppressants) because it: (1) 
Significantly reduces time to platelet count response, which is 
consistent with the halting of platelet consumption in microthrombi; 
(2) significantly reduces the number of patients with aTTP-related 
death, recurrence of aTTP-related episodes, or a major thromboembolic 
event; (3) reduces mortality; (4) reduces the proportion of patients 
with recurrence of aTTP diagnoses; (5) reduces the proportion of 
patients who develop refractory disease; (6) reduces the number of days 
of PE; (7) reduces the mean length of intensive care unit stay and the 
mean length of hospitalization; and (8) shows a trend of more rapid 
normalization of organ damage markers. The applicant provided further 
detail regarding these assertions, referencing the results of Phase II 
and Phase III studies and an integrated efficacy analysis of both 
studies.
    The applicant reported that the Phase II study was a randomized, 
single-blind, placebo controlled study entitled ALX-0681-2.1/10 (TITAN) 
that examined the efficacy and safety of the use of CABLIVI[supreg] 
compared to a placebo, with the primary endpoint being achievement of a 
statistically significant reduction in time to platelet count response. 
Seventy-five patients, 66 of which were white, (19 to 72 years old, 
with a mean of 41.6 years old; 44 women and 31 men) with an episode of 
aTTP were randomized 1:1 to receive either CABLIVI[supreg] (n=36) or 
placebo (n=39), in addition to daily PE.\44\ Patients received their 
first dose of CABLIVI[supreg] administered through intravenous 
injection prior to the first PE, followed by daily doses administered 
subcutaneously after each PE. After discontinuing PE, daily doses of 
CABLIVI[supreg] administered through subcutaneous injection were 
continued for 30 days. The median treatment duration with 
CABLIVI[supreg] was 36 days.
---------------------------------------------------------------------------

    \44\ Peyvandi, F., Scully, M., Kremer Hovinga, J.A., Cataland, 
S., Kn[ouml]bl, P., Wu, H., Artoni, A., Westwood, J.P., Mansouri 
Taleghani, M., Jilma, B., Callewaert, F., Ulrichts, H., Duby, C., 
Tersago, D., TITAN Investigators, ``Caplacizumab for Acquired 
Thrombotic Thrombocytopenic Purpura,'' N Engl J Med., February 11, 
2016, vol. 374(6), pp. 511-22. PMID: 26863353.
---------------------------------------------------------------------------

    According to the applicant, significantly more patients in the 
treatment arm met the primary endpoint [95 percent Confidence Interval 
(CI) (3.78, 1.28)]. The applicant indicated that the time to platelet 
count response improvement constitutes a significant substantial 
clinical improvement because it demonstrated that patients treated with 
CABLIVI[supreg] were 2.2 times more likely to achieve an acceptable 
time to platelet count response than patients receiving treatment with 
the placebo. Additionally, the applicant noted that exacerbation of 
aTTP occurred in fewer patients who were treated with CABLIVI[supreg] 
(8.3 percent) than placebo (28.2 percent). During the 1-month follow-up 
period, 8 relapses (defined as a recurrence more than 30 days after 
discontinuing PE) occurred in the CABLIVI[supreg] group with 7 of the 
relapses occurring within 10 days of

[[Page 19293]]

discontinuing the study drug. In all seven of the relapses, ADAMTS13 
activity was still severely suppressed at the end of the treatment 
period, evidence of ongoing underlying immunological disease and 
indicating an imminent risk of another relapse. The applicant explained 
that according to post-hoc analyses, the group of patients who were 
treated with CABLIVI[supreg] compared to placebo showed a decrease in 
the percentage of patients with refractory disease (0 percent versus 
10.8 percent), a reduction in the number of days of PE (7.7 days versus 
11.7 days) and a trend to more rapid normalization of organ damage 
markers (lactate dehydrogenase, cardiac troponin I and serum 
creatinine). Finally, the applicant noted that there were no deaths in 
the group of patients who were treated with CABLIVI[supreg]. However, 2 
of the 39 placebo-treated patients (5.1 percent) died.
    The applicant explained that the Phase III study was a randomized, 
double-blind, placebo controlled study entitled ALX0681-C301 (HERCULES) 
that examined the efficacy and safety of the use of CABLIVI[supreg] 
compared to a placebo, with the primary endpoint being achievement of a 
statistically significant reduction in time to platelet count response. 
One hundred forty-five patients (18 to 79 years old, with a mean of 46 
years old, 100 women and 45 men), with an episode of aTTP were 
randomized 1:1 to receive either CABLIVI[supreg] (n=72) or placebo 
(n=73) in addition to daily PE and immunosuppression.\45\ The applicant 
explained that patients received a single 10 mg CABLIVI[supreg] 
intravenous injection or placebo prior to the first PE, followed by a 
daily CABLIVI[supreg] 10 mg subcutaneous injection or placebo after 
completion of PE, for the duration of the daily PE treatment period and 
for 30 days thereafter. According to the applicant, if at the end of 
this treatment period (daily PE treatment period and 30 days after) 
there was evidence of persistent underlying immunological disease 
activity (indicative of an imminent risk for recurrence), treatment 
could be extended weekly for a maximum of 4 weeks, together with 
optimization of immunosuppression. The applicant indicated that 
patients who experienced a recurrence while undergoing study drug 
treatment were switched to open-label CABLIVI[supreg] and they were 
again treated for the duration of daily PE treatment and for 30 days 
thereafter. If at the end of this treatment period (daily PE treatment 
period and 30 days after) there was evidence of ongoing underlying 
immunological disease, open-label treatment with CABLIVI[supreg] could 
be extended weekly for a maximum of 4 weeks, together with optimization 
of immunosuppression. Patients were followed for 28 days after 
discontinuation of treatment. Upon recurrence during the follow-up 
period (that is, after all study drug treatment had been discontinued), 
there was no re-initiation of the study drug because recurrence at this 
point was treated according to the SOC. The median treatment duration 
with CABLIVI[supreg] in the double-blind period was 35 days.
---------------------------------------------------------------------------

    \45\ Scully, M., et al., ``Treatment of Acquired Thrombotic 
Thrombocytopenic Purpura with Caplacizumab,'' N. Engl. J. Med., (In 
Press).
---------------------------------------------------------------------------

    According to the applicant, patients in the treatment arm were more 
likely to achieve platelet count response at any given time point, 
compared to the placebo [95 percent CI (1.1, 2.2)]. The applicant 
believed that this constitutes a significant substantial clinical 
improvement because patients who were treated with CABLIVI[supreg] were 
1.55 times more likely to achieve platelet count response at any given 
time point, compared to placebo. The applicant also indicated that, 
compared to placebo, treatment with CABLIVI[supreg] resulted in a 74 
percent reduction in the number of patients with aTTP-related death, 
recurrence of aTTP diagnosis, or a major thromboembolic event, during 
the study drug treatment period (p<0.0001).
    The applicant noted that the proportion of patients with a 
recurrence of an aTTP diagnosis in the Phase III study period (that is, 
the drug treatment period plus the 28-day follow-up after 
discontinuation of the drug treatment) was 67 percent lower in the 
CABLIVI[supreg] group (12.7 percent) compared to the placebo group 
(38.4 percent) (p<0.001). The applicant also indicated that in all 6 
patients in the CABLIVI[supreg] group who experienced a recurrence of 
an aTTP diagnosis during the follow-up period (that is, a relapse), 
ADAMTS13 activity levels were less than 10 percent at the end of the 
study drug treatment, indicating that the underlying immunological 
disease was still active at the time CABLIVI[supreg] was discontinued. 
Furthermore, the applicant stated that there were no patients who were 
treated with CABLIVI[supreg] that had refractory disease (defined as 
absence of platelet count doubling after 4 days of standard treatment 
and elevated LDH), compared to 3 patients (4.2 percent) who had 
refractory disease that were treated with placebo. The applicant also 
explained that a trend to faster normalization of the organ damage 
markers lactate dehydrogenase, cardiac troponin I and serum creatinine 
was observed in patients who were treated with CABLIVI[supreg]. The 
applicant noted that during the study drug treatment, there were no 
deaths in patients who were treated with CABLIVI[supreg], while 3 of 
the 73 placebo-treated patients (4.1 percent) died. Finally, the 
applicant stated that during the Phase III study drug treatment period, 
treatment with CABLIVI[supreg] resulted in a 38 percent reduction in 
the mean number of PE treatment days versus placebo (reduction of 3.6 
days) and a 41 percent reduction in the mean volume of PE (reduction of 
14.6L). Furthermore, treatment with CABLIVI[supreg] resulted in a 65 
percent reduction in the mean length of ICU stay (reduction of 6.3 
days) and a 31 percent reduction in the mean length of hospitalization 
(reduction of 4.5 days) during the Phase III study drug treatment 
period.
    The applicant submitted integrated data from the blinded periods of 
the Phase II and Phase III studies that show a statistically 
significant difference in favor of CABLIVI[supreg] (n=108) in time to 
platelet count response compared to placebo (n=112). The applicant 
indicated that patients who were treated with CABLIVI[supreg] were 1.65 
times more likely to achieve platelet count response at any given time 
point during the blinded period than patients who were treated with 
placebo (95 percent CI: 1.23, 2.20; p<0.001). Additionally, according 
to the applicant, integrated data from the blinded periods of the Phase 
II and Phase III studies showed that compared to placebo, treatment 
with CABLIVI[supreg] resulted in a 72.6 percent reduction in the 
percentage of patients with aTTP-related death, a recurrence of a aTTP 
diagnosis, or at least one treatment-emergent major thromboembolic 
event during the blinded treatment period (p<0.0001). More 
specifically, the applicant indicated that during the blinded treatment 
period no aTTP-related deaths occurred in the CABLIVI[supreg] group 
compared to 4 aTTP-related deaths in the placebo group (p<0.05), 
treatment with CABLIVI[supreg] resulted in an 84.0 percent reduction in 
the proportion of patients with a recurrence of a aTTP diagnosis 
(exacerbation, relapse) during the blinded treatment period (p<0.0001), 
and treatment with CABLIVI[supreg] resulted in a reduction of 40.8 
percent in the proportion of patients with at least one treatment-
emergent major thromboembolic event during the blinded treatment 
period.
    According to the applicant, pooled data from the two studies showed 
that none of the patients who were treated with CABLIVI[supreg] 
developed refractory disease (that is, absence of platelet count 
doubling after 4 days of standard

[[Page 19294]]

treatment and elevated LDH) compared to 7 patients (6.3 percent; 7/112) 
who were treated with placebo during the blinded period (p<0.01). 
Finally, the applicant noted that across both studies, treatment with 
CABLIVI[supreg] resulted in a 37.5 percent reduction in the mean number 
of days of PE treatment (reduction of 3.9 days).
    Although the applicant asserts that CABLIVI[supreg] represents a 
substantial clinical improvement compared to the use of currently 
available treatments (PE and immunosuppressants), we are concerned that 
the Phase II TITAN and Phase III HERCULES studies may not provide 
enough evidence to support that the use of CABLIVI[supreg] represents a 
substantial clinical improvement.
    Regarding the Phase II TITAN study, we are concerned that because 
66 of the 75 patients in the study population were white, the results 
of the study may not be generalizable to a more diverse population that 
may be at risk for diagnosis of aTTP. Additionally, we note that 
CABLIVI[supreg] was associated with fewer aTTP exacerbations during 
therapy, but was associated with more aTTP exacerbations after therapy 
was discontinued, suggesting a lack of effect on long-term anti-
ADAMTS13 antibody levels. Although this is consistent with 
CABLIVI[supreg]'s mechanism of action, we are concerned that without 
long-term data to determine the impact of adjunct use of 
CABLIVI[supreg] on exacerbations and relapse it may be difficult to 
determine if the use of CABLIVI[supreg] represents a substantial 
clinical improvement over existing therapy.
    Based on data from the Oklahoma TTP-HUS Registry, the incidence of 
aTTP is approximately three cases per 1 million adults per year.\46\ 
Additionally, the median age for a diagnosis of aTTP is 41, with a wide 
range between 9 years old and 78 years old. We acknowledge the 
challenges with constructing robust clinical studies due to the 
extremely rare occurrence of patients who have been diagnosed with 
aTTP. However, regarding the Phase III HERCULES study, we are 
nonetheless concerned that the study population was small, 145 people. 
Additionally, it is unclear if the response rate may differ in those 
who have a de novo diagnosis versus those with recurrent disease. We 
note that PE treatment alone has been attributed to an 80 percent 
survival rate,\47\ and because CABLIVI[supreg] is given in combination 
with or after SOC therapies, we are concerned that we may not have 
sufficient information to determine the extent to which the study 
results are attributable to the use of CABLIVI[supreg]. Furthermore, 
with the follow-up period for the Phase III HERCULES study being only 
28 days, we are concerned that there is a lack of long-term data. In 
the absence of long-term data, we are concerned about the impact of the 
use of CABLIVI[supreg] on the relapse rate beyond the overall study 
period, including the 28-day follow-up period.
---------------------------------------------------------------------------

    \46\ Reese, J.A., Muthurajah, D.S., Kremer-Hovinga, J.A., 
Vesely, S.K., Terrell, D.R., George, J.N., ``Children and adults 
with thrombotic thrombocytopenic purpura associated with severe, 
acquired Adamts13 deficiency: comparison of incidence, demographic 
and clinical features,'' Pediatr Blood Cancer, October 2013, vol. 
60(10), pp. 1676-82, Epub June 1, 2013.
    \47\ Rock, G.A., Shumak, K.H., Buskard, N.A., et al., 
``Comparison of plasma exchange with plasma infusion in the 
treatment of thrombotic thrombocytopenic purpura. Canadian Apheresis 
Study Group,'' N Engl J Med, 1991, vol. 325, pp. 393-397.
---------------------------------------------------------------------------

    Finally, although both the Phase II and III studies consisted of 
key secondary endpoints such as death or major thromboembolic events, 
we are concerned that these endpoints were not clearly defined. We also 
are concerned that the studies did not appear to account for other 
clearly defined endpoints such as heart attack, stroke, a bleeding 
episode, and power calculations for the expected differences in such 
endpoints that would be biologically important.
    We are inviting public comments on whether CABLIVI[supreg] meets 
the substantial clinical improvement criterion.
    Below we summarize and respond to a written comment we received in 
response to the New Technology Town Hall meeting notice published in 
the Federal Register regarding the substantial clinical improvement 
criterion for CABLIVI[supreg].
    Comment: The applicant stated that during the New Technology Town 
Hall meeting questions were asked regarding the design of the Phase III 
HERCULES study, specifically regarding treatments that were 
administered during the different arms of the study. To address those 
questions, the applicant summarized the methodology of the Phase III 
HERCULES study by indicating that 145 patients with an acute episode of 
aTTP who had received one PE treatment were randomized 1:1 to placebo 
(73 patients), or 10 mg of CABLIVI[supreg] (72 patients), in addition 
to receiving daily PE treatment and corticosteroids. The applicant 
explained that a single intravenous dose of 10 mg of the study drug was 
given before the first PE performed during the study and a single 10 mg 
subcutaneous dose was given the same day following completion of that 
day's PE treatment. The applicant further stated that a subcutaneous 
dose was given daily during the PE treatment period and 30 days 
thereafter. The applicant noted that, if at the end of this period 
there was evidence of ongoing disease, such as suppressed ADAMTS13 
activity, investigators were encouraged to extend the blinded treatment 
for a maximum of 4 weeks in combination with optimization of 
immunosuppression. In addition, the applicant indicated that all 
patients entered a 28-day treatment-free follow-up period after the 
last dose of the study drug. The applicant explained that the primary 
endpoint was time to platelet count response, defined as platelet count 
greater than or equal to 150 x 10/L with discontinuation of daily PE 
treatment within 5 days. Further, the applicant stated that there were 
four key secondary endpoints, hierarchically ranked: (1) The proportion 
of patients with aTTP-related death, aTTP recurrence, or at least one 
major thromboembolic event during the study drug treatment period (a 
blinded, independent committee adjudicated aTTP-related deaths and 
major thromboembolic events); (2) the proportion of patients with a 
recurrence during the entire study period, including the follow-up 
period; (3) the proportion of patients with refractoriness to therapy, 
defined as absence of platelet count doubling after 4 days of treatment 
and LDH still above normal; and (4) the time to normalization of 3 
organ damage markers: LDH, cardiac troponin I and serum creatinine.
    Response: We appreciate the information provided by the applicant. 
We will take this information into consideration when deciding whether 
to approve new technology add-on payments for CABLIVI[supreg] for FY 
2020.
c. CivaSheet[supreg]
    CivaTech Oncology, Inc. submitted an application for new technology 
add-on payments for CivaSheet[supreg] for FY 2020. CivaSheet[supreg] 
received FDA clearance of a 510(k) premarket notification on August 29, 
2014. CivaSheet[supreg] was approved as a ``sealed source'' by the 
Nuclear Regulatory Commission (NRC) and added to the Registry of 
Radioactive Sealed Source and Devices on October 24, 2014. On May 9, 
2018, CivaSheet[supreg] was registered by the American Association of 
Physicists in Medicine (AAPM) on the ``Joint AAPM/IROC Houston Registry 
of Brachytherapy Sources Complying with AAPM Dosimetric 
Prerequisites.'' According to the applicant, inclusion on this AAPM 
registry is a long-standing requirement imposed on brachytherapy 
sources used

