[Federal Register Volume 88, Number 165 (Monday, August 28, 2023)]
[Rules and Regulations]
[Pages 58640-59438]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2023-16252]
[[Page 58639]]
Vol. 88
Monday,
No. 165
August 28, 2023
Part II
Department of Health and Human Services
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Centers for Medicare & Medicaid Services
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42 CFR Parts 411, 412, 419, et al.
Medicare Program; Hospital Inpatient Prospective Payment Systems for
Acute Care Hospitals and the Long Term Care Hospital Prospective
Payment System and Policy Changes and Fiscal Year 2024 Rates; Quality
Programs and Medicare Promoting Interoperability Program Requirements
for Eligible Hospitals and Critical Access Hospitals; Rural Emergency
Hospital and Physician-Owned Hospital Requirements; and Provider and
Supplier Disclosure of Ownership; and Medicare Disproportionate Share
Hospital (DSH) Payments: Counting Certain Days Associated With Section
1115 Demonstrations in the Medicaid Fraction; Final Rule
Federal Register / Vol. 88, No. 165 / Monday, August 28, 2023 / Rules
and Regulations
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DEPARTMENT OF HEALTH AND HUMAN SERVICES
Centers for Medicare & Medicaid Services
42 CFR Parts 411, 412, 419, 488, 489, and 495
[CMS-1785-F and CMS-1788-F]
RINs 0938-AV08 and 0938-AV17
Medicare Program; Hospital Inpatient Prospective Payment Systems
for Acute Care Hospitals and the Long-Term Care Hospital Prospective
Payment System and Policy Changes and Fiscal Year 2024 Rates; Quality
Programs and Medicare Promoting Interoperability Program Requirements
for Eligible Hospitals and Critical Access Hospitals; Rural Emergency
Hospital and Physician-Owned Hospital Requirements; and Provider and
Supplier Disclosure of Ownership; and Medicare Disproportionate Share
Hospital (DSH) Payments: Counting Certain Days Associated With Section
1115 Demonstrations in the Medicaid Fraction
AGENCY: Centers for Medicare & Medicaid Services (CMS), Department of
Health and Human Services (HHS).
ACTION: Final rules.
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SUMMARY: This final rule will: revise the Medicare hospital inpatient
prospective payment systems (IPPS) for operating and capital-related
costs of acute care hospitals; make changes relating to Medicare
graduate medical education (GME) for teaching hospitals; 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); and make other policy-
related changes. This final rule also revises our regulations on the
counting of days associated with individuals eligible for certain
benefits provided by section 1115 demonstrations in the Medicaid
fraction of a hospital's disproportionate patient percentage (DPP) used
in the disproportionate share hospital (DSH) calculation.
DATES: This final rule is effective October 1, 2023. The amendments to
42 CFR 488.18(d), published at 59 FR 32120, June 22, 1994, is effective
August 1, 2023.
FOR FURTHER INFORMATION CONTACT:
Donald Thompson, and Michele Hudson, (410) 786-4487 or
[email protected], Operating Prospective Payment, MS-DRG Relative
Weights, Wage Index, Hospital Geographic Reclassifications, Graduate
Medical Education, Capital Prospective Payment, Excluded Hospitals,
Medicare Disproportionate Share Hospital (DSH) Payment Adjustment, Sole
Community Hospitals (SCHs), Medicare-Dependent Small Rural Hospital
(MDH) Program, Low-Volume Hospital Payment Adjustment, and Inpatient
Critical Access Hospital (CAH) Issues.
Emily Lipkin, and Jim Mildenberger, [email protected], Long-Term Care
Hospital Prospective Payment System and MS-LTC-DRG Relative Weights
Issues.
Adina Hersko, [email protected], New Technology Add-On Payments
and New COVID-19 Treatments Add-on Payments Issues.
Mady Hue, [email protected], and Andrea Hazeley,
[email protected], MS-DRG Classifications Issues.
Siddhartha Mazumdar, [email protected], Rural
Community Hospital Demonstration Program Issues.
Jeris Smith, [email protected], Frontier Community Health
Integration Project (FCHIP) Demonstration Issues.
Lang Le, [email protected], Hospital Readmissions Reduction
Program--Administration Issues.
Ngozi Uzokwe, [email protected], Hospital Readmissions
Reduction Program--Measures Issues.
Jennifer Tate, [email protected], Hospital-Acquired
Condition Reduction Program--Administration Issues.
Ngozi Uzokwe, [email protected], Hospital-Acquired Condition
Reduction Program--Measures Issues.
Julia Venanzi, [email protected], Hospital Inpatient
Quality Reporting Program and Hospital Value-Based Purchasing Program--
Administration Issues.
Melissa Hager, [email protected] and Ngozi Uzokwe,
[email protected]--Hospital Inpatient Quality Reporting Program
and Hospital Value-Based Purchasing Program--Measures Issues Except
Hospital Consumer Assessment of Healthcare Providers and Systems
Issues.
Elizabeth Goldstein, [email protected], Hospital
Inpatient Quality Reporting and Hospital Value-Based Purchasing--
Hospital Consumer Assessment of Healthcare Providers and Systems
Measures Issues.
Ora Dawedeit, [email protected], PPS-Exempt Cancer Hospital
Quality Reporting--Administration Issues.
Leah Domino, [email protected], PPS-Exempt Cancer Hospital
Quality Reporting Program-Measure Issues.
Ariel Cress, [email protected], Lorraine Wickiser, Lorraine,
[email protected], Long-Term Care Hospital Quality Reporting
Program--Data Reporting Issues.
Jessica Warren, [email protected] and Elizabeth Holland,
[email protected], Medicare Promoting Interoperability
Program.
Jennifer Milby, [email protected] and Sara Brice-Payne,
[email protected], Special Requirements for Rural Emergency
Hospitals (REHs).
Lisa O. Wilson, [email protected], Physician-Owned Hospital
Issues.
Frank Whelan, [email protected], Disclosure of Ownership.
SUPPLEMENTARY INFORMATION:
Tables Available on the CMS Website
The IPPS tables for this fiscal year (FY) 2024 final rule are
available on the CMS website at https://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 2024 IPPS Final Rule Home
Page'' or ``Acute Inpatient--Files for Download.'' The LTCH PPS tables
for this FY 2024 final rule are available on the CMS website at https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/LongTermCareHospitalPPS/index.html under the list item for Regulation
Number CMS-1785-F. For further details on the contents of the tables
referenced in this final rule, we refer readers to section VI. of the
Addendum to this FY 2024 IPPS/LTCH PPS final rule.
Readers who experience any problems accessing any of the tables
that are posted on the CMS websites, as previously identified, should
contact Michael Treitel, [email protected].