[[Page 19295]]

in all National Cancer Institute clinical trials and that all other 
available brachytherapy sources are included on this registry. 
According to the applicant, CivaSheet[supreg] was not commercially 
distributed among IPPS hospitals until May 2018, after meeting the 
requirements for inclusion in the AAPM registry. Therefore, according 
to the applicant the ``newness'' period for the CivaSheet[supreg], if 
approved for FY 2020 new technology add-on payments, should commence on 
May 9, 2018. Based on this information, we believe the newness period 
for CivaSheet[supreg] would begin on May 9, 2018. However, we are 
seeking public comments on whether inclusion on the AAPM registry is an 
appropriate indicator of the first availability of the 
CivaSheet[supreg] brachytherapy sources on the U.S. market and whether 
the date of inclusion on the AAPM registry is appropriate to consider 
as the beginning of the newness period for CivaSheet[supreg].
    CivaSheet[supreg] is intended for medical purposes to be placed 
into a body cavity or tissue as a source for the delivery of radiation 
therapy. CivaSheet[supreg] is indicated for use as a brachytherapy 
source for the treatment of selected localized tumors. The device may 
be used either for primary treatment or for the treatment of residual 
disease after excision of the primary tumor. CivaSheet[supreg] may be 
used concurrently, or sequentially, with other treatment modalities, 
such as external beam radiation therapy or chemotherapy. We note that 
the applicant has submitted a request for approval for a unique ICD-10-
PCS procedure code to describe procedures involving the use the 
CivaSheet[supreg] device, beginning in FY 2020.
    As discussed previously, if a technology meets all three of the 
substantial similarity criteria, it would be considered substantially 
similar to an existing technology and, therefore, would not be 
considered ``new'' for purposes of new technology add-on payments.
    With regard to the first criterion, whether a product uses the same 
or a similar mechanism of action to achieve a therapeutic outcome, 
according to the applicant, CivaSheet[supreg] does not have a similar 
mechanism of action in comparison to existing brachytherapy 
technologies. The applicant asserted that the unique construction and 
configuration of the CivaSheet[supreg] device permits delivery of 
radiation intra-operatively in a highly targeted fashion. The applicant 
explained that the CivaSheet[supreg] is cut to size in the operation 
room (OR) and conformed to the patient's anatomy and surgical site, 
which allows radiation to be delivered to the resected tumor bed 
margins at the time of the original surgery. The applicant further 
explained that, it is generally believed that ``hot'' spots should be 
avoided in the delivery of radiotherapy because they lead to 
complications, citing the finding that ``[i]n brachytherapy, dose 
homogeneity is difficult to achieve, but efforts to minimize ``hot'' 
spots have been regarded as virtuous and implant-planning guidelines 
were developed to assist in this regard.'' \48\ The applicant stated 
that implants are rarely geometrically perfect and, to avoid under-
dosing some parts of the target volume, it may be necessary to create 
``hot spots'' in other parts of the anatomy. However, as a result, a 
``hotter'' dose compared to that achievable with external beam 
technologies can be delivered to the intended area. In contrast, the 
applicant indicated that CivaSheet[supreg]'s unidirectional 
configuration substantially reduces the dose delivered to neighboring 
radiosensitive structures. The applicant further stated that other 
forms of radiation delivery do not have these capabilities, and no 
other shielded low-dose radiation (LDR) sources are currently available 
on the market. According to the applicant, external beam radiation 
generally cannot be delivered intra-operatively, partly because dosage 
requirements make this impractical and potentially risky and because 
appropriate aiming cannot be computed in the timeframe of a performed 
surgery.
---------------------------------------------------------------------------

    \48\ Bhadrasain, M.D., Vikram, Shivaji, Ph.D., Deore, Beitler, 
M.D., Jonathan J., Sood, M.D., Brij, Mullokandov, Ph.D., Eduard, 
Kapulsky, Ph.D., Alexander, Fontenla, Ph,d, Doracy P, ``The 
relationship between dose heterogeneity (``hot'' spots) and 
complications following high-dose rate brachytherapy,'' Int. J. 
Radiation Oncology Biol. Phys., 1999, vol. 43, no. 5, pp. 983-987.
---------------------------------------------------------------------------

    The applicant believed that, in the absence of the use of the 
CivaSheet[supreg] device, a patient requiring radiation therapy to 
accompany surgery would most likely receive radiation therapy as an 
outpatient service following the inpatient hospitalization after 
surgery. Moreover, the applicant stated that not only does this 
typically require multiple, fractionated treatments, in some cases, 
outpatient external beam radiation may not be possible due to excessive 
toxicity to normal surrounding tissues. According to the applicant, 
radiation therapy can be delivered intra-operatively directly to 
surgical margins through use of a linear accelerator. However, the 
applicant stated that these technologies deliver radiation in a single 
``flash,'' whereas the CivaSheet[supreg] device enables the delivery of 
radiation over time, increasing the efficacy of the radiation therapy.
    Further, the applicant stated that external beam radiation devices 
have a fixed ball or cone-shaped applicator, which does not necessarily 
conform well to the irregular shapes of surgical cavities or permit 
effective screening of adjacent tissues. Additionally, the applicant 
stated that this form of radiation therapy requires a specialized 
linear accelerator and a specially shielded operating room, which the 
applicant believes restricts its use to IPPS-exempt cancer centers.
    The applicant further stated that, in the past, cylindrical 
brachytherapy seeds have been used with various mesh products as a form 
of intra-operative radiation therapy (IORT). However, according to the 
applicant, the use of cylindrical brachytherapy seeds used with various 
mesh products has not developed as part of standard clinical practice. 
According to the applicant, patients treated with previous cylindrical 
brachytherapy seeds faced considerable challenges with toxicity from 
the unfocused, unshielded seed sources when placed in proximity of 
sensitive organs.\49\ Additionally the surgical meshes previously used 
were not designed to maximize source orientation and spacing, and also 
ran the risk of source dispersion as the mesh degraded.\50\
---------------------------------------------------------------------------

    \49\ Rivard, Mark J., ``Low energy brachytherapy sources for 
pelvic sidewall treatment,'' abstract presented at the ABS 2016 
Annual Meeting.
    \50\ Seneviratne, Danushka, et al., ``The CivaSheet: The new 
frontier of intraoperative radiation therapy or a pricer alternative 
to LDR brachytherapy,'' Advances in Radiation Oncology, 2018, vol. 
3, pp. 87-91.
---------------------------------------------------------------------------

    The applicant maintains that the CivaSheet[supreg] is the first 
low-dose radiation (LDR) brachytherapy device designed specifically for 
the delivery of IORT. CivaSheet[supreg]'s individual brachytherapy 
sources are flat with a gold shielding on one side of the seed, a 
design that focuses radiation in one direction, in contrast to the 
cylindrical shape of LDR brachytherapy seeds, which emit radiation in 
all directions. According to the applicant, properties of the flat, 
gold-shielded sources and the bioabsorbable polymer encapsulation make 
the CivaSheet[supreg] uniquely suited for intra-operative delivery. As 
such, the applicant asserted that the CivaSheet[supreg] does not have a 
similar mechanism of action when compared to existing LDR 
brachytherapies.
    With regard to the second criterion, whether a product is assigned 
to the same or similar MS-DRG, the applicant

[[Page 19296]]

asserted that patients who may be eligible for treatment using the 
CivaSheet[supreg] include hospitalized patients having tumors removed 
from the pancreas, colon and anus, pelvic area, head and neck, soft 
tissue sarcomas, non-small-cell lung cancer, ocular melanoma, atypical 
meningioma and retroperitoneum and that cases involving the use of the 
CivaSheet[supreg] would map primarily into the following MS-DRGs:

------------------------------------------------------------------------
          MS-DRG                            MS-DRG title
------------------------------------------------------------------------
11........................  Tracheostomy for Face, Mouth and Neck
                             Diagnoses or Laryngectomy with MCC.
12........................  Tracheostomy for Face, Mouth and Neck
                             Diagnoses or Laryngectomy with CC.
13........................  Tracheostomy for Face, Mouth and Neck
                             Diagnoses or Laryngectomy without CC/MCC.
129.......................  Major Head and Neck Procedures with CC/MCC
                             or Major Device.
130.......................  Major Head and Neck Procedures without CC/
                             MCC.
133.......................  Other Ear, Nose, Mouth and Throat O.R.
                             Procedures with CC/MCC.
134.......................  Other Ear, Nose, Mouth and Throat O.R.
                             Procedures without CC/MCC.
326.......................  Stomach, Esophageal and Duodenal Procedures
                             with MCC.
327.......................  Stomach, Esophageal and Duodenal Procedures
                             with CC.
328.......................  Stomach, Esophageal and Duodenal Procedures
                             without CC/MCC.
329.......................  Major Small and Large Bowel Procedures with
                             MCC.
330.......................  Major Small and Large Bowel Procedures with
                             CC.
331.......................  Major Small and Large Bowel Procedures
                             without CC/MCC.
332.......................  Rectal Resection with MCC.
334.......................  Rectal Resection without CC/MCC.
405.......................  Pancreas, Liver and Shunt Procedures with
                             MCC.
406.......................  Pancreas, Liver and Shunt Procedures with
                             CC.
407.......................  Pancreas, Liver and Shunt Procedures without
                             CC/MCC.
576.......................  Skin Graft Except for Skin Ulcer or
                             Cellulitis with MCC.
577.......................  Skin Graft Except for Skin Ulcer or
                             Cellulitis with CC.
578.......................  Skin Graft Except for Skin Ulcer or
                             Cellulitis without CC/MCC.
653.......................  Major Bladder Procedures with MCC.
654.......................  Major Bladder Procedures with CC.
734.......................  Pelvic Evisceration, Radical Hysterectomy
                             and Radical Vulvectomy with CC/MCC.
735.......................  Pelvic Evisceration, Radical Hysterectomy
                             and Radical Vulvectomy without CC/MCC.
736.......................  Uterine and Adnexa Procedures for Ovarian or
                             Adnexal Malignancy with MCC.
739.......................  Uterine, Adnexa Procedures for Non-Ovarian/
                             Adnexal Malignancy with MCC.
740.......................  Uterine, Adnexa Procedures for Non-Ovarian/
                             Adnexal Malignancy with CC.
741.......................  Uterine, Adnexa Procedures for Non-Ovarian/
                             Adnexal Malignancy without CC/MCC.
826.......................  Myeloproliferative Disorders or Poorly
                             Differentiated Neoplasms with Major O.R.
                             Procedure with MCC.
827.......................  Myeloproliferative Disorders or Poorly
                             Differentiated Neoplasms with Major O.R.
                             Procedure with CC.
828.......................  Myeloproliferative Disorders or Poorly
                             Differentiated Neoplasms with Major O.R.
                             Procedure without CC/MCC.
------------------------------------------------------------------------

    We believe that cases involving the use of existing technologies 
would be assigned to these same MS-DRGs listed above.
    With regard to the third criterion, whether the use of the 
technology involves the treatment of the same or similar type of 
disease and the same or similar patient population, according to the 
applicant, clinical conditions that may require use of the 
CivaSheet[supreg] include treatment of the same patient population as 
those who have been diagnosed with a variety of types of cancer, 
including pancreatic cancer, colorectal cancer, anal cancer, pelvic 
area/gynecological cancer, retroperitoneal sarcoma and head and neck 
cancers.
    The applicant asserted that the CivaSheet[supreg] device is not 
substantially similar to any existing technology because it uses a 
unique mechanism of action, when compared to existing LDR brachytherapy 
technologies, to achieve a therapeutic outcome and, therefore, meets 
the newness criterion.
    We are inviting public comments on whether the CivaSheet[supreg] 
device meets the newness criterion.
    With regard to the cost criterion, the applicant conducted the 
following analysis to demonstrate that the technology meets the cost 
criterion. To determine the MS-DRGs that potential cases representing 
patients who may be eligible for treatment involving CivaSheet[supreg] 
would map to, the applicant identified all MS-DRGs for cases that 
included ICD-10-CM diagnosis codes for either pancreatic cancer, 
colorectal cancer, anal cancer, pelvic area/gynecological cancer, 
retroperitoneal sarcoma and head and neck cancers as a primary or 
secondary diagnosis. Based on the FY 2017 MedPAR Hospital Limited Data 
Set (LDS), the applicant identified a total of 22,835 potential cases. 
The applicant limited its analyses to the most relevant 32 MS-DRGs, 
which represented 80 percent of all the cases. The applicant excluded 
the following cases: Statistical outliers which the applicant defined 
as 3 standard deviations from the geometric mean, HMO cases and claims 
submitted only for graduate medical education payments and cases at 
hospitals that were not included in the FY 2019 IPPS/LTCH PPS final 
rule impact file (the applicant noted that these are predominately 
cancer hospitals not subject to the IPPS). After applying the trims 
above, the applicant identified 17,173 remaining cases.
    Using the 17,173 cases, the applicant determined an average case-
weighted unstandardized charge per case of $122,565. The applicant 
standardized the charges for each case and inflated each case's charges 
from FY 2017 to FY 2019 by applying the outlier charge inflation factor 
of 1.085868 from the FY 2019 IPPS/LTCH PPS proposed rule (83 FR 20581). 
The applicant indicated that the current average cost of the 
CivaSheet[supreg] device is $24,132.86. The applicant then added 
charges for CivaSheet[supreg] by taking the cost of the device and 
converting it to a charge by dividing the costs by the national average 
CCR of 0.309 for implants from the FY 2019 IPPS/LTCH PPS final rule (83 
FR 41273). The applicant calculated an average case-weighted 
standardized charge per case of $188,897 using the percent distribution 
of MS-DRGs as case weights. Based on this analysis, the applicant 
determined that the final inflated average case-weighted

[[Page 19297]]

standardized charge per case for CivaSheet[supreg] exceeded the average 
case-weighted threshold amount of $87,446 by $101,451.
    We note that the inflation factor used by the applicant was the 
proposed 2-year inflation factor, which was discussed in the FY 2019 
IPPS/LTCH PPS final rule summation of the calculation of the FY 2019 
IPPS outlier charge inflation factor for the proposed rule (83 FR 41718 
through 41722). The final 2-year inflation factor published in the FY 
2019 IPPS/LTCH PPS final rule was 1.08864 (83 FR 41722), which was 
revised in the FY 2019 IPPS/LTCH PPS final rule correction notice to 
1.08986 (83 FR 49844). However, we note that even when using either the 
final rule values or the corrected final rule values published in the 
correction notice to inflate the charges, the final inflated average 
case-weighted standardized charge per case for CivaSheet[supreg] would 
exceed the average case-weighted threshold amount. We are inviting 
public comments on whether the CivaSheet[supreg] meets the cost 
criterion.
    With regard to the substantial clinical improvement criterion, the 
applicant asserted that CivaSheet[supreg] represents a substantial 
clinical improvement over existing technologies because it provides the 
following: (1) Improved local control of different cancers; \51\ (2) 
reduced rate of device-related complications; \52\ (3) reduced rate of 
radiation toxicity; \53\ (4) decreased future hospitalizations; \54\ 
(5) decreased rate of subsequent therapeutic interventions; \55\ (6) 
improvement in back pain and appetite in pancreatic cancer patients 
\56\ and (7) improved local control for pancreatic cancer patients.\57\
---------------------------------------------------------------------------

    \51\ Castaneda SA, Emrich J, Bowne WB, Kemmerer EJ, Sangani R, 
Khalili M, Rivard MJ, Poli J. ``Clinical outcomes using a novel 
directional Pd-103 brachytherapy device: 20-month report of a 
patient with leiomyosarcoma of the pelvic sidewall.'' ACRO 2018 
Annual Meeting.
    \52\ Seneviratne, D., McLaughlin, C., Todor, D., Kaplan, B., 
Fields, E., ``The CivaSheet: The new frontier of intraoperative 
radiation therapy or a pricier alternative to LDR brachytherapy?,'' 
Advances in Radiation Oncology, 2018, vol. 3, pp. 87-91.
    \53\ Howell, K.J., Meyer, J.E., Rivard, M.J., et al., ``Initial 
Clinical Experience with Directional LDR Brachytherapy for 
Retroperitoneal Sarcoma,'' submitted Int J of Rad Onc Biol Phys, 
2018.
    \54\ Cavanaugh, S.X., Rothley, D.J., Richman, C., ``Directional 
LDR Intraoperative Brachytherapy for Head and Neck Cancer,'' 
Presented at ABS 2017 Annual Meeting.
    \55\ On file at CivaTech.
    \56\ Ibid.
    \57\ Yoo, S.S., Todor, D.A., Myers, J.M., Kaplan, B.J., Fields, 
E.C., ``Widening the therapeutic window using an implantable, uni-
directional LDR brachytherapy sheet as a boost in pancreatic 
cancer,'' ASTRO 2018 Annual Meeting San Antonio, TX.
---------------------------------------------------------------------------

    With regard to improved local control of different cancers, the 
applicant provided the clinical outcomes results of a 20-month report 
of a patient who had been diagnosed with leiomyosarcoma of the pelvic 
sidewall.\58\ According to the report, the purpose of the report was to 
document the experience of using the CivaSheet[supreg] implant as 
adjuvant intraoperative treatment in a patient who had been diagnosed 
with locally advanced leiomyosarcoma of the lateral pelvic sidewall. 
The patient analyzed in this report is a 62-year-old African American 
male who was found to have a mass incidentally in the left pelvic 
sidewall. The patient presented with lower abdominal pain, hematuria, 
and lower left flank pain radiating to the left groin. A CT scan 
revealed a mass in the left pelvic sidewall that measured 8.1 x 6.4 x 
3.7 cm, with encasement of the left common iliac vein and no distant 
metastasis. A biopsy revealed a high-grade leiomyosarcoma. Given his 
advanced clinical stage and iliac vein encasement, neoadjuvant pelvic 
radiotherapy with IMRT, surgical resection with reconstruction, and a 
boost with intraoperative LDR brachytherapy were performed. The patient 
was treated with pelvic IMRT (50.4 Gy/28 fractions). The patient then 
underwent gross total resection and the CivaSheet[supreg] was implanted 
intraoperatively. The patient recovered well from the interventions, 
according to the report. At 20 months after implantation of the LDR 
brachytherapy device, clinical evaluations and CT imaging surveillance 
demonstrated no evidence of residual disease, according to the report.
---------------------------------------------------------------------------

    \58\ Castaneda, S.A., Emrich, J., Bowne, W.B., Kemmerer, E.J., 
Sangani, R., Khalili, M., Rivard, M.J., Poli, J., ``Clinical 
outcomes using a novel directional Pd-103 brachytherapy device: 20-
month report of a patient with leiomyosarcoma of the pelvic 
sidewall,'' ACRO 2018 Annual Meeting.
---------------------------------------------------------------------------

    With regard to reducing the rate of device-related complications, 
the applicant summarized four case series. In the four case series, the 
CivaSheet[supreg] device was used to treat: (1) Axillary squamous cell 
carcinoma; \59\ (2) retroperitoneal sarcoma; 60 61 62 (3) 
gastric signet ring adenocarcinoma; (4) pancreatic cancer; and (5) 
other abdominal malignancies. There were 13 patients associated with 
these 4 case series.
---------------------------------------------------------------------------

    \59\ Seneviratne, D., McLaughlin, C., Todor, D., Kaplan, B., 
Fields, E., ``The CivaSheet: The new frontier of intraoperative 
radiation therapy or a pricier alternative to LDR brachytherapy?,'' 
Advances in Radiation Oncology, 2018, vol. 3, pp. 87-91.
    \60\ Zhen, H., Turian, J.V., Sen, N., et al.,''Initial clinical 
experience using a novel Pd-103 surface applicator for the treatment 
of retroperitoneal and abdominal wall malignancies,'' Advances in 
Radiation Oncology, 2018, vol. 3, pp. 216-220.
    \61\ Howell, K.J., Meyer, J.E., Rivard, M.J., et al., ``Initial 
Clinical Experience with Directional LDR Brachytherapy for 
Retroperitoneal Sarcoma,'' submitted Int J of Rad Onc Biol Phys, 
2018.
    \62\ Turian, J.V., ``Emerging Technologies for IORT: 
Unidirectional Planar Brachytherapy Sources,'' Presented at AAPM 
2017 Annual Meeting.
---------------------------------------------------------------------------

    Seneviratne, et al.'s case series report documented experience with 
the use of the CivaSheet[supreg] device in a 78 year old male patient 
who had been diagnosed with axillary squamous cell carcinoma. According 
to the case series report, prior to surgery a dose of 58 Gy, prescribed 
to the 95 percent isodose line (5 percent), was delivered 
in 2 Gy fractions with 3-dimensional conformal EBRT with concurrent 
weekly administration of cisplatin 40 mg/m2 at an outside facility. 
Magnetic resonance imaging scans obtained 3 months post-treatment 
revealed that the mass had decreased in size to 3.8 cm x 2.5 cm x 3.9 
cm, but maintained encasement of the axillary artery, axillary vein, 
and several inferior branches of the brachial plexus. Concerns with 
regard to increased toxicity to the axillary structures discouraged 
further EBRT, and the CivaSheet[supreg] device was implanted 
immediately post tumor resection. Given that microscopic disease within 
formerly irradiated tissue was being treated, a prescription dose of 20 
Gy at 5 mm from the surface of the mesh was considered adequate because 
of its delivery of a biologically effective dose (BED)-10 of 39.8 Gy 
and equivalent dose (EQD)-2 of 33.2 Gy to the tumor bed, while limiting 
the D2cc for the brachial plexus to a BED3 of 27.9 Gy and EQD2 of 16.7 
Gy, based on post implant analysis. According to the Seneviratne, et 
al. analysis, this approach allowed for a significantly limited dose to 
be delivered to the brachial plexus. A composite dose constraint of 
D2cc of 75 Gy was selected on the basis of recent data showing elevated 
clinical brachial plexopathy rates beyond this threshold. This 
constraint was met with an estimated composite EQD2 of 74.7 Gy, which, 
according to the applicant, would not have been obtainable with EBRT to 
a tumor bed EQD2 of greater than or equal to 30 Gy. The patient was 
discharged on the same day with instructions on wound care and 
radiation safety. According to the applicant, the incision healed well, 
with no signs of infection, seroma, or lymphadenopathy during monthly 
follow-up visits. At the 8-month follow-up visit, the patient was 
documented to only have minor shoulder pain. Seneviratne, et al., also 
discussed their views on the advantages of the use of

[[Page 19298]]

the CivaSheet[supreg] device, which include its bio-absorbability, ease 
of visualization with imaging, potential for intra-operative 
customization, ability to complement various treatment approaches 
including EBRT and surgical resection, and ease of implantation with 
minimal training.
    To further substantiate its assertions of a reduced rate of device-
related complications regarding the CivaSheet[supreg] device, the 
applicant stated that its malleability is likely to be particularly 
useful in treating irregularly shaped surgical cavities, such as those 
created after breast lumpectomies or pelvic side wall resections. 
According to the applicant, the CivaSheet[supreg] device also overcomes 
several shortcomings observed even among those LDR mesh devices that 
use the same isotope. According to the applicant, as the vicryl sutures 
of traditional LDR mesh devices bend and curve around irregular 
surfaces during placement, the spacing and orientation of the 
radioactive seeds may be altered, leading to unpredictable variations 
in isodose geometry. The applicant stated that, in contrast, the 
polymer encapsulation of the Pd-103 Civa seeds before embedding within 
the membrane allows the sources to maintain their orientation in space 
and deliver radiation in accordance with the predetermined geometry. 
According to the applicant, additionally, unlike older LDR mesh devices 
that run the risk of source dispersion after mesh degradation, the 
polymer encapsulation allows the seeds to maintain their placement even 
as the membrane is absorbed over time. In this same case study, 
Seneviratne, et al., stated that a 3-month post implantation imaging of 
the CivaSheet[supreg] device demonstrated that the radioactive source 
geometry had remained stable since the initial implantation.
    The applicant also provided Howell, et al.'s case series results of 
six patients diagnosed with recurrent retroperitoneal sarcoma who had 
been treated with the use of the CivaSheet[supreg] device to support 
its claims of reduced rate of toxicity and improved local control. 
Similar to the Seneviratne, et al. case series report, Howell, et al.'s 
case series' report also noted concerns regarding prior EBRT, costs 
associated with intra-operative radiation therapy both for the patient 
and the hospital, and concerns of at-risk surrounding anatomic 
structures. Given these concerns, Howell, et al.'s case series report 
also investigated LDR brachytherapy using CivaSheet[supreg]. Amongst 
the six patients observed, five patients had diagnoses of recurrent 
disease in the retroperitoneum or pelvic side wall; one patient had a 
diagnosis of locally-advanced leiomyosarcoma with no previous 
treatment. Regarding prior treatment, two patients had prior EBRT at 
first diagnosis. Four patients received neoadjuvant EBRT prior to 
surgery in addition to treatment involving CivaSheet[supreg] 
brachytherapy. The LDR brachytherapy dose was determined using 
radiobiological calculations of biological effective dose (BED) based 
on the linear-quadratic model and EQD2 values. An LDR brachytherapy 
dose of 20 to 60 Gy (36 Gy mean) was administered, corresponding to BED 
values of 15 to 53 Gy (29 Gy mean) and EQD2 values of 12 to 43 Gy (23 
Gy mean). Because the goal was to provide a conformal radiation boost 
for an additional 15 to 20 Gy EQD2, the prescribed absorbed doses were 
considered appropriate. All patients were followed by CT scan to assess 
implant migration, observed radiation-related toxicities, and evidence 
for local recurrence between 2.5 weeks and 3 months. No evidence of 
implant migration or radiation-related toxicities was found. Based on 
these results, the study concluded that LDR directional brachytherapy 
delivered a targeted dose distribution that was successfully used to 
treat retroperitoneal sarcoma, and that the utilized device is an 
important option for the treatment of patients who have been diagnosed 
with retroperitoneal sarcoma having close/positive surgical margins 
and/or in combination with EBRT to optimize local control.
    Two other case series, by Zhen, H. et al.,\63\ and Turian, et 
al.,\64\ were submitted by the applicant to support the assertion of 
reduced rate of device-related complications. Both case series assessed 
the use of LDR brachytherapy using the CivaSheet[supreg] device in the 
tumor bed given the same clinical challenges outlined in case series 
observed and investigated in the Seneviratne, et al., and Howell, et 
al. analyses in patients previously treated with chemoradiation 
protocols and in patients who had been diagnosed with recurrent tumors 
close to important functional tissues. Both case series assessed LDR 
brachytherapy using the CivaSheet[supreg] device in the treatment of 
different cancers like retroperitoneal sarcomas, pancreatic cancers, 
and gastric singnet ring adenocarcinoma or other abdominal carcinomas. 
Both case series followed the patients with CT imaging sometime between 
2.5 weeks and 86 weeks. Both case series' study concluded that LDR 
brachytherapy with the use of the CivaSheet[supreg] device was a 
feasible alternative treatment modality for the cancers treated in each 
case series. According to Zhen, et al., an advantage of using the 
CivaSheet[supreg] device is that the CivaDot sheets can be easily cut 
to any size and shape at the time of implant. The author further stated 
that the CivaDot sheet is malleable and can conform to curved surfaces. 
This device characteristic, according to the author, gives the 
physician more flexibility to treat tumor beds with irregular shapes 
and surface curvatures compared with electron beam cylindrical 
applicators, thereby reducing the rate of device-related complications. 
However, the analysis by Zhen, et al. also indicated that a limitation 
in dosimetric evaluation using CT imaging is related to the inability 
to identify the orientation of the individual CivaDot mainly because of 
limited resolution and metal artifact caused by the gold plating. 
CivaDot orientation is inferred from the fact that all dots are 
embedded in a membrane that is sutured to the tumor bed and because the 
post-implant CT scan shows the shape of the CivaSheet[supreg] seeds 
being maintained. Also, Zhen, et al. noted that surgical clips could be 
mistakenly identified as CivaDots. The analysis by Zhen, et al. 
recommended that the use of surgical clips should be minimized.
---------------------------------------------------------------------------

    \63\ Zhen, H., Turian, J.V., Sen, N., et al.,''Initial clinical 
experience using a novel Pd-103 surface applicator for the treatment 
of retroperitoneal and abdominal wall malignancies'', Advances in 
Radiation Oncology, 2018, vol. 3, pp. 216-220.
    \64\ Turian, J.V., ``Emerging Technologies for IORT: 
Unidirectional Planar Brachytherapy Sources,'' Presented at AAPM 
2017 Annual Meeting.
---------------------------------------------------------------------------

    With regard to the reduced rate of toxicity, the applicant provided 
a clinical case series by Howell, et al.\65\ to show that shielding 
healthy tissues while irradiating the tumor bed after surgical 
resection was achieved by providing a conformal radiotherapy, a novel 
Pd-103 low-dose rate (LDR) brachytherapy device. Methods and materials 
of the case include the following: The LDR brachytherapy device was 
considered for patients who had been diagnosed with recurrent 
retroperitoneal sarcoma, had received prior radiotherapy to the area, 
and/or had anatomy concerning for high-risk margins predicted for 
recurrence after resection. The case series included the clinical 
conclusions for five patients who had been diagnosed with recurrent 
disease in the retroperitoneum or pelvic side wall, one patient who had 
been diagnosed with locally-advanced leiomyosarcoma with no previous 
treatment, two patients who had prior

[[Page 19299]]

EBRT at first diagnosis, and four patients who received neoadjuvant 
EBRT prior to surgery in combination with brachytherapy. The LDR 
brachytherapy dose was determined using radiobiological calculations of 
biological effective dose (BED) based on the linear-quadratic model and 
EQD2 values. An LDR brachytherapy dose of 20 to 60 Gy (36 Gy mean) was 
administered, corresponding to BED values of 15 to 53 Gy (29 Gy mean) 
and EQD2 values of 12 to 43 Gy (23 Gy mean). Because the goal was to 
provide a conformal radiation boost for an additional 15 to 20 Gy EQD2, 
the prescribed absorbed doses were considered appropriate. According to 
the applicant, results showed that radiation was delivered to the at-
risk tissues with minimal irradiation of adjacent healthy structures or 
structures occupying the surgical cavity after tumor resection. 
According to the applicant, clinical outcomes indicated feasibility for 
surgical implantation and promising results in comparison to current 
standards-of-care. The device did not migrate over the course of 
follow-up and there were no observed radiation-related toxicities.
---------------------------------------------------------------------------

    \65\ Howell, K.J., Meyer, J.E.,Rivard, M.J. et al., ``Initial 
Clinical Experiences with Directional LDR Brachytherapy for 
Retroperitoneal Sarcomo, submitted to Int J of Rad Onc Biol Phys, 
2018.
---------------------------------------------------------------------------

    The Howell, et al. clinical case series concluded that LDR 
directional brachytherapy delivered a targeted dose distribution that 
was successfully used to treat retroperitoneal sarcoma and that the 
utilized device is an important option for the treatment of patients 
who have been diagnosed with retroperitoneal sarcoma having close/
positive surgical margins and/or in combination with EBRT to optimize 
local control.
    The applicant also cited three additional case series to support 
their assertions of reduced rate of device-related complications and 
reduced rate of radiation toxicity. The first is on file at CivaTech in 
which they indicated that more than 60 patients, since 2015, had 
CivaSheet[supreg] implanted with no reported device-related toxicity in 
patients previously treated with maximal EBRT. No other details were 
provided by the applicant. The second case series by Taunk, et al.\66\ 
assessed the use of CivaSheet[supreg] in three patients who had been 
diagnosed with colorectal adenocarcinoma who had undergone prior 
induction chemotherapy and neoadjuvant chemoradiation. 
CivaSheet[supreg] was placed in the tumor bed and patients were 
followed with CT imaging to assess implant migration, 30- and 90-day 
radiation toxicity and local recurrence. One patient was deemed not a 
feasible candidate because the CivaSheet[supreg] could not be uniformly 
opposed to the sacrum due to the degree of concavity. The other two 
patients underwent successful CivaSheet[supreg] implantation, and at 30 
days showed stability of the device and no apparent toxicity. In the 
final additional case series from Rivard, et al.,\67\ a single patient 
who had been diagnosed with pelvic side wall cancer (type not 
indicated) was implanted with CivaSheet[supreg] and the 
CivaSheet[supreg] dose distributions were compared to those of 
conventional low-dose rate, low-energy photon-emitting brachytherapy 
seeds (that is, palladium 103, Iodine-125, and Cesium-131). According 
to the applicant, results suggest gold-shielding CivaDots attenuate 
radiation for directional brachytherapy and CivaSheet[supreg] provides 
a therapeutic target dose, while substantially minimizing critical 
structure doses. In this specific case study, the applicant stated that 
the use of CivaSheet[supreg] showed decreased radiation to adjacent 
organs, such as the bowel and the bladder.
---------------------------------------------------------------------------