Table of Contents
I. Executive Summary and Background
A. Executive Summary
B. Background Summary
C. Summary of Provisions of Recent Legislation That Would Be
Implemented in This Final Rule
D. Issuance of a Notice Proposed Rulemaking and Summary of the
Proposed Provisions
E. Use of the Best Available Data in the FY 2024 IPPS and LTCH
PPS Ratesetting
F. Potential Payment Under the IPPS for Establishing and
Maintaining Access to Essential Medicines
II. Changes to Medicare Severity Diagnosis-Related Group (MS-DRG)
Classifications and Relative Weights
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A. Background
B. Adoption of the MS-DRGs and MS-DRG Reclassifications
C. Changes to Specific MS-DRG Classifications
D. Recalibration of the FY 2024 MS-DRG Relative Weights
E. Add-On Payments for New Services and Technologies for FY 2024
III. Changes to the Hospital Wage Index for Acute Care Hospitals
A. Background
B. Worksheet S-3 Wage Data for the FY 2024 Wage Index
C. Verification of Worksheet S-3 Wage Data
D. Method for Computing the FY 2024 Unadjusted Wage Index
E. Occupational Mix Adjustment to the FY 2024 Wage Index
F. Analysis and Implementation of the Occupational Mix
Adjustment and the FY 2024 Occupational Mix Adjusted Wage Index
G. Application of the Rural Floor, Application of the State
Frontier Floor, Continuation of the Low Wage Index Hospital Policy,
and Permanent Transition to Cap Wage Index Losses
H. FY 2024 Wage Index Tables
I. Revisions to the Wage Index Based on Hospital Redesignations
and Reclassifications
J. 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. Labor-Related Share for the FY 2024 Wage Index
IV. Payment Adjustment for Medicare Disproportionate Share Hospitals
(DSHs) for FY 2024 (Sec. 412.106)
A. General Discussion
B. Eligibility for Empirically Justified Medicare DSH Payments
and Uncompensated Care Payments
C. Empirically Justified Medicare DSH Payments
D. Supplemental Payment for Indian Health Service (IHS) and
Tribal Hospitals and Puerto Rico Hospitals
E. Uncompensated Care Payments
F. Counting Certain Days Associated With Section 1115
Demonstration in the Medicaid Fraction
V. Other Decisions and Changes to the IPPS for Operating System
A. Changes to MS-DRGs Subject to Postacute Care Transfer Policy
and MS-DRG Special Payments Policies (Sec. 412.4)
B. Changes in the Inpatient Hospital Update for FY 2024 (Sec.
412.64(d))
C. Sole Community Hospitals--Effective Date of Status in the
Case of a Merger (Sec. 412.92)
D. Rural Referral Centers (RRCs) Annual Updates (Sec. 412.96)
E. Payment Adjustment for Low-Volume Hospitals (Sec. 412.101)
F. Medicare-Dependent, Small Rural Hospital (MDH) Program (Sec.
412.108)
G. Payments for Indirect and Direct Graduate Medical Education
Costs (Sec. Sec. 412.105 and 413.75 through 413.83)
H. Reasonable Cost Payment for Nursing and Allied Health
Education Programs (Sec. Sec. 413.85 and 413.87)
I. Payment Adjustment for Certain Clinical Trial and Expanded
Access Use Immunotherapy Cases (Sec. Sec. 412.85 and 412.312)
J. Hospital Readmissions Reduction Program (Sec. Sec.
[thinsp]412.150 Through 412.154)
K. Hospital Value-Based Purchasing (VBP) Program: Policy Changes
(Sec. Sec. [thinsp]412.160 Through 412.167)
L. Hospital-Acquired Condition (HAC) Reduction Program
M. Rural Community Hospital Demonstration Program
VI. Changes to the IPPS for Capital-Related Costs
A. Overview
B. Additional Provisions
C. Annual Update for FY 2024
D. Treatment of Rural Reclassifications for Capital DSH Payments
VII. Changes for Hospitals Excluded From the IPPS
A. Rate-of-Increase in Payments to Excluded Hospitals for FY
2024
B. Report on Adjustment (Exception) Payments
C. Critical Access Hospitals (CAHs)
VIII. Changes to the Long-Term Care Hospital Prospective Payment
System (LTCH PPS) for FY 2024
A. Background of the LTCH PPS
B. Medicare Severity Long-Term Care Diagnosis-Related Group (MS-
LTC-DRG) Classifications and Relative Weights for FY 2024
C. Changes to the LTCH PPS Payment Rates and Other Changes to
the LTCH PPS for FY 2024
IX. Quality Data Reporting Requirements for Specific Providers and
Suppliers
A. Overview
B. Crosscutting Quality Program Proposal To Adopt the Up-to-Date
COVID-19 Vaccination Coverage Among Healthcare Personnel Measure
C. Changes to the Hospital Inpatient Quality Reporting (IQR)
Program
D. Changes to the PPS-Exempt Cancer Hospital Quality Reporting
(PCHQR) Program
E. Changes to the Long-Term Care Hospital Quality Reporting
Program (LTCH QRP)
F. Changes to the Medicare Promoting Interoperability Program
X. Other Provisions Included in This Final Rule
A. Rural Emergency Hospitals (REHs)
B. Physician Self-Referral and Physician-Owned Hospitals
C. Technical Corrections to 42 CFR 411.353 and 411.357
D. Safety Net Hospitals RFI
E. Disclosures of Ownership and Additional Disclosable Parties
Information
XI. MedPAC Recommendations and Publicly Available Files
A. MedPAC Recommendations
B. Publicly Available Files
XII. Collection of Information Requirements
A. Statutory Requirements for Solicitation of Comments
B. Collection of Information Requirements
I. Executive Summary and Background
A. Executive Summary
1. Purpose and Legal Authority
This FY 2024 IPPS/LTCH PPS final rule makes payment and policy
changes under the Medicare inpatient prospective payment system (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 makes 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 final
rule also makes policy changes to programs associated with Medicare
IPPS hospitals, IPPS-excluded hospitals, and LTCHs. In this FY 2024
final rule, we are finalizing our proposal to continue policies to
address wage index disparities impacting low wage index hospitals. We
are also finalizing our proposed changes relating to Medicare graduate
medical education (GME) for teaching hospitals and new technology add-
on payments.
In this FY 2024 final rule, we are finalizing our changes to the
regulation governing the counting of days associated with individuals
eligible for certain benefits provided by section 1115 demonstrations
in the Medicaid fraction of a hospital's DPP that were proposed in CMS
1788-P, Medicare Program; Medicare Disproportionate Share Hospital
(DSH) Payments: Counting Certain Days Associated With Section 1115
Demonstrations in the Medicaid Fraction (88 FR 12623).
We are finalizing our proposals to establish new requirements and
revise existing requirements for eligible hospitals and CAHs
participating in the Medicare Promoting Interoperability Program.
In the Hospital VBP Program, we are finalizing our proposals to add
one new measure, substantively modify two existing measures, add
technical changes to the administration of the Hospital Consumer
Assessment of Healthcare Providers and Systems (HCAHPS) Survey, change
the scoring policy to include a health equity scoring adjustment, and
modify the Total Performance Score (TPS) maximum to be 110, resulting
in a numeric score range of 0 to 110. We are also providing estimated
and newly established performance standards for the FY 2026 through FY
2029 program years for the Hospital VBP Program.
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In the HAC Reduction Program, we are finalizing our proposals to
establish a validation reconsideration process for data validation and
to add an additional targeting criterion for validation. We did not
propose any changes and are not finalizing any changes for the Hospital
Readmissions Reduction Program.
In the Hospital IQR Program, we are finalizing our proposals to add
three new measures, to modify three existing measures, and to remove
three measures. We are also finalizing our proposed changes to add
technical changes to the administration of the HCAHPS Survey and to add
an additional targeting criterion for validation.
In the PPS-Exempt Cancer Hospital Quality Reporting Program
(PCHQR), we are finalizing our proposals to add four new measures and
to modify an existing measure. We are also finalizing our proposed
changes to add technical changes to the administration of the HCAHPS
Survey and to begin public reporting of one measure.