    \66\ Taunk, N.K., Cohen, G., Taggar, A.S., et al., ``Preliminary 
Clinical Experience from a Phase I Feasibility Study of a Novel 
Permanent Unidirectional Intraoperative Brachytherapy Device,'' ABS 
2017 Annual Meeting.
    \67\ Rivard, M.J., ``Low-energy brachytherapy sources for pelvic 
sidewall treatment,'' Presented at ABS 2016 Annual Meeting.
---------------------------------------------------------------------------

    With regard to decreasing the number of future hospital visits, the 
applicant provided a poster presentation presented at the American 
Brachytherapy Society 2017 Annual Meeting. The purpose of this study 
was to investigate the feasibility of using intra-operative directional 
brachytherapy for the treatment of squamous cell carcinoma of the 
oropharynx. The study included a single patient who had received a 
prior course of external beam radiation therapy of 70 Gy in 2015. Due 
to positive margins near the carotid after the resection, and the 
increased risk of additional external radiation, brachytherapy was 
considered as a treatment option. CivaSheet[supreg] was used for the 
implant. The Pd-103 sources were spaced 8 mm apart on a rectangular 
grid. Unidirectional dose was achieved by a 0.05 mm thick gold disk-
shaped foil on the reverse side of each source. A dose of 120 Gy at 5 
mm depth was prescribed. After the resection, the entire polymer sheet 
was placed on the treatment area to determine the needed dimensions. 
The CivaSheet[supreg] device was then removed and cut to size with 
scissors leaving 26 Pd-103 sources remaining. The surgeon used 3.0 
vicryl sutures for attachment in a concave shape over the carotid 
artery, where there was a positive margin. The gold foil was positioned 
to protect the neck flap and closure. The surgical team completed the 
procedure and the patient recovered without any complications.
    Results of the study showed that the sources remained in position 
in a concave array pattern. Due to the dose fall-off of Pd-103, the 
calculated dose to critical structures was minimized. Because the 
surgical implant of the CivaDot sheet proceeded as expected with no 
complications and the post-implant plan indicated that the 
CivaSheet[supreg] remained in position with the radioactive side 
contacting the treatment area, the applicant asserts that future 
hospital visits will be decreased because the patient will not return 
for EBRT.
    With regard to decreases in the rate of subsequent therapeutic 
interventions, the applicant stated that the standard-of-care for most 
patients undergoing surgery is typically preceded or followed by a form 
of external beam radiation therapy. A typical course of intensity 
modulated radiation therapy (IMRT) is 25 to 30 fractions (separate 
treatments) delivered over the course of 3 to 6 weeks. The applicant 
stated that, for some patients, CivaSheet[supreg] will be the only form 
of radiation therapy they will receive. CivaSheet[supreg] is implanted 
in one procedure and radiation is locally delivered over the course of 
several weeks, while the sources provide a continuous dose and later 
decay. The device is not removed and no additional follow-up visits are 
required for the patient to receive therapeutic intervention. According 
to the applicant, use of CivaSheet[supreg] can avoid the time and 
expense of dozens of radiation therapy visits over the course of 
several weeks as compared to EBRT. The applicant further stated that 
the published clinical data provided with its application \68\ shows 
that the use of CivaSheet[supreg] is an effective and safe 
combinational treatment to external beam radiation therapy. According 
to the applicant, radiation oncologists can use CivaSheet[supreg] to 
increase the dose of radiation that can be delivered to a tumor margin, 
without increasing toxicity and that this may reduce the odds that a 
patient experiences cancer recurrence.69 70 71 The applicant 
also

[[Page 19300]]

asserted that the targeted radiation approach has demonstrated no toxic 
effects for patients. The applicant further stated that other forms of 
radiation have a known rate of complications and toxicity that result 
in the need for additional therapies and interventions (for example, 
topical creams for skin reddening, and medicine for pain). The 
applicant indicated that there has been no change in concomitant 
medications prescribed because of the use of the CivaSheet[supreg] 
implant either on or off trial. The applicant did not link these claims 
to any of the studies provided with its application. In addition, the 
applicant asserts that, of the case studies they provided, there have 
been no instances of therapeutic interventions to resolve an issue that 
was induced by the use of the CivaSheet[supreg] device to deliver 
radiation.72 73 74
---------------------------------------------------------------------------

    \68\ Taunk, N.K., Cohen, G., Taggar, A.S., et al., ``Preliminary 
Clinical Experience from a Phase I Feasibility Study of a Novel 
Permanent Unidirectional Intraoperative Brachytherapy Device,'' ABS 
2017 Annual Meeting.
    \69\ Rivard, Mark J., ``Low energy brachytherapy sources for 
pelvic sidewall treatment,'' abstract presented at the ABS 2016 
Annual Meeting.
    \70\ Yoo, S.S., Todor, D.A., Myers, J.M., Kaplan, B.J., Fields, 
E.C., ``Widening the therapeutic window using an implantable, uni-
directional LDR brachytherapy sheet as a boost in pancreatic 
cancer,'' ASTRO 2018 Annual Meeting San Antonio, TX.
    \71\ Howell, K.J., Meyer, J.E., Rivard, M.J., et al., ``Initial 
Clinical Experience with Directional LDR Brachytherapy for 
Retroperitoneal Sarcoma,'' submitted Int J of Rad Onc Biol Phys, 
2018.
    \72\ Ibid.
    \73\ Rivard, Mark J., ``Low energy brachytherapy sources for 
pelvic sidewall treatment,'' abstract presented at the ABS 2016 
Annual Meeting.
    \74\ Yoo, S.S., Todor, D.A., Myers, J.M., Kaplan, B.J., Fields, 
E.C., ``Widening the therapeutic window using an implantable, uni-
directional LDR brachytherapy sheet as a boost in pancreatic 
cancer,'' ASTRO 2018 Annual Meeting San Antonio, TX.
---------------------------------------------------------------------------

    With regard to improvement in back pain and appetite (compared to 
baseline) in pancreatic cancer patients, the applicant asserted that 
patients answered standardized, international questionnaire EORTC QLQ-
C30 and PANC26 and that these results are on file at CivaTech. The 
applicant provided the baseline, 70 days post-operative and 98 days 
postoperative patient responses to ``Have you ever had back pain?'' 
Baseline response: 1.5; 70 days post-operative response: 1.0 and 98 
days post-operative response: 1.0. The applicant also provided 
baseline, 70 days post-operative and 98 days post-operative patient 
responses to ``Were you restricted in the amounts of food you could eat 
as a result of your disease or treatment?'' Baseline response: 2.5; 70 
days postoperative response: 1.0 and 98 days postoperative response: 
1.0. (Response Values: 1.0 = ``Not at all''; 2.0 = ``A little''; 3.0 = 
``Quite a bit''; 4.0 = ``Very much'').
    With regard to improved local control for pancreatic cancer 
patients, the applicant provided the results of a dosimetric study 
entitled, ``Widening the Therapeutic Window Using an Implantable, Uni-
directional LDR Brachytherapy Sheet as a Boost in Pancreatic Cancer 
Case Series,'' a poster presented at the ASTRO 2018 Annual Meeting. 
According to background information in the applicant's poster, 
pancreatic patients often undergo neoadjuvant chemotherapy and 
chemoradiation in preparation for surgical resection of the tumor. In 
addition, oftentimes after neoadjuvant therapy there are inflammatory 
changes that, unfortunately, hinder pre-operative imaging and create 
the potential for unreliable determination of tumor resection. 
Accompanying the potentially unreliable determination of tumor 
resectability are patient concerns when positive retroperitoneal 
margins have close proximity to major vasculature. The applicant noted 
that additional EBRT boost, initiated post operatively, is an option, 
but difficult given bowel constraints and the difficulty in identifying 
the area at highest risk. Given these constraints associated with 
treating pancreatic cancers, the purpose of this study was to 
demonstrate the ability of the LDR brachytherapy CivaSheet[supreg] 
device to deliver a focal high-dose boost, targeted to the area at 
highest risk in patients who received neoadjuvant chemoradiation. This 
dosimetric case series consisted of four patients who had been 
diagnosed with borderline resectable pancreatic cancer who received 
neoadjuvant FOLFIRINOX followed by gemcitabine-based 
chemoradiotherapy (chemoRT) to 50.4 Gy in 28 fractions with dose 
prescribed to the gross tumor plus a 1 cm margin. According to the 
poster provided by the applicant, after neoadjuvant therapy, the 
multidisciplinary team was concerned for close or positive margin 
resection. Using the CivaSheet[supreg] device, a 38 Gy EQD2 dose to 5 
mm depth was implanted in these patients and a total dose of 88.4 Gy 
was delivered to the targeted tissue. Post-operatively, patients had a 
CT scan to identify the tumor bed contour, as well as the contour of 
surrounding at-risk organs; the small bowel (SB) was contoured as the 
bowel bag and included the entire peritoneal cavity. Following the CT 
scan, brachytherapy plans, as well as EBRT boost plans, were created 
for each patient. A dose-volume histogram (DVH) from initial 3D 
treatment plans for all patients showed the SB volume receiving 45 Gy 
(V45) was a median of 78.2 cc (range 61.7-107.1 ccs) and maximum bowel 
doses were a median of 53.2 Gy, range 53.1-53.6 Gy. According to the 
applicant, the V45 for SB should be less than 195 cc, with a maximum of 
less than or equal to 58 Gy to prevent SB obstruction, fistula and 
perforation. According to the applicant, with the CivaSheet[supreg] 
device, the boost dose was dramatically increased while SB exposure was 
marginal at about 1/10th of the prescription dose. For the target, the 
CivaSheet[supreg] delivered the prescription dose to 5 mm depth with a 
large inhomogeneous dose throughout the tumor bed with the minimum dose 
of 38 Gy. Dosimetric comparison of a CivaSheet[supreg] tumor bed boost 
and a Stereotactic Body Radiation Therapy (SBRT) tumor bed boost to the 
SB was 9.6 Gy compared to 24 Gy for external beam plan. According to 
the applicant, the conclusions from this case series are that applying 
a brachytherapy uni-directional source to the area at highest risk can 
serve to improve the therapeutic index by improving the local control 
and minimizing toxicities in pancreatic cancer patients after 
neoadjuvant therapy.
    With regard to whether CivaSheet[supreg] represents a substantial 
clinical improvement relative to other brachytherapy technologies 
currently available, we are concerned that all of the supporting data 
appear to be feasibility studies substantiating the use of the 
CivaSheet[supreg] in different cancers and difficult anatomic 
locations. We also are concerned that there do not appear to be any 
comparisons to other current treatments, nor any long-term follow-up 
with comparisons to currently available therapies. We are inviting 
public comments on whether CivaSheet[supreg] meets the substantial 
clinical improvement criterion.
    We did not receive any written comments in response to the New 
Technology Town Hall meeting notice published in the Federal Register 
regarding the substantial clinical improvement criterion for the 
CivaSheet[supreg] or at the New Technology Town Hall meeting.
d. CONTEPOTM (Fosfomycin for Injection)
    Nabriva Therapeutics U.S., Inc. submitted an application for new 
technology add-on payments for CONTEPOTM for FY 2020. 
CONTEPOTM is intended to treat complicated urinary tract 
infections (cUTIs) caused by multi-drug resistant (MDR) pathogens in 
hospitalized patients. CONTEPOTM has not yet received FDA 
approval. The FDA has accepted the applicant's New Drug Application 
(NDA) using its Priority Review expedited program.
    Complicated urinary tract infections are characterized by chills, 
rigors, or fever (temperature of greater than or equal to 38.0 [deg]C); 
elevated white blood cell count (greater than 10,000/mm\3\), or

[[Page 19301]]

left shift (greater than 15 percent immature PMNs); nausea or vomiting; 
dysuria, increased urinary frequency, or urinary urgency; and lower 
abdominal pain or pelvic pain. A related condition, acute 
pyelonephritis (AP), is characterized by chills, rigors, or fever 
(temperature of greater than or equal to 38.0 [deg]C); elevated white 
blood cell count (greater than 10,000/mm\3\), or left shift (greater 
than 15 percent immature PMNs); nausea or vomiting; dysuria, increased 
urinary frequency, or urinary urgency; flank pain; and costo-vertebral 
angle tenderness on physical examination. Risk factors for infection 
with drug-resistant organisms do not, on their own, indicate a 
cUTI.\75\ The applicant stated that CONTEPOTM would offer a 
new potential first-line treatment for patients with cUTIs suspected to 
be caused by MDR pathogens in the United States.
---------------------------------------------------------------------------

    \75\ Hooton, T. and Kalpana, G., 2018, ``Acute complicated 
urinary tract infection (including pyelonephritis) in adults,'' In 
A. Bloom (Ed.), UpToDate. Available at: https://www.uptodate.com/contents/acute-complicated-urinary-tract-infectionincluding-pyelonephritis-in-adults.
---------------------------------------------------------------------------

    The applicant stated that CONTEPOTM is an epoxide 
intravenous antibiotic that eradicates bacteria by inhibiting the 
bacteria's ability to form cell walls, which are critical for a cell's 
survival and growth. The applicant asserted that CONTEPOTM 
offers a broad spectrum of bactericidal Gram-negative and Gram-positive 
activity, including activity against Extended-spectrum [beta]-lactamase 
(ESBL)-producing Enterobacteriaceae, as well as other contemporary MDR 
organisms.
    The applicant noted that there are currently no ICD-10-PCS 
procedure codes that could be used to uniquely identify the use of 
CONTEPOTM. However, the applicant stated that potential 
cases representing patients who may be eligible to receive treatment 
through the administration of CONTEPOTM could be identified 
with ICD-10-PCS codes 3E03329 (Introduction of Other Anti-infective 
into Peripheral Vein, Percutaneous Approach) or 3E04329 (Introduction 
of Other Anti-infective into Central Vein, Percutaneous Approach). The 
applicant has submitted a request for approval for a new ICD-10-PCS 
procedure code to uniquely identify CONTEPOTM administration 
in FY 2020.
    The applicant has recommended that CONTEPOTM be 
administered as follows: 6 g every 8 hours by intravenous (IV) infusion 
over 1 hour for up to 14 days for patients 18 years of age or older, 
with an estimated creatinine clearance (CrCl) greater than or equal to 
50 mL/min. Dosage adjustment is required for patients whose creatinine 
clearance is 50 mL/min or less.
    As discussed earlier, if a technology meets all three of the 
substantial similarity criteria, it would be considered substantially 
similar to an existing technology and would not be considered ``new'' 
for purposes of new technology add-on payments.
    With regard to the first criterion, whether the product uses a 
similar mechanism of action, the applicant stated that 
CONTEPOTM's mechanism of action differentiates it from other 
approved injectable antibiotics. The applicant reports that 
CONTEPOTM, as an injectable epoxide and sole antibiotic 
class member, inhibits an early step in peptidoglycan biosynthesis by 
covalently binding to MurA, an enzyme that catalyzes the first 
committed critical step in a bacteria's ability to form a cell wall 
and, therefore, the cell's survival and growth. The applicant indicated 
that CONTEPOTM's mechanism of action is unique in comparison 
to all other injectable antibiotics by working at a different and 
earlier stage of cell wall synthesis inhibition, such that the cell 
wall lacks suitable integrity and the bacteria die quickly. The 
applicant further stated that because of this unique mechanism of 
action, CONTEPOTM lacks cross resistance with other existing 
classes of intravenous antibiotics.
    With respect to the second criterion, whether the product is 
assigned to the same or a different MS-DRG, the applicant asserted that 
patients who may be eligible to receive treatment involving 
CONTEPOTM include hospitalized patients who have been 
diagnosed with a cUTI. The applicant noted that the relevant existing 
ICD-10-PCS procedure codes (3E3329 and 3E04329) map to many existing 
MS-DRGs. The applicant lists the most common of these MS-DRGs as MS-DRG 
871 (Septicemia or Severe Sepsis without MV >96 Hours with MCC); MS-DRG 
690 (Kidney and Urinary Tract Infections without MCC); MS-DRG 698 
(Other Kidney and Urinary Tract Diagnoses with MCC); MS-DRG 872 
(Septicemia or Severe Sepsis without MV >96 hours without MCC); MS-DRG 
689 (Kidney and Urinary Tract Infections with MCC); MS-DRG 699 (Other 
Kidney and Urinary Tract Diagnoses with CC); MS-DRG (683 Renal Failure 
with CC); MS-DRG 682 (Renal Failure with MCC); MS-DRG 853 (Infectious 
and Parasitic Diseases with O.R. Procedure with MCC); and MS-DRG 291 
(Heart Failure and Shock with MCC). Cases involving the use of 
CONTEPOTM would likely be assigned to the same MS-DRGs to 
which cases involving treatment with comparator drugs are assigned.
    With respect to the third criterion, whether the use of the 
technology involves the treatment of the same or similar type of 
disease and the same or similar patient population, the applicant 
asserted that the use of CONTEPOTM would treat a different 
patient population than existing and currently available treatment 
options. While many drugs treat the broad population of patients who 
have been diagnosed with cUTIs, the applicant asserts that increasing 
rates of Enterobacteriaceae resistance to fluoroquinolones and ESBLs 
have limited both classes use as first-line therapies among inpatients 
with infections caused by suspected or confirmed MDR pathogens. The 
applicant cited a study, which estimates the prevalence of drug 
resistance among uropathogens isolated from hospitalized patients in 
the United States. According to the study, there is a more than a two-
fold increase in ESBL-producing E. coli (from 3.3 percent to 8 
percent), ESBL-producing K. pneumoniae (from 9.1 percent to 18.6 
percent), and CRE (from 0 percent to 2.3 percent) causing UTIs in the 
period between 2000 and 2009.\76\ The applicant further asserts that 
the use of CONTEPOTM will also treat a different diseased 
patient population than the currently available therapies. According to 
the applicant, CONTEPOTM's unique mechanism of action 
amongst injectable antibiotics and novel class allows the use of 
CONTEPOTM to reach different and expanded patient 
populations, particularly those patients who have been diagnosed with a 
cUTI that may have pathogens resistant or suspected resistance to ESBL 
and CRE, or fluoroquinolone resistance. Further, the applicant stated 
that CONTEPOTM's stewardship value to clinicians is as a 
carbapenem-sparing potential therapy that may result in real world 
reductions in CRE resistance, further sparing a last-line of defense 
for critically ill patient populations, which due to unique resistance 
profiles, the applicant asserts constitute a different population than 
is currently treated.
---------------------------------------------------------------------------

    \76\ Shorr, A.F., Zilberberg, M.D., Micek, S.T., Kollef, M.H., 
``Prediction of Infection Due to Antibiotic-Resistant Bacteria by 
Select Risk Factors for Health Care-Associated Pneumonia,'' Arch 
Intern Med, 2008, vol. 168(20), pp. 2205-10.
---------------------------------------------------------------------------

    Based on the applicant's statements as summarized above, the 
applicant believes that CONTEPOTM is not substantially 
similar to any existing intravenous antibiotic treatment. However, we 
are concerned with respect to the first criterion as to whether the 
mechanism of action described by the

[[Page 19302]]

applicant is unique to CONTEPOTM or whether it may be 
similar to other drugs that inhibit cell wall development, including 
penicillins, cephalosporins, and carbapenems. With respect to the 
second criterion, we believe that potential cases involving the use of 
CONTEPOTM would be assigned to the same MS-DRGs as cases 
involving comparator antibiotics. Finally, with respect to the third 
criterion, we are concerned whether CONTEPOTM treats a 
unique patient population, as the applicant asserts. While the variety 
of antibiotic resistance patterns certainly warrants a varied 
armamentarium for clinicians, there are many existing antimicrobials 
that are approved to generally treat cUTIs and MDR pathogens. We are 
concerned as to whether hospitalized patients who have been diagnosed 
with cUTIs, including those with MDR pathogens, would constitute a 
unique patient population, given that there are existing treatment 
options for these patients. This concern as to whether the technology 
may be considered to treat a new patient population seems particularly 
relevant for an antibiotic due to the evolving nature of global 
bacterial resistance patterns, and, specifically, the applicant's 
assertion that the use of CONTEPOTM would be a new tool in 
the growing battle against MDR bacteria infections. We are inviting 
public comments on whether CONTEPOTM is substantially 
similar to any existing technologies and whether it meets the newness 
criterion, including with respect to the concerns we have raised.
    With regard to the cost criterion, the applicant used the FY 2017 
MedPAR Limited Data Set (LDS) to assess the MS-DRGs to which potential 
cases representing hospitalized patients who may be eligible for 
treatment involving CONTEPOTM would most likely be mapped. 
According to the applicant, CONTEPOTM is anticipated to be 
indicated for the treatment of hospitalized patients who have been 
diagnosed with cUTIs. The applicant identified 199 ICD-10-CM diagnosis 
code combinations that identify hospitalized patients who have been 
diagnosed with a cUTI. Searching the FY 2017 MedPAR data file for these 
ICD-10-CM diagnosis codes resulted in a total of 508,821 potential 
cases that span 559 unique MS-DRGs, 510 of which contained more than 10 
cases. The applicant excluded MS-DRGs with minimal volume (that is, 10 
cases or less) from the cohort of the analysis (a total of 201 cases 
and 49 MS-DRGs), and this resulted in a total of 508,620 cases across 
461 MS-DRGs.
    Using 100 percent of the potential cases (508,620), the applicant 
determined an average case-weighted unstandardized charge per case of 
$59,009. The applicant standardized the charges for each case and 
inflated each case's charges by applying the FY 2019 IPPS/LTCH PPS 
final rule outlier charge inflation factor of 1.08864 (83 FR 41722). 
(We note that the 2-year inflation factor was revised in the FY 2019 
IPPS/LTCH PPS final rule correction notice to 1.08986 (83 FR 49844). 
However, we further note that even when using the corrected final rule 
values to inflate the charges, the average case-weighted standardized 
charge per case for each scenario exceeded the average case-weighted 
threshold amount.) The applicant examined associated charges per MS-DRG 
and removed charges for potential antibiotics that may be replaced by 
the use of CONTEPOTM. Specifically, the applicant identified 
5 antibiotics currently used for the treatment of patients who have 
been diagnosed with a cUTI and calculated the cost of each of these 
drugs for administration over a 14-day inpatient hospitalization. 
Because patients who have been diagnosed with a cUTI would typically 
only be treated with one of these antibiotics at a time, the applicant 
estimated an average of the 14-day cost for the 5 antibiotics. The 
applicant then took this cost and converted it to a charge by dividing 
the costs by the national average CCR of 0.191 for drugs from the FY 
2019 IPPS/LTCH PPS final rule (83 FR 41273). The applicant calculated 
an average case-weighted standardized charge per case of $71,333 using 
the percent distribution of MS-DRGs as case-weights. Based on this 
analysis, the applicant determined that the final inflated average 
case-weighted standardized charge per case for CONTEPOTM 
exceeded the average case-weighted threshold amount of $52,203 by 
$19,130.
    Because of the large number of cases included in this cost 
analysis, the applicant conducted sensitivity analyses. In these 
analyses, the applicant repeated the cost analysis above using only the 
top 75 percent of cases, the top 20 MS-DRGs, and the top 10 MS-DRGs. In 
these three additional sensitivity analyses, the final inflated average 
case-weighted standardized charge per case for CONTEPOTM 
exceeded the average case-weighted threshold amount by $14,949, 
$14,230, and $13,620, respectively. We are inviting public comments on 
whether CONTEPOTM meets the cost criterion.
    With regard to the substantial clinical improvement criterion, the 
applicant asserted that the results from the CONTEPOTM 
clinical trial clearly establish that CONTEPOTM represents a 
substantial clinical improvement in the treatment of antibiotic 
resistant infections as compared to currently available treatments. 
Specifically, the applicant asserted that the use of 
CONTEPOTM offers a treatment option for a patient population 
unresponsive to, or ineligible for, currently available treatments, and 
the use of CONTEPOTM significantly improves clinical 
outcomes for this patient population compared to currently available 
treatments. The applicants cited the ZEUS Study, a multi-center, 
randomized, parallel-group, double-blind Phase II/III trial of 464 
patients designed to evaluate safety, tolerability, efficacy and 
pharmacokinetics of the use of CONTEPOTM in the treatment of 
hospitalized adults who have been diagnosed with a cUTI or AP at 92 
global sites in 16 countries. Hospitalized adults who have been 
diagnosed with suspected or microbiologically confirmed cUTI/AP were 
randomized 1:1 to receive treatment with either CONTEPOTM or 
piperacillin-tazobactam (PIP-TAZ) for a fixed 7-day course (no oral 
switch); patients who had been diagnosed with concomitant bacteremia 
could receive up to 14 days. Diagnosis was based on pyuria and cUTI or 
AP with at least two of the following signs and symptoms: Chills, 
rigors, or warmth associated with fever, nausea or vomiting, dysuria, 
lower abdominal pain or pelvic pain, or acute flank pain. Patients who 
had been diagnosed with a cUTI had at least one of the following: Use 
of intermittent or indwelling bladder catheterization, functional or 
anatomical abnormality of urogenital tract, complete or partial 
obstructive uropathy, azotemia or chronic urinary retention in men. 
Baseline urine culture specimen was obtained within 48 hours prior to 
randomization. Indwelling bladder catheters were required to be removed 
or replaced, unless considered unsafe or contraindicated, before or 
within 24 hours after randomization.
    The applicant stated that the primary endpoint of the ZEUS Study 
was to demonstrate that CONTEPOTM was non-inferior to PIP-
TAZ in overall success based on clinical cure (complete resolution or 
significant improvement of signs and symptoms such that no further 
antimicrobial therapy is warranted) and microbiologic eradication 
(baseline pathogen was reduced to <10\4\ CFU/mL on urine culture and if 
applicable, negative on repeat blood culture) in the microbiologic 
modified intent-to-treat

[[Page 19303]]

(m-MITT) population at the test-of-cure visit (TOC), which occurred on 
the 19th to 21st day after completion of a fixed 7 days of treatment 
with the study drug, or up to 14 days of treatment for patients 
diagnosed with concurrent bacteremia to comply with current treatment 
guidelines in these patients.
    Patients with any missing or presumed eradications post-baseline 
urine sample were classified as indeterminates, and conservatively 
deemed as failures in overall success analysis.77 78 The 
applicant also reported that the study had two secondary endpoints. 
Secondary objectives were to compare: (1) Clinical cure rates in the 
two treatment groups in the MITT, m-MITT, Clinical Evaluable (CE), and 
Microbiologic Evaluable (ME) populations at TOC, and (2) 
microbiological eradication rates in m-MITT and ME populations at TOC.
---------------------------------------------------------------------------

    \77\ Eckburg, et al., ``Phenotypic Antibiotic Resistance in 
ZEUS: Multi-center, Randomized, Double-Blind Phase II/III Study of 
ZTI-01 versus Piperacillin-Tazobactam (P-T) in the Treatment of 
Patients with Complicated Urinary Tract Infections (cUTI) including 
Acute Pyelonephritis (AP) Poster,'' 2017.
    \78\ Kaye, et al., ``Intravenous Fosfomycin (ZTI-01) for the 
Treatment of Complicated Urinary Tract Infections (cUTI) including 
Acute Pyelonephritis (AP): Results from a Multi-center, Randomized, 
Double-Blind Phase II/III Study in Hospitalized Adults (ZEUS),'' 
2017.
---------------------------------------------------------------------------

    The applicant also included evidence from a post-hoc study wherein 
all pathogens isolated from patients who had a baseline and TOC 
pathogen underwent blinded, post-hoc, pulsed-field gel electrophoresis 
(PFGE) molecular typing analysis. Microbiologic outcome was also 
defined utilizing the PFGE results, whereby microbiologic persistence 
required the same genus and species of baseline and post-baseline 
pathogens, as well as PFGE-confirmed genetic identity.
    The applicant stated that the ZEUS Study met its primary objective 
of showing non-inferiority of CONTEPOTM compared to PIP-TAZ 
with overall success rates (that is, clinical cure and microbiological 
eradication of baseline pathogen) of 64.7 percent (119/184 
CONTEPOTM patients) versus 54.5 percent (97/178 PIP-TAZ 
patients) in the m-MITT population at TOC (treatment difference 10.2 
percent, 95 percent CI: -0.4, 20.8). We note that, based on the 95 
percent confidence interval reported at the primary endpoint, 
CONTEPOTM's success rates were not found to be different 
from PIP-TAZ in a statistically significant manner. The applicant 
reports that the identity and frequency of pathogens recovered at 
baseline from patients in the ZEUS Study were similar in both the 
CONTEPOTM and PIP-TAZ treatment groups. The most common 
pathogens identified were Enterobacteriaceae, identified in 96.2 
percent of the CONTEPOTM patients and 94.9 percent of the 
PIP-TAZ patients, including E. coli, identified in 72.3 percent of the 
CONTEPOTM patients and 74.7 percent of the PIP-TAZ patients; 
K. pneumoniae, identified in 14.7 percent of the CONTEPOTM 
patients and 14.0 percent of the PIP-TAZ patients; Enterobacter cloacae 
species complex, identified in 4.9 percent of the CONTEPOTM 
patients and 1.7 percent of the PIP-TAZ patients; and Proteus 
mirabilis, identified in 4.9 percent of the CONTEPOTM 
patients and 2.8 percent of the PIP-TAZ patients. Gram-negative aerobes 
other than Enterobacteriaceae included Pseudomonas aeruginosa, which 
was identified in 4.3 percent of the CONTEPOTM patients and 
5.1 percent of the PIP-TAZ patients, and Acinetobacter baumannii-
calcoaceticus species complex, identified in 1.1 percent of the 
CONTEPOTM patients and none of the PIP-TAZ patients. The 
applicant indicated that these pathogens are representative of the 
pathogens that have been recovered in other studies of patients who 
have been diagnosed with a cUTI or AP.
    In terms of secondary endpoints, the applicant stated that clinical 
cure rates were greater than 90 percent in both treatment groups at TOC 
in the MITT, m-MITT, CE, and ME analysis groups. In addition to the 
findings discussed above, with the post-hoc analysis adjusting for PFGE 
results in both treatment arms, CONTEPOTM demonstrated a 
10.5 percent treatment difference compared to PIP-TAZ with a 
microbiological response rate of 70.7 percent versus 60.1 percent, 
respectively, in the m-MITT population at TOC (95 percent CI: 0.2, 
20.8). The applicant indicated that by specifying the genus and species 
of the bacteria present at the start of treatment, the post-hoc PFGE 
analysis shows that when measuring microbiological eradication rates 
CONTEPOTM demonstrated a positive difference significant at 
the 95 percent confidence level.\79\
---------------------------------------------------------------------------

    \79\ Skarinsky, et al., ``Per Pathogen Outcomes from the ZEUS 
study, a Multi-center, Randomized, Double-Blind Phase II/III Study 
of ZTI-01 (fosfomycin for injection) versus Piperacillin-Tazobactam 
(P-T) in the Treatment of Patients with Complicated Urinary Tract 
Infections (cUTI) including Acute Pyelonephritis (AP),'' 2017.
---------------------------------------------------------------------------

    With respect to safety, the applicant reports that in the ZEUS 
Study a total of 42.1 percent of the CONTEPOTM patients and 
32.0 percent of the PIP-TAZ patients experienced at least one 
treatment-emergent adverse event, or TEAE. Most TEAEs were mild or 
moderate in severity, and severe TEAEs were uncommon (2.1 percent of 
the CONTEPOTM patients and 1.7 percent of the PIP-TAZ 
patients). The most common TEAEs in both treatment groups were 
transient, asymptomatic laboratory abnormalities and gastrointestinal 
events. Treatment-emergent serious adverse events, or SAEs, were 
uncommon in both treatment groups. There were no deaths in the study 
and one SAE in each treatment group was deemed related to the study 
drug (hypokalemia in a CONTEPOTM patient and renal 
impairment in a PIP-TAZ patient), leading to study drug discontinuation 
in the PIP-TAZ patient. Study drug discontinuations due to TEAEs were 
infrequent and similar between treatment groups (3.0 percent of 
CONTEPOTM patients and 2.6 percent of PIP-TAZ patients). The 
applicant further stated that the most common laboratory abnormality 
TEAEs were increases in the levels of alanine aminotransferase (8.6 
percent of CONTEPOTM patients and 2.6 percent of PIP-TAZ 
patients) and aspartate transaminase (7.3 percent of 
CONTEPOTM patients and 2.6 percent of PIP-TAZ patients). 
None of the aminotransferase elevations were symptomatic or treatment-
limiting, and none of the patients met the criteria for Hy's Law (a 
method of assessing a patient's risk of fatal drug-induced liver 
injury). Outside of the United States, elevated liver aminotransferases 
are listed among undesirable effects in labeling for the use of IV 
fosfomycin. Finally, the applicant stated that hypokalemia occurred in 
71 of the 232 (30.6 percent) CONTEPOTM patients and 29 of 
the 230 (12.6 percent) PIP-TAZ patients. Most decreases in potassium 
levels were mild to moderate in severity. Shifts in potassium levels 
from normal at baseline to hypokalemia, as determined by worst post-
baseline hypokalemia values, were more frequent in the patients in the 
CONTEPOTM group than the patients in the PIP-TAZ group for 
mild (17.7 percent compared to 11.3 percent), moderate (11.2 percent 
compared to 0.9 percent), and severe (1.7 percent compared to 0.4 
percent) categories of hypokalemia. Hypokalemia was deemed a TEAE in 
6.4 percent of the patients receiving CONTEPOTM and 1.3 
percent of the patients receiving PIP-TAZ, and all cases were transient 
and asymptomatic. The applicant noted that post-baseline QT intervals 
calculated using Fridericia's formula, or QTcF, of greater than 450 to 
less than