In the LTCH QRP, we are finalizing our proposals to add two new
measures, modify an existing measure, remove two measures, and increase
the LTCH QRP data completion thresholds for LTCH Continuity Assessment
Record and Evaluation (CARE) Data Set (LCDS) items. Additionally, we
provide a summary of the comments received to our request for
information on principles for selecting and prioritizing LTCH QRP
quality measures and concepts under consideration for future years and
our update on CMS' continued efforts to close the health equity gap.
Under various statutory authorities, we either discuss continued
program implementation or make changes to the Medicare IPPS, the LTCH
PPS, other related payment methodologies and programs for FY 2024 and
subsequent fiscal years, and other policies and provisions included in
this rule. 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 Balanced Budget Refinement
Act of 1999 (BBRA) (Public Law (Pub. L.) 106-113) and section 307(b)(1)
of the Benefits Improvement and Protection Act of 2000 (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.
Section 1814(l)(4) of the Act requires downward
adjustments to the applicable percentage increase, beginning with FY
2015, for CAHs that do not successfully demonstrate meaningful use of
certified electronic health record technology (CEHRT) for an EHR
reporting payment for a payment adjustment year.
Section 1814(l)(4) of the Act, which requires downward
adjustments to the applicable percentage increase, beginning with FY
2015, for CAHs that do not successfully demonstrate meaningful use of
certified electronic health record technology (CEHRT) for an electronic
health record (EHR) reporting payment for a payment adjustment year.
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. Hospitals paid under the
IPPS with approved GME programs are paid for the indirect costs of
training residents in accordance with section 1886(d)(5)(B) of the Act.
Section 1886(d)(5)(F) of the Act provides for additional
Medicare IPPS payments to subsection (d) hospitals that serve a
significantly disproportionate number of low-income patients. These
payments are known as the Medicare disproportionate share hospital
(DSH) adjustment. Section 1886(d)(5)(F) of the Act specifies the
methods under which a hospital may qualify for the DSH payment
adjustment.
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(b)(3)(B)(ix) of the Act, which requires
downward adjustments to the applicable percentage increase, beginning
with FY 2015 (and beginning with FY 2022 for subsection (d) Puerto Rico
hospitals), for eligible hospitals that do not successfully demonstrate
meaningful use of CEHRT for an EHR reporting period for a payment
adjustment year.
Section 1866(k) of the Act, which provides for the
establishment of 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(n) of the Act, which establishes the
requirements for an eligible hospital to be treated as a meaningful EHR
user of CEHRT for an EHR reporting period for a payment year or, for
purposes of subsection (b)(3)(B)(ix) of the Act, for a fiscal year.
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 directs the Secretary to compare hospitals
with respect to the number of their Medicare-Medicaid dual-eligible
beneficiaries 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 an additional
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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 the statutory formula for Medicare
DSH payments in section 1886(d)(5)(F) of the Act (``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, in the absence of section 1886(r) of the Act; (2) 1 minus the
percent change in the percent of individuals who are uninsured; and (3)
the hospital's uncompensated care amount relative to the uncompensated
care amount of all DSH hospitals expressed as a percentage.
Section 1886(m)(5) of the Act, which requires the
Secretary to reduce by two percentage points the annual update to the
standard Federal rate for discharges for a long-term care hospital
(LTCH) during the rate year for LTCHs that do not submit data in the
form, manner, and at a time, specified by the Secretary.
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. 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 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.
Section 1861(kkk) of the Act requires the Secretary to
establish the conditions REHs must meet in order to participate in the
Medicare program and which are considered necessary to ensure the
health and safety of patients receiving services at these entities.
Section 1877(i) of the Act, as added by section 6001(a)(3)
of the Patient Protection and Affordable Care Act of 2010 (Affordable
Care Act) (Pub. L. 111-148) and amended by section 1106 of the Health
Care and Education Reconciliation Act of 2010 (HCERA) (Pub. L. 111-
152), which requires the Secretary to establish and implement a process
under which a hospital that is an ``applicable hospital'' or a ``high
Medicaid facility'' may apply for an exception from the prohibition on
expansion of facility capacity.
2. Summary of the Major Provisions
The following is a summary of the major provisions in this final
rule. In general, these major provisions are being finalized as part of
the annual update to the payment policies and payment rates, consistent
with the applicable statutory provisions. A general summary of the
changes in this final rule is presented in section I.D. of the preamble
of this final rule.
a. Modification to the Rural Wage Index Calculation Methodology
As discussed in section III.G.1. of this final rule, CMS has taken
the opportunity to revisit the case law, prior public comments, and the
relevant statutory language with regard to its policies involving the
treatment of hospitals that have reclassified as rural under section
1886(d)(8)(E) of the Act, as implemented in the regulations under 42
CFR 412.103. After doing so, CMS now agrees that the best reading of
section 1886(d)(8)(E) is that it instructs CMS to treat Sec. 412.103
hospitals the same as geographically rural hospitals. Therefore, we
believe it is proper to include these hospitals in all iterations of
the rural wage index calculation methodology included in section
1886(d) of the Act, including all hold harmless calculations in that
provision. Beginning with FY 2024, we will include hospitals with Sec.
412.103 reclassification along with geographically rural hospitals in
all rural wage index calculations and only exclude ``dual reclass''
hospitals (hospitals with simultaneous Sec. 412.103 and Medicare
Geographic Classification Review Board (MGCRB) reclassifications) in
accordance with the hold harmless provision at section
1886(d)(8)(C)(ii) of the Act.
b. Continuation of the Low Wage Index Hospital Policy
To help mitigate growing wage index disparities between high wage
and low wage hospitals, in the FY 2020 IPPS/LTCH PPS rule (84 FR 42326
through 42332), we adopted a policy to increase the wage index values
for certain hospitals with low wage index values (the low wage index
hospital policy). This policy was adopted in a budget neutral manner
through an adjustment applied to the standardized amounts for all
hospitals. We also indicated our intention 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. As
discussed in section III.G.4. of the preamble of this final rule, as we
only have 1 year of relevant data at this time that we could use to
evaluate any potential impacts of this policy, we believe it is
necessary to wait until we have useable data from additional fiscal
years before making any decision to modify or discontinue the policy.
Therefore, for FY 2024, we are finalizing our proposal to continue the
low wage index hospital policy and the related budget neutrality
adjustment.
c. DSH Payment Adjustment and Additional Payment for Uncompensated Care
Under section 1886(r) of the Act, which was added by section 3133
of the Affordable Care Act, starting in FY 2014, Medicare
disproportionate share hospitals (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 final rule, we are finalizing our proposal to update our
estimates of the three factors used to determine uncompensated care
payments for FY 2024. We are also finalizing our proposal 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 conjunction with more recently available data in the
calculation of Factor 2. Consistent with the regulation at Sec.
412.106(g)(1)(iii)(C)(11), which was
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adopted in the FY 2023 IPPS/LTCH PPS final rule, for FY 2024, we will
use the 3 most recent years of audited data on uncompensated care costs
from Worksheet S-10 of the FY 2018, FY 2019, and FY 2020 cost reports
to calculate Factor 3 in the uncompensated care payment methodology for
all eligible hospitals.
Beginning with FY 2023, we established a supplemental payment for
IHS and Tribal hospitals and hospitals located in Puerto Rico, to help
prevent undue long-term financial disruption to these hospitals due to
the decision to discontinue use of the low-income insured days proxy in
the uncompensated care payment methodology for these providers.