[[Page 19304]]

or equal to 480 msec (baseline QTcF of less than or equal to 450 msec) 
occurred at a higher frequency in CONTEPOTM patients (7.3 
percent) compared to PIP-TAZ patients (2.5 percent). In the 
CONTEPOTM arm, these results appear to be associated with 
the hypokalemia associated with the salt load of the IV formulation. 
Only 1 patient in the PIP-TAZ group had a baseline QTcF of less than or 
equal to 500 msec and a post-baseline QTcF of greater than 500 msec.
    In addition to the assertions of clinical improvement based on its 
pivotal study, the applicant stated that CONTEPO\TM\ provides a broad 
spectrum of in vitro activity against a variety of clinically important 
MDR Gram-negative pathogens, including ESBL-producing 
Enterobacteriaceae, CRE, and Gram-positive pathogens, including 
methicillin-resistant Staphylococcus aureus, or MRSA, and vancomycin-
resistant enterococci.80 81 82 83 The applicant also 
believes that CONTEPO\TM\, due to its unique mechanism of action, has 
demonstrated synergistic or additive activity in in vitro studies when 
used in combination with other antibiotic classes in preclinical 
studies.84 85 86 The applicant further stated that the use 
of CONTEPO\TM\ has the potential to spare the use of carbapenems and 
other last-line therapies and, thereby, has the potential to reduce the 
development of resistance to existing antibiotic classes.\87\ 
Additionally, the applicant believes that the use of CONTEPO\TM\ has 
the potential to reduce patients' hospital lengths of stay and patient 
morbidity due to the ability to provide early appropriate therapy in 
patients who have been diagnosed with suspected or confirmed MDR 
pathogens.88 89 The applicant also stated that the submitted 
literature provides cases wherein the use of CONTEPO\TM\ could provide 
an important treatment option for patients who have been diagnosed with 
infections caused by pathogens resistant to all other available IV 
antibiotics.90 91 Finally, the applicant asserted that the 
use of CONTEPO\TM\ has immunomodulating activities that potentially may 
improve outcomes for serious infections,\92\ and may protect against 
gentamicin induced nephrotoxicity.\93\
---------------------------------------------------------------------------

    \80\ Flamm, R., et al., ``Activity of fosfomycin when tested 
against US contemporary bacterial isolates,'' Diagnostic 
Microbiology and Infectious Disease, 2018.
    \81\ Mendes, R.E., et al., ``Molecular Characterization of 
Clinical Trial Isolates Exhibiting Increased MIC Results during 
Fosfomycin (ZTI-01) Treatment in a Phase II/III Clinical Trial for 
Complicated Urinary Tract Infections (ZEUS),'' 2018.
    \82\ Rhomberg, P., et al., ``Evaluation of Fosfomycin Activity 
When Combined with Selected Antimicrobial Agents and Tested against 
Bacterial Isolates Using Checkerboard Methods,'' 2017.
    \83\ Falagas, M., et al., ``Antimicrobial susceptibility of 
multidrug-resistant (MDR) and extensively drug-resistant (XDR) 
Enterobacteriaceae isolates to fosfomycin,'' International Journal 
of Antimicrobial Agents, 2010.
    \84\ Flamm, R., et al., ``Time Kill Analyses of Concerning Gram-
Negative Bacteria with Fosfomycin Alone and in Combination with 
Select Antimicrobial Agents,'' 2017.
    \85\ Avery & Nicolau, ``In Vitro Synergy of Fosfomycin and 
Parenteral Antimicrobials Against Carbapenem-Nonsusceptible 
Pseudomonas aeruginosa,'' 2018.
    \86\ Albiero, J., et al., ``Pharmacodynamic Evaluation of the 
Potential Clinical Utility of Fosfomycin and Meropenem in 
Combination Therapy against KPC-2-Producing Klebsiella pneumonia,'' 
Antimicrobial Agents and Chemotherapy, 2016.
    \87\ Hayden, M.K. & Won, S.Y., ``Carbapenem-Sparing Therapy for 
Extended-Spectrum [beta]-Lactamase-Producing E coli and Klebsiella 
pneumoniae Bloodstream Infection,'' JAMA, 2018.
    \88\ Mocarski, et al., ``Economic Burden Associated with Key 
Gram-negative Pathogens among Patients with Complicated Urinary 
Tract Infections across US Hospitals,'' 2014.
    \89\ Lodise, et al., ``Carbapenem-resistant Enterobacteriaceae 
(CRE) or Delayed Appropriate Therapy (DAT)--Does One Affect Outcomes 
More Than the Other Among Patients With Serious Infections Due to 
Enterobacteriaceae?,'' 2017.
    \90\ Chen, L., et al., ``Pan-Resistant New Delhi Metallo-Beta-
Lactamase-Producing Klebsiella pneumonia--Washoe County, Nevada, 
2016,'' 2017.
    \91\ Rios, P., et al., ``Extensively drug-resistant (XDR) 
Pseudomonas aeruginosa identified in Lima, Peru co-expressing a VIM-
2 metallo-blactamase, OXA-1 b-lactamase and GES-1 extended-spectrum 
b-lactamase,'' JMM Case Reports, 2018.
    \92\ Zeitlinger, et al., ``Immunomodulatory effects of 
fosfomycin in an endotoxin model in human blood.'' Journal of 
Antimicrobial Chemotherapy, 2007.
    \93\ Yanagida, et al., ``Protective effect of fosfomycin on 
gentamicin-induced lipid peroxidation of rat renal tissue,'' Chem 
Biol Interact, 2004.
---------------------------------------------------------------------------

    We have several concerns regarding whether CONTEPO\TM\ meets the 
substantial clinical improvement criterion. First, we are concerned 
that we are unable to identify if any of the patients enrolled in the 
ZEUS Study were from the United States. As we have noted in previous 
rulemaking (83 FR 41309), given the geographic variability of 
antibiotic resistance, we are unsure to what extent results from 
studies utilizing an international cohort of patients generate 
inferences that are applicable to the U.S. context and, in particular, 
to the Medicare-eligible population.
    Second, we are unsure if PIP-TAZ is the only proper comparator for 
CONTEPO\TM\, or if other treatments should have been considered as 
well. There are a number of additional antimicrobials with similar 
indications that are available for patients who have been diagnosed 
with cUTIs. Such treatments might include meropenem-vaborbactam or 
plazomicin. Prior studies include a meta-analysis of 10 studies (7 
randomized) comparing the clinical efficacy of IV fosfomycin against 
other antibiotics including sulbenicillin, sulbactam/cefoperazone, 
cefotaxime, fosfomycin/colistin, and minocycline/cefuzonam. This meta-
analysis did not observe a difference in clinical efficacy between 
fosfomycin and respective comparators (odds ratio (OR) 1.44, 95 percent 
CI (0.96, 2.15)) irrespective of monotherapy (OR 1.41, 95 percent CI 
(0.83, 2.39)) or combination therapy (OR 1.48, 95 percent CI (0.81, 
2.71.)). The same results were obtained when studies with poor quality 
were excluded (OR 1.45, 95 percent CI (0.94, 2.24)).\94\
---------------------------------------------------------------------------

    \94\ Grabien, et al., ``Intravenous fosfomycin--Back to the 
Future; Systematic Review and Meta-analysis of the Clinical 
Literature,'' Clinical Microbiology and Infection, 2017.
---------------------------------------------------------------------------

    Third, we have two methodological concerns regarding the 
applicant's assertions based on the ZEUS Study. There does not appear 
to be any statistical comparison of the patients in each arm in terms 
of demographics and, therefore, it is difficult to assess whether the 
two intervention arms are balanced as the applicant inferred. We 
acknowledge that use of a double-blinded, randomized study design 
(which was used in the ZEUS Study) should minimize bias and control for 
unmeasured variables between treatment arms. However, we are concerned 
about a lack of detail on the different dropout rates of patients 
within each arm of the ZEUS Study, including data on causes and 
treatment of patients that dropped out and any bias that might 
introduce. We also are concerned that the ZEUS Study did not 
demonstrate a superior clinical outcome with statistical significance 
in its primary endpoint. Rather, the applicant is asserting the 
technology represents a substantial clinical improvement on the basis 
of meeting a secondary endpoint, the cure rates based on additional 
PFGE analysis. In addition, we are concerned that the use of m-MITT, 
rather than ITT, may have biased the results upwards by focusing on a 
subset of the treatment group, rather than the entire random 
sample.\95\
---------------------------------------------------------------------------

    \95\ Beckett, R.D., Loeser, K.C., Bowman, K.R., Towne, T.G., 
``Intention-to-treat and transparency of related practices in 
randomized, controlled trials of anti-infectives,'' BMC Med Res 
Methodol, 2016, vol. 16(1), pp. 106, Published August 24, 2016, 
doi:10.1186/s12874-016-0215-2.
---------------------------------------------------------------------------

    Finally, we are concerned that many of the assertions the applicant 
has made regarding the efficacy of CONTEPOTM on MDR gram-
negative pathogens and broader public health benefits come from in 
vitro studies or may be speculative in nature. It may be helpful

[[Page 19305]]

to have further evidence, particularly prospectively collected and 
tested clinical data, to support the assertions that the use of 
CONTEPOTM reduces hospital lengths of stay and patient 
morbidity, and enhances antibiotic stewardship.
    We are inviting public comments on whether CONTEPOTM 
meets the substantial clinical improvement criterion.
    Below we summarize and respond to a written public comment received 
in response to the New Technology Town Hall meeting notice published in 
the Federal Register regarding the substantial clinical improvement 
criterion for CONTEPOTM.
    Comment: In response to a question presented at the New Technology 
Town Hall meeting, the applicant explained why the post-hoc reanalysis 
of the primary endpoint (overall success, a composite of clinical cure 
and microbiologic eradication) from the ZEUS Study using pulse-field 
gel electrophoresis, which the applicant asserted demonstrated a 
statistically significant difference between CONTEPOTM and 
PIP-TAZ, is clinically important. The applicant stated that the post-
hoc analysis was able to differentiate the patients who had eradication 
of the identified and treated baseline pathogen from those patients who 
developed or were likely to develop another infection from a newly 
acquired pathogen (different strain) following the ~2-week period 
between the end of IV therapy and the test-of-cure evaluation. However, 
the applicant indicated that there are many reasons why patients may 
acquire another pathogen and/or develop new infections after completing 
IV therapy, including indwelling urinary catheters or instrumentation 
(for example, nephrostomy tubes, ureteric stents, etc.) or anatomical 
abnormalities. The applicant stated that because of these confounding 
factors, the PFGE reanalysis allowed for the differentiation of the 
true persistence of the same pathogen that was present at baseline from 
a different pathogen that might look the same, but was clearly 
genetically distinct.
    Response: We appreciate the applicant's further explanation of the 
PFGE analysis. We will take this information into consideration when 
deciding whether to approve new technology add-on payments for 
CONTEPOTM.
e. DuraGraft[supreg] Vascular Conduit Solution
    Somahlution, Inc. submitted an application for new technology add-
on payments for DuraGraft[supreg] for FY 2020. (We note that the 
applicant previously submitted applications for new technology add-on 
payments for DuraGraft[supreg] for FY 2018 and FY 2019, which were 
withdrawn.) According to the applicant, DuraGraft[supreg] is designed 
to protect the endothelium of the vein graft by mitigating ischemic 
reperfusion injury (IRI), the basis of vein graft disease (VGD) and 
vein graft failure (VGF), both of which are intimately linked to graft 
and patient outcomes.\96\ \97\ \98\ According to the applicant, 
specific VGD and VGF clinical outcomes affected by the use of 
DuraGraft[supreg] include reductions in myocardial infarction (MI), 
repeat revascularization and major adverse cardiovascular events 
(MACE). The applicant stated that DuraGraft[supreg] is a preservation 
solution, not a storage solution, used during standard graft handling, 
flushing, and bathing steps.
---------------------------------------------------------------------------

    \96\ Salvadori, M., Rosso, G., and Bertoni, E., ``Update on 
Ischemia-reperfusion Injury in Kidney Transplantation: Pathogenesis 
and Treatment,'' World Transplant, June 24, 2015, vol. 5(2), pp. 52-
67.
    \97\ Osgood, M.J., Hocking, K.M., Voskresensky, I.V., et al., 
``Surgical vein graft preparation promotes cellular dysfunction, 
oxidative stress, and intimal hyperplasia in human saphenous vein,'' 
J Vasc Surg, 2014, vol. 60, pp. 202-211.
    \98\ Shuhaiber, J.H., Evans, A.N., Massad, M.G., and Geha, A.S., 
``Mechanisms and Future Directions for Prevention of Vein Graft 
Failure in Coronary Bypass Surgery,'' European Journal of Cardio-
Thoracic Surgery, vol. 22, Issue 3, September 1, 2002, pp. 387-396.
---------------------------------------------------------------------------

    The applicant indicated that vein graft endothelial damage is the 
principal mediator of VGD following grafting in bypass surgeries.\99\ 
\100\ According to the applicant, the endothelium can be destroyed or 
damaged intraoperatively through the acute physical stress of 
harvesting, storage, and handling, and through more insidious processes 
such as those associated with ischemic injury, metabolic stress and 
oxidative damage. The applicant also noted that vein graft solutions 
can independently damage the endothelium during the harvesting and 
storage stages prior to vein grafting. The applicant also referred to 
more recent information to depict that damage associated with the use 
of graft storage solutions has the highest correlation with the 
development of 12-month VGF following coronary artery bypass grafting 
(CABG).\101\ More specifically regarding vein graft solutions, the 
applicant asserted that there are two processes associated with current 
vein graft solutions that lead to IRI and ultimately VGD: (1) Current 
vein graft solutions cause ``solution damage;'' and (2) current vein 
graft solutions do not protect against IRI, the basis for VGD.\102\ 
\103\ \104\ \105\ \106\ \107\ \108\ According to the applicant, current 
vein graft solutions are used to flush and store vascular grafts during 
the ex vivo ischemic interval of the surgical procedure. However, these 
solutions do not protect the graft from ischemia reperfusion injury and 
have no preservation ability. Further, the applicant asserted that some 
of the solutions are incompatible with graft tissue resulting in 
ischemic damage that is compounded by ``solution damage''.\109\ \110\ 
\111\
---------------------------------------------------------------------------

    \99\ Harskamp, R.E., Alexander, J.H., Schulte, P.J., Brophy, 
C.M., Mack, M.J., Peterson, E.D., Williams, J.B., Gibson, C.M., 
Califf, R.M., Kouchoukos, N.T., Harrington, R.A., Ferguson, Jr., 
T.B., Lopes, R.D., ``Vein Graft Preservation Solutions, Patency, and 
Outcomes After Coronary Artery Bypass Graft Surgery Follow-up From 
PREVENT IV Randomized Clinical Trial,'' JAMA Surg., 2014, vol. 
149(8), pp. 798-805.
    \100\ Testa, L., Bedogni, F., ``Treatment of Saphenous Vein 
Graft Disease: Never Ending Story of the Eternal Return,'' Res 
Cardiovasc Med., 2014, vol. 3(3), e21092.
    \101\ Ibid.
    \102\ Shinjo, H., et al., ``Effect of irrigation solutions for 
arthroscopic surgery on intraarticular tissue: comparison in human 
meniscus-derived primary cell culture between lactate Ringer's 
solution and saline solution,'' Journal of Orthopaedic Research, 
2002, vol. 20, pp. 1305-1310.
    \103\ Breborowicz, A. and Oreopoulos, D.G., ``Is normal saline 
harmful to the peritoneum?'', Perit Dial Int., 2005 Apr; 25 Suppl 
4:S67-70.
    \104\ Pusztaszeri, M.P., Seelentag, Walter, Bosman, F.T., 
``Immunohistochemical Expression of Endothelial Markers CD31, CD34, 
von Willebrand Factor, and Fli-1 in Normal Human Tissues,'' Journal 
of Histochemistry & Cytochemistry, 2006, vol. 54(4), pp. 385-395.
    \105\ Polubinska, A., et al., ``Normal Saline induces oxidative 
stress in peritoneal mesoyhelial cells,'' Journel of Pediatric 
Surgery, 2008, vol. 43, pp. 1821-1826.
    \106\ Sengupta, S., Prabhat, K., Gupta, V., Vij, H., Vij, R., 
Sharma, V., ``Artefacts Produced by Normal Saline When Used as a 
Holding Solution for Biopsy Tissues in Transit,'' J. Maxillofac. 
Oral Surg., (Apr-June 2014), vol. 13(2), pp. 148-151.
    \107\ Wilbring, M., Tugtekin, S.M., Zatschler, B., Ebner, A., 
Reichenspurner, H., Matschke, K., Deussen, A., ``Even short-time 
storage in physiological saline solution impairs endothelial 
vascular function of saphenous vein grafts,'' Eur J Cardiothorac 
Surg., 2011 Oct, vol. 40(4), pp. 811-815.
    \108\ Weiss, D.R., et al., ``Extensive deendothelialization and 
thrombogenicity in routinely prepared vein grafts for coronary 
bypass operations: facts and remedy,'' Int J Clin Exp Med, 2009, 
vol. 2, pp. 95-113.
    \109\ Weiss, D.R., et al., ``Extensive deendothelialization and 
thrombogenicity in routinely prepared vein grafts for coronary 
bypass operations: facts and remedy,'' Int J Clin Exp Med, 2009, 
vol. 2, pp. 95-113.
    \110\ Ibid.
    \111\ Thatte, H.S., Biswas, K.S., Najjar, S.F., Birjiniuk, V., 
Crittenden, M.D., Michel, T., and Khuri, S.F., ``Multi-Photon 
Microscopic valuation of Saphenous Vein Endothelium and Its 
Preservation With a New Solution, GALA,'' Annals Thoracic Surgery, 
2003, vol. 75, pp. 1145-52.
---------------------------------------------------------------------------