In this final rule we are also finalizing our proposal (88 FR
12623) on counting of days associated with individuals eligible for
certain benefits provided by section 1115 demonstrations in the
Medicaid fraction of a hospital's disproportionate patient percentage
for the purposes of determining Medicare DSH payments to subsection (d)
hospitals under section 1886(d)(5)(F) of the Act. Specifically, under
our finalized policy, for purposes of the Medicare DSH calculation in
section 1886(d)(5)(F)(vi) of the Act we will ``regard as'' ``eligible
for medical assistance under a State plan approved under title XIX''
patients who (1) receive health insurance authorized by a section 1115
demonstration or (2) buy health insurance with premium assistance
provided to them under a section 1115 demonstration, where State
expenditures to provide the health insurance or premium assistance is
matched with funds from title XIX. Furthermore, of these expansion
groups we regard as eligible for Medicaid, we include in the
disproportionate patient percentage (DPP) Medicaid fraction numerator
only the days of those patients who receive from the demonstration (1)
health insurance that covers inpatient hospital services or (2) premium
assistance that covers 100 percent of the premium cost to the patient,
which the patient uses to buy health insurance that covers inpatient
hospital services, provided in either case that the patient is not also
entitled to Medicare Part A. Finally, patients whose inpatient hospital
costs are paid for with funds from an uncompensated/undercompensated
care pool authorized by a section 1115 demonstration will not be
patients ``regarded as'' eligible for Medicaid, and the days of such
patients may not be included in the DPP Medicaid fraction numerator.
d. Hospital Readmissions Reduction Program
We did not propose any changes to the Hospital Readmissions
Reduction Program. We note that all previously finalized policies under
this program will continue to apply and refer readers to the FY 2023
IPPS/LTCH PPS final rule (87 FR 49081 through 49094) for information on
these policies.
e. 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 final rule, we are finalizing our proposal to adopt modified
versions of: (1) the Medicare Spending Per Beneficiary (MSPB) Hospital
measure beginning with the FY 2028 program year; and (2) the Hospital-
level Risk-Standardized Complication Rate (RSCR) Following Elective
Primary Total Hip Arthroplasty (THA) and/or Total Knee Arthroplasty
(TKA) measure beginning with the FY 2030 program year. In addition, we
are finalizing our proposal to adopt the Severe Sepsis and Septic
Shock: Management Bundle measure in the Safety Domain beginning with
the FY 2026 program year.
We are finalizing our proposal to make technical changes to the
form and manner of the administration of the HCAHPS Survey measure
under the Hospital VBP Program beginning with the FY 2027 program year
in alignment with the Hospital IQR Program. Additionally, we are
finalizing our proposal to adopt a health equity scoring change for
rewarding excellent care in underserved populations beginning with the
FY 2026 program year, as well as the proposal to modify the Total
Performance Score (TPS) maximum to be 110, such that the TPS numeric
score range would be 0 to 110 in order to afford even top-performing
hospitals the opportunity to receive the additional health equity bonus
points under the health equity scoring change.
f. Hospital-Acquired Condition Reduction Program
Section 1886(p) of the Act establishes the HAC Reduction Program
under which payments to applicable hospitals are adjusted to provide an
incentive to reduce hospital-acquired conditions. In this final rule,
we are finalizing our proposal to establish a validation
reconsideration process for hospitals who fail data validation
beginning with the FY 2025 program year, affecting calendar year 2022
discharges. We are also finalizing modification of the validation
targeting criteria to include hospitals granted an extraordinary
circumstances exceptions (ECEs) beginning with the FY 2027 program
year, affecting calendar year 2024 discharges.
g. Modification of the COVID-19 Vaccination Coverage Among Healthcare
Personnel (HCP) Measure in the Hospital IQR Program, PCHQR Program, and
LTCH QRP
In the FY 2024 IPPS/LTCH PPS final rule, we are finalizing our
proposal to modify the COVID-19 Vaccination Coverage among HCP measure
to replace the term ``complete vaccination course'' with the term ``up
to date'' with regard to recommended COVID-19 vaccines beginning with
the Quarter 4 (Q4) calendar year (CY) 2023 reporting period/FY 2025
payment determination for the Hospital IQR Program, and the FY 2025
program year for the LTCH QRP and the PCHQR Program.
h. 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.
In the FY 2024 IPPS/LTCH PPS final rule, we are finalizing several
changes to the Hospital IQR Program. We are finalizing the adoption of
three new measures: (1) Hospital Harm--Pressure Injury electronic
clinical quality measure (eCQM) beginning with the CY 2025 reporting
period/FY 2027 payment determination; (2) Hospital Harm--Acute Kidney
Injury eCQM beginning with the CY 2025 reporting period/FY 2027 payment
determination; and (3) Excessive Radiation eCQM beginning with the CY
2025 reporting period/FY 2027 payment determination. We are also
finalizing the modification of three current measures: (1) Hybrid
Hospital-Wide All-Cause Risk Standardized Mortality (HWM) measure
beginning with the FY 2027 payment determination; (2) Hybrid Hospital-
Wide All-Cause Readmission (HWR) measure beginning with the FY 2027
payment determination; and (3) COVID-19 Vaccination Coverage among HCP
measure beginning with the Q4 CY 2023 reporting period/FY 2025 payment
determination. We are also finalizing the removal of three current
measures: (1) Hospital-level Risk-standardized Complication Rate (RSCR)
Following Elective Primary Total Hip Arthroplasty
[[Page 58645]]
(THA) and/or Total Knee Arthroplasty (TKA) measure beginning with the
April 1, 2025-March 31, 2028 reporting period/FY 2030 payment
determination pursuant to Removal Factor 8; (2) Medicare Spending Per
Beneficiary (MSPB) Hospital measure beginning with the CY 2026
reporting period/FY 2028 payment determination pursuant to Removal
Factor 8; and (3) Elective Delivery (PC-01) measure beginning with the
CY 2024 reporting period/FY 2026 payment determination pursuant to
Removal Factor 1. We are finalizing the codification of our Measure
Removal Factors.
We are also finalizing two changes to current policies related to
data submission, reporting, and validation: (1) Technical changes to
the form and manner of the administration of the HCAHPS Survey Measure
beginning with the CY 2025 reporting period/FY 2027 payment
determination; and (2) Modification of the targeting criteria for
hospital validation for extraordinary circumstances exceptions (ECEs)
beginning with the FY 2027 payment determination.
i. PPS-Exempt Cancer Hospital Quality Reporting Program
Section 1866(k)(1) of the Act requires, for purposes of FY 2014 and
each subsequent fiscal year, that a hospital described in section
1886(d)(1)(B)(v) of the Act (a PPS-exempt cancer hospital, or a PCH)
submit data in accordance with section 1866(k)(2) of the Act with
respect to such fiscal year. There is no financial impact to PCH
Medicare payment if a PCH does not participate.