    The applicant explained that there are two mechanisms leading to 
VGD: (1) Endothelial damage associated with the

[[Page 19306]]

harvesting and storage processes; and (2) VGD pathophysiological 
changes that occur in damaged vein grafts following reperfusion at the 
time of graft anastomosis. According to the applicant, these changes 
are apparent within minutes to hours of grafting and are manifested as 
endothelial dysfunction, death and/or denudation and include pro-
inflammatory, pro-thrombogenic and aberrant proliferative changes 
within the graft. The applicant further characterized these changes as 
initial endothelial reperfusion phase responses, which set in motion a 
damage-response domino-like effect thereby perpetuating a cycle of 
prolonged reperfusion phase injury with subsequent VGD.
    The applicant further noted that endothelial dysfunction and 
inflammation results not only in the diminished ability of the graft to 
respond appropriately to new blood flow patterns, but also may thwart 
positive adaptive vein graft remodeling. According to the applicant, 
this is because proper vein graft remodeling is dependent upon a 
functional endothelial response to shear stress that involves the 
production of remodeling factors by the endothelium including nitro 
vasodilators, prostaglandins, lipoxyoxygenases, hyperpolarizing factors 
and other growth factors.\112\ Therefore, damaged, missing and/or 
dysfunctional endothelial cells prevent graft adaption, which makes the 
graft susceptible to shear mediated endothelial damage. The applicant 
explained that the collective damage results in intimal hyperplasia or 
graft wall thickening that is the basis for atheroma development, 
stenosis and subsequent lumen narrowing leading to the end state of 
VGD, VGF.\113\ The applicant also noted that the pathologic changes 
leading to VGD, occlusion and loss of vasomotor function, are well 
documented.\114\ \115\ \116\ \117\ \118\ \119\ \120\ Presenting an 
intact functional endothelial layer at the time of grafting is, 
therefore, critical to protecting the graft and its associated 
endothelium from damage that occurs post-grafting, in turn conferring 
protection against graft failure.\121\ The applicant stated that given 
the low success rate of VGF intervention after surgery (for example, 
percutaneous coronary intervention and saphenous vein graft 
intervention \122\), addressing graft endothelial protection at the 
time of surgery is critical.
---------------------------------------------------------------------------

    \112\ Owens, C.D., ``Adaptive changes in autogenous vein grafts 
for arterial reconstruction: Clinical Implications,'' J Vasc Surg., 
2010 March; vol. 51(3), pp. 736-746.
    \113\ Murphy, G.J. and Angelini, G.D., ``Insights into the 
pathogenesis of vein graft disease: lessons from intravascular 
ultrasound,'' Cardiovascular Ultrasound, 2004, 2:8.
    \114\ Verrier, E.D., Boyle, E.M., ``Endothelial cell injury in 
cardiovascular surgery: an overview,'' AnnThorac Surg, 1996, vol. 
64, pp. S2-S8.
    \115\ Harskamp, R.E., Lopes, R.D., Baisden, C.E., et al., 
``Saphenous vein graft failure after coronary artery bypass surgery: 
pathophysiology, management, and future directions,'' Ann Surg., 
2013 May, vol. 257(5), pp. 824-33.
    \116\ Sellke, F.W., Boyle, E.M., Verrier, E.D., ``The 
pathophysiology of vasomotor dysfunction,'' Ann Thorac Surg, 1996, 
vol. 64, pp. S9-S15.
    \117\ Motwani, J.G., Topol, E.J., ``Aortocoronary saphenous vein 
graft disease: pathogenesis, predisposition and prevention,'' 
Circulation, 1998, vol. 97(9), pp. 916-31.
    \118\ Mills, N.L., Everson, C.T., ``Vein graft failure,'' Curr 
Opin Cardiol, 1995, vol. 10, pp. 562-8.
    \119\ Davies, M.G., Hagen, P.O., ``Pathophysiology of vein graft 
failure: a review,'' Eur J Vasc Endovasc Surg, 1995, vol. 9, pp. 7-
18.
    \120\ Edmunds, L.H., ``Techniques of myocardial 
revascularization. In: Edmunds LH, ed. Cardiac surgery in the 
adult,'' New York: McGraw-Hill, 1997, pp. 481-534.
    \121\ Kim FY, Marhefka G, Ruggiero NJ, et al. Saphenous vein 
graft disease: review of pathophysiology, prevention, and treatment. 
Cardiol Rev, 2013;21(2):101-9.
    \122\ Testa, L., Bedogni, F., ``Treatment of Saphenous Vein 
Graft Disease: Never Ending Story of the Eternal Return,'' Res 
Cardiovasc Med., 2014, vol. 3(3), e21092.
---------------------------------------------------------------------------

    With respect to the newness criterion, DuraGraft[supreg] has not 
received FDA approval as of the time of the development of this 
proposed rule. The applicant indicated that it anticipates FDA approval 
of its premarket application by July 1, 2019. The applicant also 
indicated that ICD-10-PCS code XY0VX83 (Extracorporeal introduction of 
endothelial damage inhibitor to vein graft, New Technology Group 3) 
would identify procedures involving the use of the DuraGraft[supreg] 
technology.
    As discussed earlier, if a technology meets all three of the 
substantial similarity criteria, it would be considered substantially 
similar to an existing technology and would, therefore, not be 
considered ``new'' for purposes of new technology add-on payments.
    With regard to the first criterion, whether a product uses the same 
or similar mechanism of action to achieve a therapeutic outcome, 
according to the applicant, there are currently no other treatment 
options available with the same mechanism of action as that of 
DuraGraft[supreg]. According to the applicant, the currently available 
vein graft solutions, which consist of saline, buffered saline, blood, 
and electrolyte solutions, are not preservation solutions but 
``storage'' solutions that do not protect the graft vascular 
endothelium nor mitigate IRI, the basis of VGD.\123\ \124\ \125\ \126\ 
The applicant stated that these solutions are used merely to keep 
grafts wet from the time they are harvested until the time they are 
used in CABG. According to the applicant, exposure of saphenous vein 
grafts to these solutions has been shown to cause significant damage to 
the graft within minutes.\127\ \128\ \129\ \130\
---------------------------------------------------------------------------

    \123\ Salvadori, M., Rosso, G., and Bertoni, E., ``Update on 
Ischemia-reperfusion Injury in Kidney Transplantation: Pathogenesis 
and Treatment,'' World Transplant, June 24, 2015, vol. 5(2), pp. 52-
67.
    \124\ Lee, J.C. and Christie, J.D., ``Primary Graft 
Dysfunction,'' Proc Am Thorac Soc., 2009, vol. 6, pp 39-46.
    \125\ Osgood, M.J., Hocking, K.M., Voskresensky, I.V., et al., 
``Surgical vein graft preparation promotes cellular dysfunction, 
oxidative stress, and intimal hyperplasia in human saphenous vein,'' 
J Vasc Surg, 2014, vol. 60, pp. 202-211.
    \126\ Shuhaiber, J.H., Evans, A.N., Massad, M.G., and Geha, 
A.S., ``Mechanisms and Future Directions for Prevention of Vein 
Graft Failure in Coronary Bypass Surgery,'' European Journal of 
Cardio-Thoracic Surgery, vol. 22, Issue 3, September 1, 2002, pp. 
387-396.
    \127\ Weiss, D.R., et al., ``Extensive deendothelialization and 
thrombogenicity in routinely prepared vein grafts for coronary 
bypass operations: facts and remedy,'' Int J Clin Exp Med, 2009, 
vol. 2, pp. 95-113.
    \128\ Wilbring, M., Tugtekin, S.M., Zatschler, B., Ebner, A., 
Reichenspurner, H., Matschke, K., Deussen, A., ``Even short-time 
storage in physiological saline solution impairs endothelial 
vascular function of saphenous vein grafts,'' Eur J Cardiothorac 
Surg., 2011 Oct, vol. 40(4), pp. 811-815.
    \129\ Tsakok, M., Montgomery-Taylor, S. and Tsakok, T., 
``Storage of saphenous vein grafts prior to coronary artery bypass 
grafting: is autologous whole blood more effective than saline in 
preserving graft function?'' Inter Cardiovasc Thorac Surg, 2012, 
vol. 15, pp. 720-25.
    \130\ Thatte, H.S., Biswas, K.S., Najjar S.F., Birjiniuk, V., 
Crittenden, M.D., Michel, T., and Khuri, S.F., ``Multi-Photon 
Microscopic valuation of Saphenous Vein Endothelium and Its 
Preservation With a New Solution, GALA.'' Annals Thoracic Surgery, 
2003, vol. 75, pp. 1145-52.
---------------------------------------------------------------------------

    The applicant explained that DuraGraft[supreg] is a formulated 
``preservation'' solution that can be used during handling, flushing, 
and bathing steps without changing standard surgical practice. 
According to the applicant, the handling step includes using an 
atraumatic surgical technique, avoiding over pressurization and 
checking for leakage, excessive handling and distortion. The applicant 
further noted that vascular segments (that become vascular grafts) are 
comprised of a number of different cell types that function together in 
an integrated manner post-grafting and, therefore, protection of all 
cell types during graft flushing and storage is critical for 
maintenance of graft viability and normal graft functioning.
    The applicant indicated that DuraGraft[supreg] separates itself 
from current vein graft solutions through its unique

[[Page 19307]]

composition of ingredients, a physiologic saline solution that combines 
free radical scavengers and antioxidants (glutathione, ascorbic acid) 
and nitric oxide synthase substrate (L-arginine), as discussed later in 
this section. According to a summary of ex vivo performance data and 
studies provided by the applicant, the use of DuraGraft[supreg] has 
been shown to preserve vascular graft viability, as well as graft 
functional and structural integrity during ex vivo storage and 
flushing.\131\ \132\ \133\ The applicant noted that these studies 
evaluated graft cellular viability and structural integrity and 
assessed molecular and biochemical markers of normal endothelial 
functioning. Specifically, endothelial and smooth muscle cells were 
assessed.
---------------------------------------------------------------------------

    \131\ Thatte, H.S., Biswas, K.S., Najjar S.F., Birjiniuk, V., 
Crittenden, M.D., Michel, T., and Khuri, S.F., ``Multi-Photon 
Microscopic valuation of Saphenous Vein Endothelium and Its 
Preservation With a New Solution, GALA.'' Annals Thoracic Surgery, 
2003, vol. 75, pp. 1145-52.
    \132\ Hussaini, B.E., Lu, X.G., Wolfe, A., Thatte, H.S., 
``Evaluation of Endoscopic Vein extraction on Structural and 
Functional Viability of Saphenous Vein Endothelium,'' J Cardothorac 
Surg, 2011, vol. 6, pp. 82-89.
    \133\ Rousou, L.J., Taylor, K.B., Lu, X.G., et al., ``Saphenous 
vein conduits harvested by endoscopic technique exhibit structural 
and functional damage,'' Ann Thorac Surg, 2009, vol. 87, pp. 62-70.
---------------------------------------------------------------------------

    All veins used in these studies were collected from patients 
undergoing cardiac bypass surgery at the Boston VA or Saint Joseph's 
Hospital of Atlanta. Veins were harvested using the ``Open Saphenous 
Vein Harvest'' (OSVH) technique.\134\ \135\ \136\ Segments of the 
collected veins not being used for the bypass surgery were used for the 
performance bench studies.
---------------------------------------------------------------------------

    \134\ Ibid.
    \135\ Hussaini, B.E., Lu, X.G., Wolfe, A., Thatte, H.S., 
``Evaluation of Endoscopic Vein extraction on Structural and 
Functional Viability of Saphenous Vein Endothelium,'' J Cardothorac 
Surg, 2011, vol. 6, vol. 82-89.
    \136\ Thatte, H.S., Biswas, K.S., Najjar, S.F., Birjiniuk, V., 
Crittenden, M.D., Michel, T., and Khuri, S.F., ``Multi-Photon 
Microscopic valuation of Saphenous Vein Endothelium and Its 
Preservation With a New Solution, GALA.'' Annals Thoracic Surgery, 
2003, vol. 75, pp. 1145-52.
---------------------------------------------------------------------------

    According to the applicant, viability studies conducted in 
conjunction with multi-photon microscopy demonstrated a protective 
effect from the use of DuraGraft[supreg] on vascular endothelial 
viability and graft structural integrity for storage times of up to 5 
hours at room temperature (21 [deg]C).\137\ The applicant also stated 
that, conversely, vascular segments were not able to be maintained in a 
viable condition when stored for as short a time as 15 minutes in 
standard-of-care solutions consistent with what has been published by 
others. According to the applicant, DuraGraft[supreg] demonstrated its 
ability to preserve the viability, structure and function of 
endothelium in radial and internal mammary arteries, as well as 
saphenous veins for extended periods.\138\
---------------------------------------------------------------------------

    \137\ Ibid.
    \138\ Ibid.
---------------------------------------------------------------------------

    According to the information submitted by the applicant, the 
ingredients found in DuraGraft[supreg] play a primary role in 
DuraGraft[supreg] exhibiting a different mechanism of action from other 
solutions that are commonly used to treat the same disease process and 
patient population. According to the study cited by the applicant, the 
rapid loss of endothelial cell structural and functional integrity in 
saphenous veins stored in standard storage solutions can be avoided by 
incorporating a physiologic saline solution that combines free radical 
scavengers and antioxidants (glutathione, ascorbic acid) and nitric 
oxide synthase substrate (L-arginine) providing a favorable environment 
and cellular support during ex vivo storage.\139\ The same study also 
indicated that these three ingredients were chosen because of their 
putative effect on endothelial cell function and that their use may act 
synergistically to enhance the cell preservation properties of the 
solution. The authors of the study asserted that glutathione increases 
L-arginine transport in endothelial cells and may lead to the formation 
of biologically active S-nitrosoglutathione and to the stimulation of 
endothelial nitric oxide synthase (eNOS) activity, nitric oxide 
generation, and coronary vasodilatation. According to the authors, 
ascorbic acid also increases eNOS activity by preserving endothelium-
derived nitric oxide bioactivity by possibly scavenging superoxide 
anions and preventing oxidative destruction of tetrahydrobiopterin, an 
eNOS cofactor. Furthermore, according to the study, the presence of 
ascorbic acid in a physiologic saline solution may prevent the 
oxidation of this eNOS cofactor during vessel storage and help maintain 
eNOS function and nitric oxide generation in vascular endothelium. The 
study authors also noted that ascorbic acid, by its reducing property, 
may assist sustained long-term release of nitric oxide from these 
compounds in vessels preserved in a physiologic saline solution and, 
therefore, help maintain the patency and tone of the vessels during 
storage. Additionally, according to the authors of the study, ascorbic 
acid mediated reversal of endothelial dysfunction, reduced platelet 
activation and leukocyte adhesion, inhibited smooth muscle cell 
proliferation and lipid peroxidation, and increased prostacyclin 
production which have been demonstrated in numerous cardiovascular 
pathologies. Finally, the authors stated that L-arginine is a known 
substrate of nitric oxide synthase and has been shown to decrease 
neutrophil-endothelial cell interactions in inflamed vessels.\140\
---------------------------------------------------------------------------

    \139\ Thatte, H.S., Biswas, K.S., Najjar, S.F., Birjiniuk, V., 
Crittenden, M.D., Michel, T., and Khuri, S.F., ``Multi-Photon 
Microscopic valuation of Saphenous Vein Endothelium and Its 
Preservation With a New Solution, GALA.'' Annals Thoracic Surgery, 
2003, vol. 75, pp. 1145-52.
    \140\ Ibid.
---------------------------------------------------------------------------