In the FY 2024 IPPS/LTCH PPS final rule, we are finalizing our
proposals to adopt four new measures for the PCHQR Program: (i) three
health equity-focused measures: the Facility Commitment to Health
Equity measure, the Screening for Social Drivers of Health measure, and
the Screen Positive Rate for Social Drivers of Health measure; and (ii)
a patient preference-focused measure, the Documentation of Goals of
Care Discussions Among Cancer Patients measure. We are also finalizing
our proposal to adopt a modified version of the COVID-19 Vaccination
Coverage among HCP measure beginning with the FY 2025 program year. We
are also finalizing our proposals to publicly report the Surgical
Treatment Complications for Localized Prostate Cancer (PCH-37) measure
beginning with data from the FY 2025 program year, and technical
changes to the form and manner of the administration of the HCAHPS
survey measure beginning with the FY 2027 program year.
j. Long-Term Care Hospital Quality Reporting Program (LTCH QRP)
We are finalizing several changes to the LTCH QRP. Specifically, we
are: (1) adopting a modified version of the COVID-19 Vaccination
Coverage among HCP measure beginning with the FY 2025 LTCH QRP; (2)
adopting the Discharge Function Score measure beginning with the FY
2025 LTCH QRP; (3) removing the Percent of LTCH Patients with an
Admission and Discharge Functional Assessment and a Care Plan That
Addresses Function measure beginning with the FY 2025 LTCH QRP; (4)
removing the Application of Percent of LTCH Patients with an Admission
and Discharge Functional Assessment and a Care Plan That Addresses
Function measure beginning with the FY 2025 LTCH QRP; (5) adopting the
COVID-19 Vaccine: Percent of Patients/Residents Who Are Up to Date
measure beginning with the FY 2026 LTCH QRP; (6) increasing the LTCH
QRP data completion thresholds for the LCDS beginning with the FY 2026
LTCH QRP; and (7) beginning public reporting of the Transfer of Health
(TOH) Information to the Patient-Post-Acute Care (PAC) and TOH
Information to the Provider-PAC measures.
k. Medicare Promoting Interoperability Program
In this final rule, we are finalizing several changes to the
Medicare Promoting Interoperability Program. Specifically, we are
finalizing our proposals to: (1) amend the definition of ``EHR
reporting period for a payment adjustment year'' at 42 CFR 495.4 for
eligible hospitals and CAHs participating in the Medicare Promoting
Interoperability Program, to define the electronic health record (EHR)
reporting period in CY 2025 as a minimum of any continuous 180-day
period within CY 2025; (2) update the definition of ``EHR reporting
period for a payment adjustment year'' at Sec. 495.4 for eligible
hospitals such that, beginning in CY 2025, those hospitals that have
not successfully demonstrated meaningful use in a prior year will not
be required to attest to meaningful use by October 1st of the year
prior to the payment adjustment year; (3) modify our requirements for
the Safety Assurance Factors for EHR Resilience (SAFER) Guides measure
beginning with the EHR reporting period in CY 2024, to require eligible
hospitals and CAHs to attest ``yes'' to having conducted an annual
self-assessment of all nine SAFER Guides at any point during the
calendar year in which the EHR reporting period occurs; (4) modify the
way we refer to the calculation considerations related to unique
patients or actions for Medicare Promoting Interoperability Program
objectives and measures for which there is no numerator and
denominator; and (5) adopt three new eCQMs beginning with the CY 2025
reporting period for eligible hospitals and CAHs to select as one of
their three self-selected eCQMs: the Hospital Harm--Pressure Injury
eCQM, the Hospital Harm--Acute Kidney Injury eCQM, and the Excessive
Radiation Dose or Inadequate Image Quality for Diagnostic Computed
Tomography (CT) in Adults (Hospital Level--Inpatient) eCQM.
l. Changes to the Severity Level Designation for Z Codes Describing
Homelessness
As discussed in section II.C. of the preamble of this final rule,
we are finalizing the proposed change the severity level designation
for social determinants of health (SDOH) diagnosis codes describing
homelessness from non-complication or comorbidity (NonCC) to
complication or comorbidity (CC) for FY 2024. Consistent with our
annual updates to account for changes in resource consumption,
treatment patterns, and the clinical characteristics of patients, CMS
is recognizing homelessness as an indicator of increased resource
utilization in the acute inpatient hospital setting.
Consistent with the Administration's goal of advancing health
equity for all, including members of historically underserved and
under-resourced communities, as described in the President's January
20, 2021 Executive Order 13985 on ``Advancing Racial Equity and Support
for Underserved Communities Through the Federal Government,'' \1\ we
also continue to be interested in receiving feedback on how we might
otherwise foster the documentation and reporting of the diagnosis codes
describing social and economic circumstances to more accurately reflect
each health care encounter and improve the reliability and validity of
the coded data including in support of efforts to advance health
equity.
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\1\ Available at 86 FR 7009 (January 25, 2021) (https://www.federalregister.gov/documents/2021/01/25/2021-01753/advancing-racial-equity-and-support-for-underserved-communities-through-the-federal-government).
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3. Summary of Costs and Benefits
The following table provides a summary of the costs, savings, and
benefits associated with the major
[[Page 58646]]
provisions described in section I.A.2. of the preamble of this final
rule.
[GRAPHIC] [TIFF OMITTED] TR28AU23.000
[[Page 58647]]
[GRAPHIC] [TIFF OMITTED] TR28AU23.001
[[Page 58648]]
B. Background Summary
1. Acute Care Hospital Inpatient Prospective Payment System (IPPS)
Section 1886(d) of 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 an 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. In general, 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. In addition, certain transformative new devices and certain
antimicrobial products may qualify under an alternative inpatient new
technology add-on payment pathway by demonstrating that, absent an add-
on payment, they 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 and, beginning in FY 2023 for IHS and Tribal hospitals and
hospitals located in Puerto Rico, the new supplemental payment.
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) 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 2024. For discharges occurring on
or after October 1, 2007, but before October 1, 2024, 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
[[Page 58649]]
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). 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, effective for LTCH's cost
reporting periods beginning in FY 2016 cost reporting period, 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.
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 (DGME)
costs for a cost reporting period is based on the hospital's number of
residents in that period and the hospital's costs per resident in a
base year. The existing regulations governing payments to the various
types of hospitals are located in 42 CFR part 413. Section
1886(d)(5)(B) of the Act provides that prospective payment hospitals
that have residents in an approved GME program receive an additional
payment for each Medicare discharge to reflect the higher patient care
costs of teaching hospitals relative to non-teaching hospitals. The
additional payment is based on the indirect medical education (IME)
adjustment factor, which is calculated using a hospital's ratio of
residents to beds and a multiplier, which is set by Congress. Section
1886(d)(5)(B)(ii)(XII) of the Act provides that, for discharges
occurring during FY 2008 and fiscal years thereafter, the IME formula
multiplier is 1.35. The regulations regarding the indirect medical
education (IME) adjustment are located at 42 CFR 412.105.
C. Summary of Provisions of Recent Legislation That Will Be Implemented
in This Final Rule
1. The Consolidated Appropriations Act, 2023 (CAA 2023; Pub. L. 117-
328)
Section 4101 of the CAA 2023 extended through FY 2024 the modified
definition of a low-volume hospital and the methodology for calculating
the payment adjustment for low-volume hospitals in effect for FYs 2019
through 2022. Specifically, under section 1886(d)(12)(C)(i) of the Act,
as amended, for FYs 2019 through 2024, a subsection (d) hospital
qualifies as a low-volume hospital if it is more than 15 road miles
from another subsection (d) hospital and has less than 3,800 total
discharges during the fiscal year. Under section 1886(d)(12)(D) of the
Act, as amended, for discharges occurring in FYs 2019 through 2024, the
Secretary determines the applicable percentage increase using a
continuous, linear sliding scale ranging from an additional 25 percent
payment adjustment for low-volume hospitals with 500 or fewer
discharges to a zero percent additional payment for low-volume
hospitals with more than 3,800 discharges in the fiscal year.
Section 4102 of the CAA 2023 amended sections 1886(d)(5)(G)(i) and
1886(d)(5)(G)(ii)(II) of the Act to provide for an extension of the MDH
program through FY 2024.