    Regarding the second criterion, whether a product is assigned to 
the same or different MS-DRG, according to the applicant, cases 
involving patients who may be eligible to receive treatment involving 
DuraGraft[supreg] would be assigned to the same MS-DRGs as patients who 
received treatment involving heparinized blood, saline, and electrolyte 
solutions.
    Regarding the third criterion, whether the new use of the 
technology involves the treatment of the same or similar type of 
disease and the same or similar patient population, the applicant 
indicated that heparinized blood, saline and electrolyte solutions 
involve treatment of the same disease process and the same patient 
population as DuraGraft[supreg].
    Based on the applicant's statements presented above, we are 
concerned that the mechanism of action of DuraGraft[supreg] may be the 
same or similar to other vein graft storage solutions. Specifically, we 
are concerned that current solutions used in vein graft surgical 
procedures may be similar to DuraGraft[supreg] in composition and 
treatment indication and, therefore, have the same or similar mechanism 
of action. We are inviting public comments on whether the 
DuraGraft[supreg] meets the newness criterion.
    With regard to the cost criterion, the applicant conducted the 
following analysis to demonstrate that the technology meets the cost 
criterion. In order to identify the range of MS-DRGs that cases 
representing potential patients who may be eligible for treatment using 
DuraGraft[supreg] may map to, the applicant identified all MS-DRGs for 
patients who underwent CABG. Specifically, the applicant searched the 
FY 2017 MedPAR file for Medicare fee-for-service inpatient hospital 
claims submitted between October 1, 2016 and September 30, 2017, and 
identified potential cases that may be eligible for treatment using 
DuraGraft[supreg] by the following ICD-10-PCS procedure codes:

[[Page 19308]]



------------------------------------------------------------------------
ICD-10-PCS  procedure code                Code description
------------------------------------------------------------------------
021009W...................  Bypass coronary artery, one artery from
                             aorta with autologous venous tissue, open
                             approach.
02100AW...................  Bypass coronary artery, one artery from
                             aorta with autologous arterial tissue, open
                             approach.
021049W...................  Bypass coronary artery, one artery from
                             aorta with autologous venous tissue,
                             percutaneous endoscopic approach.
02104AW...................  Bypass coronary artery, one artery from
                             aorta with autologous arterial tissue,
                             percutaneous endoscopic approach.
021109W...................  Bypass coronary artery, two arteries from
                             aorta with autologous venous tissue, open
                             approach.
02110AW...................  Bypass coronary artery, two arteries from
                             aorta with autologous arterial tissue, open
                             approach.
021149W...................  Bypass coronary artery, two arteries from
                             aorta with autologous venous tissue,
                             percutaneous endoscopic approach.
02114AW...................  Bypass coronary artery, two arteries from
                             aorta with autologous arterial tissue,
                             percutaneous endoscopic approach.
021209W...................  Bypass coronary artery, three arteries from
                             aorta with autologous venous tissue, open
                             approach.
02120AW...................  Bypass coronary artery, three arteries from
                             aorta with autologous arterial tissue, open
                             approach.
021249W...................  Bypass coronary artery, three arteries from
                             aorta with autologous venous tissue,
                             percutaneous endoscopic approach.
02124AW...................  Bypass coronary artery, three arteries from
                             aorta with autologous arterial tissue,
                             percutaneous endoscopic approach.
021309W...................  Bypass coronary artery, four or more
                             arteries from aorta with autologous venous
                             tissue, open approach.
02130AW...................  Bypass coronary artery, four or more
                             arteries from aorta with autologous
                             arterial tissue, open approach.
021349W...................  Bypass coronary artery, four or more
                             arteries from aorta with autologous venous
                             tissue, percutaneous endoscopic approach.
02134AW...................  Bypass coronary artery, four or more
                             arteries from aorta with autologous
                             arterial tissue, percutaneous endoscopic
                             approach.
------------------------------------------------------------------------

    This resulted in potential eligible cases spanning 100 MS-DRGs, 
with approximately 93 percent of all of these potential cases, 66,553, 
mapping to the following 10 MS-DRGs:

------------------------------------------------------------------------
          MS-DRG                            MS-DRG title
------------------------------------------------------------------------
MS-DRG 003................  Extracorporeal Membrane Oxygenation (ECMO)
                             or Tracheostomy with Mechanical Ventilation
                             >96 Hours or Principal Diagnosis Except
                             Face, Mouth & Neck with Major Operating
                             Room Procedure.
MS-DRG 216................  Cardiac Valve and Other Major Cardiothoracic
                             Procedures with Cardiac Catheterization
                             with MCC.
MS-DRG 219................  Cardiac Valve and Other Major Cardiothoracic
                             Procedures without Cardiac Catheterization
                             with MCC.
MS-DRG 220................  Cardiac Valve and Other Major Cardiothoracic
                             Procedures without Cardiac Catheterization
                             with CC.
MS-DRG 228................  Other Cardiothoracic Procedures with MCC.
MS-DRG 229................  Other Cardiothoracic Procedures without CC.
MS-DRG 233................  Coronary Bypass with Cardiac Catheterization
                             with MCC.
MS-DRG 234................  Coronary Bypass with Cardiac Catheterization
                             without MCC.
MS-DRG 235................  Coronary Bypass without Cardiac
                             Catheterization with MCC.
MS-DRG 236................  Coronary Bypass without Cardiac
                             Catheterization without MCC.
------------------------------------------------------------------------

    Using the 66,553 identified cases, the average case-weighted 
unstandardized charge per case was $212,885. The applicant then 
standardized the charges. The applicant did not remove charges for any 
current treatment because the applicant indicated that there are no 
other current treatment options available. The applicant noted that it 
did not provide an inflation factor to project future charges. The 
applicant added $2,751 in charges for the costs of the 
DuraGraft[supreg] technology. This charge was created by assuming the 
DuraGraft[supreg] technology will cost $850 per unit as estimated by 
the applicant, and by applying the national average CCR for implantable 
devices of 0.309 from the FY 2019 IPPS/LTCH PPS final rule (83 FR 
41273) to the cost of the device. According to the applicant, no 
further charges or related charges were added. Based on the FY 2019 
IPPS/LTCH PPS final rule correction notice data file thresholds, the 
average case-weighted threshold amount was $172,965. The final average 
case-weighted standardized charge per case was $195,799. Because the 
final average case-weighted standardized charge per case exceeds the 
average case-weighted threshold amount, the applicant maintained that 
the technology meets the cost criterion. We are inviting public 
comments on whether DuraGraft[supreg] meets the cost criterion.
    With respect to the substantial clinical improvement criterion, the 
applicant asserted that the use of DuraGraft[supreg] significantly 
reduces clinical complications, such as MI, repeat revascularization 
and MACE, associated with VGF following CABG surgery. The applicant 
cited the following studies and report, each of which is summarized 
below, to substantiate its assertions regarding substantial clinical 
improvement: (1) Project of Ex-vivo Vein Graft Engineering via 
Transfection (PREVENT IV) Subanalysis; (2) European Retrospective Pilot 
Study (unpublished); (3) U.S. Department of Veterans Affairs (USDVA) 
Hospital Retrospective Study; and (4) the SWEDEHEART 2016 Annual 
Report.
    PREVENT IV is a prospective study that enrolled 3,000 patients and 
included protocol driven angiograms at 12 months post-CABG, as opposed 
to clinically-driven angiograms to evaluate the true incidence of VGF 
following CABG surgery where standard-of-care solutions were used.\141\ 
Harskamp, et al. conducted subanalyses of the study data and found from 
dozens of factors evaluated for impact on the development of 12-month 
VGF (VGF was defined as a stenosis of the vein graft diameter of 75 
percent or greater) that exposure to solutions used in PREVENT IV 
(saline, blood, or buffered saline) for intra-operative graft wetting 
and storage have the largest correlation with the development of 
VGF.142 143

[[Page 19309]]

According to the applicant, short-term exposure of free vascular grafts 
to these solutions is routine in CABG operations, where 10 minutes to 3 
hours may elapse between the vein harvest and 
reperfusion.144 145 According to Harskamp, et al., the 
results of the PREVENT IV study showed that the majority of patients 
had grafts preserved in saline, 1,339 patients (44.4 percent), followed 
by 971 patients (32.2 percent) with grafts preserved in blood, and 507 
patients (16.8 percent) with grafts preserved in buffered saline. One-
year VGF rates were much lower in the patients who were treated in the 
buffered saline group than in the patients who were treated in the 
saline group (patient-level odds ratio [OR], 0.59 [95 percent CI, 0.45-
0.78; P<.001]; graft-level OR, 0.63 [95 percent CI, 0.49-0.79; P<.001]) 
or in the patients who were treated in the blood group (patient-level 
OR, 0.62 [95 percent CI, 0.46-0.83; P=.001]; graft-level OR, 0.63 [95 
percent CI, 0.48-0.81; P<.001]), and the use of buffered saline 
solution also tended to be associated with a lower 5-year risk for 
death, MI or subsequent revascularization compared with saline (hazard 
ratio, 0.81 [95 percent CI, 0.46-0.83; P=.001]; graft-level OR, 0.63 
[95 percent CI, 0.48-0.81; P<.001]).\146\ The applicant asserted that 
the results from the PREVENT IV subanalyses support the notion that 
unlike DuraGraft[supreg], standard-of-care solutions heparinized saline 
and heparinized autologous blood used for intra-operative graft wetting 
and storage, were never designed to protect vascular grafts and have 
also demonstrated an inability to protect against ischemic injury, 
actively harming the graft endothelium as 
well.147 148 149 150
---------------------------------------------------------------------------

    \141\ Alexander, J.H., Hafley, G., Harrington, R.A., et al., 
``Efficacy and safety of Edifoligide, an E2F Transcription Factor 
Decoy, for Prevention of Vein Graft Failure Following Coronary 
Artery Bypass Graft Surgery: PREVENT IV: A Randomized Controlled 
Trial,'' JAMA, 2005, vol. 294, pp. 2446-54.
    \142\ Harskamp, R.E., Alexander, J.H., Schulte, P.J., Brophy, 
C.M., Mack, M.J., Peterson, E.D., Williams, J.B., Gibson, C.M., 
Califf, R.M., Kouchoukos, N.T., Harrington, R.A., Ferguson, Jr., 
T.B., Lopes, R.D., ``Vein Graft Preservation Solutions, Patency, and 
Outcomes After Coronary Artery Bypass Graft Surgery Follow-up From 
PREVENT IV Randomized Clinical Trial,'' JAMA Surg., 2014, vol. 
149(8), pp. 798-805.
    \143\ Hess, C.N., Lopes, R.D., Gibson, C.M., et al., ``Saphenous 
vein graft failure after coronary artery bypass surgery: insights 
from PREVENT IV,'' Circulation, 2014 Oct 21, vol. 130(17), pp. 1445-
51.
    \144\ Motwani, J.G., Topol, E.J., ``Aortocoronary saphenous vein 
graft disease: pathogenesis, predisposition and prevention,'' 
Circulation, 1998, vol. 97(9), pp. 916-31.
    \145\ Mills, N.L., Everson, C.T., ``Vein graft failure,'' Curr 
Opin Cardiol, 1995, vol. 10, pp. 562-8.
    \146\ Harskamp, R.E., Alexander, J.H., Schulte, P.J., Brophy, 
C.M., Mack, M.J., Peterson, E.D., Williams, J.B., Gibson, C.M., 
Califf, R.M., Kouchoukos, N.T., Harrington, R.A., Ferguson, Jr., 
T.B., Lopes, R.D., ``Vein Graft Preservation Solutions, Patency, and 
Outcomes After Coronary Artery Bypass Graft Surgery Follow-up From 
PREVENT IV Randomized Clinical Trial,'' JAMA Surg., 2014, vol. 
149(8), pp. 798-805.
    \147\ Ibid.
    \148\ Weiss, D.R., et al., ``Extensive deendothelialization and 
thrombogenicity in routinely prepared vein grafts for coronary 
bypass operations: facts and remedy,'' Int J Clin Exp Med, 2009; 
vol. 2, pp. 95-113.
    \149\ Wilbring, M., Tugtekin, S.M., Zatschler, B., Ebner, A., 
Reichenspurner, H., Matschke, K., Deussen, A., ``Even short-time 
storage in physiological saline solution impairs endothelial 
vascular function of saphenous vein grafts,'' Eur J Cardiothorac 
Surg., 2011 Oct, vol. 40(4), pp. 811-815.
    \150\ Thatte, H.S., Biswas, K.S., Najjar, S.F., Birjiniuk, V., 
Crittenden, M.D., Michel, T., and Khuri, S.F., ``Multi-Photon 
Microscopic valuation of Saphenous Vein Endothelium and Its 
Preservation With a New Solution, GALA.'' Annals Thoracic Surgery, 
2003, vol. 75, pp. 1145-52.
---------------------------------------------------------------------------

    In order to assess clinical outcomes associated with the use of 
DuraGraft[supreg], the applicant opted to use readily available 
databases associated with two hospitals that had noncommercial access 
to the product through hospital pharmacies and, therefore, had real 
world use of DuraGraft[supreg] treatment. The two retrospective cohort 
studies, the European Retrospective Pilot Study and the USDVA Hospital 
Retrospective Study, used these data bases to evaluate the 
effectiveness and safety of the use of DuraGraft[supreg] during CABG 
surgical procedures for post-CABG clinical complications associated 
with VGF, including MI, repeat revascularization and MACE.
    The European Retrospective Pilot Study (which was a feasibility 
study) was a retrospective study conducted to assess the safety and 
efficacy of DuraGraft[supreg] treatment on both short (less than 30 
days) and long-term (greater than or equal to 30 days and up to 5 
years) clinical outcomes. This study became the basis for the design of 
a larger retrospective study conducted at the USDVA Hospital, discussed 
below. The feasibility study is unpublished.
    The European Retrospective Pilot study is a single-center clinical 
study of CABG patients to evaluate the potential benefits of 
DuraGraft[supreg] treatment as compared to a no-treatment control group 
(saline). The investigator, who prepared the analysis, remained blinded 
to individual patient data. A total of 630 patients who underwent 
elective and isolated CABG surgery with at least one saphenous vein 
graft between January 2002 and December 2008 were included. Eligibility 
criteria were: (1) Patients with first-time CABG surgery in which at 
least one vein graft was used; and (2) patients with in-situ internal 
mammary artery (IMA) graft(s) only (no saphenous vein or free arterial 
grafts). The single patient exclusion criteria were concomitant valve 
surgery and/or aortic aneurysm repair. The institutional review board 
of the University Health Alliance (UHA) approved the protocol, and 
patients gave written informed consent for their follow-up. The no-
treatment control group (saline) included 375 patients who underwent 
CABG surgery from January 2002 to May 2005, and the DuraGraft[supreg] 
treatment group included 255 patients who underwent CABG surgery from 
June 2005 to December 2008. During long-term follow-up, 5 patients were 
lost to follow-up, and 10 patients died before the 30-day follow-up. 
Therefore, a total of 247 patients from the DuraGraft[supreg] treatment 
group (97 percent) and 368 patients from the no-treatment control group 
(saline) (98 percent) were available for the long-term analysis. 
Patients undergoing CABG surgery whose vascular grafts were treated 
intra-operatively with DuraGraft[supreg] demonstrated no statistically 
significant differences in MACE within the first 30 days following CABG 
surgery. According to the applicant, these data suggest that 
DuraGraft[supreg] treatment is at least as safe as the standard-of-care 
used in CABG surgeries. Long-term outcomes between the two groups were 
not statistically different. However, also according to the applicant, 
a consistent numerical trend toward improved clinical outcomes for the 
DuraGraft[supreg] treatment group compared to the no-treatment control 
(saline) group was clearly identified. Although statistically 
insignificant, there was a consistent reduction observed in the rates 
for multiple endpoints such as all-cause death, MI, MACE, and 
revascularization. This study found reductions in DuraGraft[supreg]-
treated grafts relative to saline for revascularization (57 percent), 
MI (70 percent), MACE (37 percent), and all-cause death (23 percent) 
compared to standard-of-care (heparinized saline/blood) through 5 years 
follow-up. According to the applicant, based on the small sample size 
for this evaluation of less than 630 patients and the known frequencies 
of these events following CABG surgeries, statistical differences were 
not expected. A subsequent post-hoc analysis also was performed by the 
researchers at CHU Angers to evaluate whether any long-term clinical 
variables (such as dual antiplatelet therapy, beta-blockers, 
angiotensin receptor-blockers, statins, diabetes, lifestyle and other 
factors) had any impact on the clinical outcomes of the study. The 
conclusions of the post-hoc analyses were that the assessed long-term 
clinical variables did not impact the clinical study outcomes.
    The second study, the USDVA Hospital Retrospective Study, was an 
unpublished, independent PI initiated, single-center, multi-surgeon, 
retrospective, comparative (DuraGraft[supreg] vs. Saline) clinical 
trial, which was conducted to assess the safety and impact of 
DuraGraft[supreg] treatment on both short and long-term clinical 
outcomes in patients who underwent isolated CABG surgery with saphenous 
vein grafts (SVGs) at the Boston (West Roxbury) VA

[[Page 19310]]

Medical Center between 1996 and 2004. From 1996 through 1999, 
DuraGraft[supreg] treatment was not available and heparinized saline 
was routinely used to wet and store grafts. Fr