Section 4143 of the CAA 2023 amended section 1886(l)(2)(B) of the
Act to specify that for portions of cost reporting periods occurring in
each of calendar years (CYs) 2010 through 2019, the $60 million payment
limit specified in that subparagraph is not to apply to the total
amount of additional payments for nursing and allied health education
to be distributed to hospitals that, as of December 29, 2022, were
operating a school of nursing, a school of allied health, or a school
of nursing and allied health. In addition, section 4143 of the CAA 2023
provides that in addition to not applying the $60 million limit for
each of years 2010 through 2019, the Secretary shall not reduce direct
GME payments by such additional payment amounts for such nursing and
allied health education for portions of cost reporting periods
occurring in the year.
D. Issuance of the Notices of Proposed Rulemaking and Summary of the
Proposed Provisions
1. FY 2024 IPPS/LTCH PPS Proposed Rule
In the proposed rule that appeared in the Federal Register on May
1, 2023 (88 FR 26658), we set forth proposed payment and policy changes
to the Medicare IPPS for FY 2024 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 2024.
The following is a general summary of the changes that we proposed
to make.
a. Proposed Changes to MS-DRG Classifications and Recalibrations of
Relative Weights
In section II. of the preamble of the proposed rule, we included
the following:
Proposed changes to MS-DRG classifications based on our
yearly review for FY 2024.
Proposed recalibration of the MS-DRG relative weights.
A discussion of the proposed FY 2024 status of new
technologies
[[Page 58650]]
approved for add-on payments for FY 2023, a presentation of our
evaluation and analysis of the FY 2024 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)
for applications not submitted under an alternative pathway, and a
discussion of the proposed status of FY 2024 new technology applicants
under the alternative pathways for certain medical devices and certain
antimicrobial products.
Proposed modifications to the new technology add-on
payment application eligibility requirements for technologies that are
not already Food and Drug Administration (FDA) market authorized to
require such applicants to have a complete and active FDA market
authorization request at the time of new technology add-on payment
application submission, to provide documentation of FDA acceptance or
filing, and to move the deadline for FDA marketing authorization from
July 1 to May 1 of the year before the fiscal year for which the
applicant applied for new technology add-on payments, beginning with
applications for FY 2025 (as discussed in section II.E.9. of the
preamble of the proposed rule).
b. Proposed Changes to the Hospital Wage Index for Acute Care Hospitals
In section III. of the preamble of the proposed rule, we proposed
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 2024 wage index update using wage data
from cost reporting periods beginning in FY 2019.
Calculation, analysis, and implementation of the proposed
occupational mix adjustment to the wage index for acute care hospitals
for FY 2024 based on the 2019 Occupational Mix Survey.
Proposed application of the rural, imputed and frontier
State floors, and continuation of the low wage index hospital policy.
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 adjustment to the wage index for acute care
hospitals for FY 2024 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 2024 wage
index.
c. Payment Adjustment for Medicare Disproportionate Share Hospitals
(DSHs) for FY 2024
In section IV. of the preamble of the proposed rule, we discuss the
following:
Proposed calculation of Factor 1 and Factor 2 of the
uncompensated care payment methodology.
Proposed methodological approach for determining the
additional payments for uncompensated care for FY 2024, which is the
same overall approach as was for FY 2023.
d. Other Decisions and Proposed Changes to the IPPS for Operating Costs
In section V. of the preamble of the proposed rule, we discuss
proposed changes or clarifications of a number of the provisions of the
regulations in 42 CFR parts 412 and 413, including the following:
Proposed inpatient hospital update for FY 2024.
Proposed change related to the effective date of sole
community hospital (SCH) classification in cases that involve a merger.
Proposed updated national and regional case-mix values and
discharges for purposes of determining RRC status.
Proposed payment adjustment for low-volume hospitals for
FY 2024.
Discussion of statutory extension of the MDH program
through FY 2024.
Proposed to establish a validation reconsideration process
and update the data validation targeting criteria under the HAC
Reduction Program for FY 2024.
Proposed to update the MSPB Hospital and THA/TKA
Complications measures, to adopt the new Severe Sepsis and Septic
Shock: Management Bundle measure, to update the changes to the data
collection and submission requirements for the HCAHPS Survey measure,
to revise the scoring methodology to include a health equity scoring
adjustment, to modify the Total Performance Score numeric score range
to be 0-110, and to codify the measure removal factors, the revised
scoring methodology and TPS numeric score range, and the minimum
numbers of cases.
Proposed changes to the regulations for GME payments when
training occurs in REHs.
Discussion of and proposed changes relating to the
implementation of the Rural Community Hospital Demonstration Program in
FY 2024.
Proposed nursing and allied health education program
Medicare Advantage (MA) add-on rates and direct GME MA percent
reductions for CY 2022.
Proposal to implement section 4143 of the CAA 2023 which
waives the $60 million limit on annual nursing and allied health
education program MA payments.
Proposed update to the payment adjustment for certain
clinical trial and expanded access use immunotherapy cases.
e. Proposed FY 2024 Policy Governing the IPPS for Capital-Related Costs
In section VI. of the preamble of the proposed rule, we discuss the
proposed payment policy requirements for capital-related costs and
capital payments to hospitals for FY 2024. In addition, we discuss a
proposed change to how hospitals with a rural reclassification are
treated for capital DSH payments.
f. Proposed Changes to the Payment Rates for Certain Excluded
Hospitals: Rate-of-Increase Percentages
In section VII. of the preamble of the proposed rule, we discuss
the following:
Proposed changes to payments to certain excluded hospitals
for FY 2024.
Proposed continued implementation of the Frontier
Community Health Integration Project (FCHIP) Demonstration.
g. Proposed Changes to the LTCH PPS
In section VIII. of the preamble of the 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 2024.
h. Proposed Changes Relating to Quality Data Reporting for Specific
Providers and Suppliers
In section IX. of the preamble of the proposed rule, we addressed
the following:
Proposed adoption of a modified version of the COVID-19
Vaccination Coverage among Healthcare Personnel Measure in the Hospital
IQR Program, PCHQR Program, and LTCH QRP.
Proposed requirements for the Hospital Inpatient Quality
Reporting (IQR) Program.
Proposed changes to the requirements for the PPS-Exempt
Cancer Hospital Quality Reporting Program (PCHQR Program).
Proposed changes to the requirements for the Long-Term
Care Hospital Quality Reporting Program (LTCH QRP), and a request for
information on principles for selecting and prioritizing LTCH QRP
quality measures and concepts under consideration for future years. We
also provide an update on health equity.
Proposed changes to requirements pertaining to eligible
hospitals and
[[Page 58651]]
CAHs participating in the Medicare Promoting Interoperability Program.
i. Other Proposals and Comment Solicitations Included in the Proposed
Rule
Section X. of the preamble of the proposed rule included the
following:
Proposals to establish requirements for additional
information that an eligible facility would be required to submit when
applying for enrollment as an REH.
Proposed changes pertaining to the process for hospitals
requesting an exception from the prohibition against facility expansion
and program integrity restrictions on approved facility expansion.
Solicitation of comments on potential approaches to
address the challenges faced by safety-net hospitals, including an
appropriate mechanism for identifying safety-net hospitals for Medicare
policy purposes.
Proposals to apply certain definitions included in the
Disclosures of Ownership and Additional Disclosable Parties Information
for Skilled Nursing Facilities proposed rule published in the February
15, 2023 Federal Register (88 FR 9820) to all provider types that
complete the Form CMS-855-A enrollment application.
j. Other Provisions of the Proposed Rule
Section XI.A. of the preamble of the proposed rule includes our
discussion of the MedPAC Recommendations.
Section XI.B. of the preamble of the proposed rule includes a
descriptive listing of the public use files associated with the
proposed rule.
Section XII. of the preamble of the proposed rule includes the
collection of information requirements for entities based on our
proposals.
Section XIII. of the preamble of the proposed rule includes
information regarding our responses to public comments.
k. Determining Prospective Payment Operating and Capital Rates and
Rate-of-Increase Limits for Acute Care Hospitals
In sections II. and III. of the Addendum of the proposed rule, we
set forth proposed changes to the amounts and factors for determining
the proposed FY 2024 prospective payment rates for operating costs and
capital-related costs for acute care hospitals. We proposed to
establish the threshold amounts for outlier cases. In addition, in
section IV. of the Addendum of the proposed rule, we address the
proposed update factors for determining the rate-of-increase limits for
cost reporting periods beginning in FY 2024 for certain hospitals
excluded from the IPPS.
l. Determining Prospective Payment Rates for LTCHs
In section V. of the Addendum of the proposed rule, we set forth
proposed changes to the amounts and factors for determining the
proposed FY 2024 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
2024. We are proposing to establish the adjustments for the wage index,
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.
m. Impact Analysis
In appendix A of the proposed rule, we set forth an analysis of the
impact the proposed changes would have on affected acute care
hospitals, CAHs, LTCHs and other entities.
n. Recommendation of Update Factors for Operating Cost Rates of Payment
for Hospital Inpatient Services
In appendix B of the 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 2024 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.
o. 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 2023 recommendations concerning hospital inpatient
payment policies address the update factor for hospital inpatient
operating costs and capital-related costs for hospitals under the IPPS.
We address these recommendations in appendix B of the proposed rule.
For further information relating specifically to the MedPAC March 2023
report or to obtain a copy of the report, contact MedPAC at (202) 220-
3700 or visit MedPAC's website at https://www.medpac.gov.
2. Section 1115 Demonstration Disproportionate Share Hospital Proposed
Rule
In addition, in the proposed rule that appeared in the Federal
Register on February 28, 2023 (88 FR 12623), we set forth proposed
revisions to the regulations on the counting of days associated with
individuals eligible for certain benefits provided by section 1115
demonstrations in the Medicaid fraction of a hospital's
disproportionate patient percentage for the purposes of determining
Medicare DSH payments to subsection (d) hospitals under section
1886(d)(5)(F) of the Act. Specifically, we proposed for purposes of the
Medicare DSH calculation in section 1886(d)(5)(F)(vi) of the Act to
``regard as'' ``eligible for medical assistance under a State plan
approved under title XIX'' patients who (1) receive health insurance
authorized by a section 1115 demonstration or (2) buy health insurance
with premium assistance provided to them under a section 1115
demonstration, where State expenditures to provide the health insurance
or premium assistance is matched with funds from title XIX.
Furthermore, of these expansion groups we proposed to regard as
eligible for Medicaid, we proposed to include in the disproportionate
patient percentage (DPP) Medicaid fraction numerator only the days of
those patients who receive from the demonstration (1) health insurance
that covers inpatient hospital services or (2) premium assistance that
covers 100 percent of the premium cost to the patient, which the
patient uses to buy health insurance that covers inpatient hospital
services, provided in either case that the patient is not also entitled
to Medicare Part A. Finally, we proposed specifically that patients
whose inpatient hospital costs are paid for with funds from an
uncompensated/undercompensated care pool authorized by a section 1115
demonstration would not be patients ``regarded as'' eligible for
Medicaid, and the days of such patients may not be included in the DPP
Medicaid fraction numerator.
E. Use of the Best Available Data for the FY 2024 IPPS and LTCH PPS
Ratesetting
We primarily use two data sources in the IPPS and LTCH PPS
ratesetting: claims data and cost report data. The
[[Page 58652]]
claims data source is the Medicare Provider Analysis and Review
(MedPAR) file, which includes fully coded diagnostic and procedure data
for all Medicare inpatient hospital bills for discharges in a fiscal
year. The cost report data source is the Medicare hospital cost report
data files from the most recent quarterly Healthcare Cost Report
Information System (HCRIS) release. Our goal is always to use the best
available data overall for ratesetting. Ordinarily, the best available
MedPAR data is the most recent MedPAR file that contains claims from
discharges for the fiscal year that is 2 years prior to the fiscal year
that is the subject of the rulemaking. Ordinarily, the best available
cost report data is based on the cost reports beginning 3 fiscal years
prior to the fiscal year that is the subject of the rulemaking.
However, due to the impact of the COVID-19 public health emergency
(PHE) on our ordinary ratesetting data, we finalized modifications to
our usual ratesetting procedures in the FY 2022 and FY 2023 IPPS/LTCH
PPS final rules.
In the FY 2022 IPPS/LTCH PPS final rule (86 FR 44789 through
44793), we discussed that the FY 2020 MedPAR claims file and the FY
2019 HCRIS dataset (the most recently available data at the time of
rulemaking) both contained data that was significantly impacted by the
COVID-19 PHE, primarily in that the utilization of services at IPPS
hospitals and LTCHs was generally markedly different for certain types
of services in FY 2020 than would have been expected in the absence of
the PHE. We stated that the most recent vaccination and hospitalization
data from the Centers for Disease Control and Prevention (CDC)
available at the time of development of that rule supported our belief
at the time that the risk of COVID-19 in FY 2022 would be significantly
lower than the risk of COVID-19 in FY 2020 and there would be fewer
COVID-19 hospitalizations for Medicare beneficiaries in FY 2022 than
there were in FY 2020. Therefore, we finalized our proposal to use FY
2019 data for the FY 2022 ratesetting for circumstances where the FY
2020 data was significantly impacted by the COVID-19 PHE, based on the
belief that FY 2019 data from before the COVID-19 PHE would be a better
overall approximation of the FY 2022 inpatient experience at both IPPS
hospitals and LTCHs.
As discussed in the FY 2023 IPPS/LTCH PPS final rule (87 FR 48795
through 48798), we discussed that the FY 2021 MedPAR claims file and
the FY 2020 HCRIS dataset (the most recently available data at the time
of rulemaking) both contain data that was significantly impacted by the
COVID-19 PHE, primarily in that the utilization of services at IPPS
hospitals and LTCHs was again generally markedly different for certain
types of services in FY 2021 than would have been expected in the
absence of the virus that causes COVID-19. Based on review of the most
recent hospitalization data and information available from the CDC at
the time of development of that rule, we stated our belief that it was
reasonable to assume that some Medicare beneficiaries would continue to
be hospitalized with COVID-19 at IPPS hospitals and LTCHs in FY 2023.
However, we also stated our belief that it would be reasonable to
assume based on the information available at the time that there would
be fewer COVID-19 hospitalizations in FY 2023 than in FY 2021.
Accordingly, because we anticipated Medicare inpatient hospitalizations
for COVID-19 would continue in FY 2023 but at a lower level, we
finalized our proposal to use FY 2021 data for purposes of the FY 2023
IPPS and LTCH PPS ratesetting but with several modifications to our
usual ratesetting methodologies to account for the anticipated decline
in COVID-19 hospitalizations of Medicare beneficiaries at IPPS
hospitals and LTCHs as compared to FY 2021.
In the FY 2024 IPPS/LTCH PPS proposed rule (88 FR 26671), we
analyzed the FY 2022 MedPAR claims file and the FY 2021 HCRIS dataset,
which are the most recently available data for FY 2024 ratesetting. We
observed that certain shifts in inpatient utilization and costs that
occurred in FY 2020 continued to persist in FY 2022. Specifically, the
share of admissions at IPPS hospitals and LTCHs for MS-DRGs and MS-LTC-
DRGs that are associated with the treatment of COVID-19 continued to
remain at levels higher than those observed in the pre-pandemic data.
For example, in FY 2019, the share of IPPS cases grouped to MS-DRG
177 (Respiratory Infections and Inflammations with major complication
or comorbidity (MCC)) was approximately 1 percent, while in FY 2022 the
share of IPPS cases grouped to MS-DRG 177 was approximately 4 percent.
Similarly, in FY 2019, the share of LTCH PPS standard Federal payment
rate cases grouped to MS-LTC-DRG 207 (Respiratory System Diagnosis with
Ventilator Support >96 Hours) was approximately 18 percent, while in FY
2022 the share of LTCH PPS standard Federal payment rate cases grouped
to MS-LTC-DRG 207 was approximately 22 percent.
In the FY 2024 IPPS/LTCH PPS proposed rule (88 FR 26671), we also
reviewed the most recent COVID-19 related data and information released
by the CDC. We presented this CDC graph which illustrates new inpatient
hospital admissions of patients with confirmed COVID-19 from August 1,
2020 through January 20, 2023. (https://www.cdc.gov/coronavirus/2019-ncov/covid-data/covidview/01202023/images/hospitalizations.PNG?_=24630,
accessed January 20, 2023).
[[Page 58653]]
[GRAPHIC] [TIFF OMITTED] TR28AU23.002
We stated that the graph shows that in the United States, patients
continue to be hospitalized with the virus that causes COVID-19. We
also noted that the CDC has stated that new variants will continue to
emerge. Viruses constantly change through mutation and sometimes these
mutations result in a new variant of the virus. Some variants spread
more easily and quickly than other variants, which may lead to more
cases of COVID-19. Even if a variant causes less severe disease in
general, an increase in the overall number of cases could cause an
increase in hospitalizations.\2\ In the proposed rule, we concluded
that based on the information available at the time, we believe there
will continue to be COVID-19 cases treated at IPPS hospitals and LTCHs
in FY 2024, such that it is appropriate to use the FY 2022 data, as the
most recent available data, for purposes of the FY 2024 IPPS and LTCH
PPS ratesetting. We also stated that based on the information available
at the time, we do not believe there is a reasonable basis for us to
assume that there will be a meaningful difference in the number of
COVID-19 cases treated at IPPS hospitals and LTCHs in FY 2024 relative
to FY 2022 to the extent that modifications to our usual ratesetting
methodologies would be warranted.
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\2\ https://www.cdc.gov/coronavirus/2019-ncov/variants/index.html, accessed January 20, 2023.
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As such, we stated our belief that FY 2022 data, as the most recent
available data, is the best available data for approximating the
inpatient experience at IPPS hospitals and LTCHs in FY 2024. Therefore,
we proposed to use the FY 2022 MedPAR claims file and the FY 2021 HCRIS
dataset (which contains data from many cost reports ending in FY 2022
based on each hospital's cost reporting period) for purposes of the FY
2024 IPPS and LTCH PPS ratesetting. For the reasons discussed, we did
not propose any modifications to our usual ratesetting methodologies to
account for the impact of COVID-19 on the ratesetting data.
The comments we received on our proposal to use FY 2022 data for
purposes of the FY 2024 IPPS and LTCH PPS ratesetting were focused on
the specific use of FY 2022 data when determining the FY 2024 outlier
fixed-loss amounts. Therefore, we refer the reader to section II.A.4.
of the addendum to this final rule for our summary and response to
comments received on our proposal to use FY 2022 data and our usual
methodology when determining the FY 2024 outlier fixed-loss amounts for
IPPS cases. We refer the reader to section V.D.3. of the Addendum to
this final rule for our summary and response to comments received on
our proposal to use FY 2022 data and our usual methodology when
determining the FY 2024 outlier fixed-loss amounts for LTCH PPS
standard Federal payment rate cases.
For the reasons discussed in those sections, we are finalizing our
proposal to use FY 2022 data for purposes of the FY 2024 IPPS and LTCH
PPS ratesetting. (That is, the FY 2022 MedPAR claims file and the FY
2021 HCRIS dataset (which contains data from many cost reports ending
in FY 2022 based on each hospital's cost reporting period).) We also
are finalizing, with modification, our proposal to use our usual
ratesetting methodologies for purposes of the FY 2024 IPPS and LTCH PPS
ratesetting. As discussed in section V.D.3. of the addendum to this
final rule, after consideration of the comments received, we are
modifying our proposed methodology for establishing the FY 2024 outlier
fixed-loss amount for LTCH PPS standard Federal payment rate cases.
F. Potential Payment Under the IPPS for Establishing and Maintaining
Access to Essential Medicines
In the CY 2024 Medicare Hospital Outpatient Prospective Payment
System and Ambulatory Surgical Center Payment System Proposed Rule (CMS
1786-P) issued on July 13, 2023, we included a request for public
comments on potential payment under the IPPS for establishing and
maintaining access to essential medicines. As discussed in that rule,
we are seeking comment on, and may consider finalizing based on the
review of comments received, as early as for cost reporting periods
beginning on or after January 1, 2024, separate payment under IPPS, for
establishing and maintaining access to a buffer stock of essential
medicines to foster a more reliable, resilient supply of these
medicines. Public comments are being accepted through September 11,
2023.
II. 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
[[Page 58654]]
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. Adoption of the MS-DRGs and MS-DRG Reclassifications
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).
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/rate year (RY) 2010 LTCH PPS final rule
(74 FR 43764 through 43766) and the FYs 2011 through 2023 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; 83 FR 41158 through 41258; 84 FR
42058 through 42165; 85 FR 58445 through 58596; 86 FR 44795 through
44961; and 87 FR 48800 through 48891, respectively).
For discussion regarding our previously finalized policies
(including our historical adjustments to the payment rates) relating to
the effect of changes in documentation and coding that do not reflect
real changes in case mix, we refer readers to the FY 2023 IPPS/LTCH PPS
final rule (87 FR 48799 through 48800).
Comment: Several commenters requested that CMS make a positive
adjustment to restore the full amount of the documentation and coding
recoupment adjustments in the FY 2024 IPPS final rule which they
asserted is required under section (7)(B)(2) and (4) of the TMA
[Transitional Medical Assistance], Abstinence Education, and QI
[Qualifying Individuals] Programs Extension Act of 2007 (Pub. L. 110-
90). Commenters stated that the statute is explicit that CMS may not
carry forward any documentation and coding adjustments applied in
fiscal years 2010 through 2017 into IPPS rates after FY 2023.
Commenters contended that CMS, by its own admission, has restored only
2.9588 percentage points of a total 3.9 percentage point reduction. By
not fully restoring the total reductions, commenters believe that CMS
is improperly extending payment adjustments beyond the FY 2023
statutory limit. A commenter stated that, even if CMS disputes it is
required to make such an adjustment, CMS should use its special
exceptions and adjustments authority to address the shortfall.
Response: As of FY 2023, CMS completed the statutory requirements
of section 7(b)(1)(B) of Pub. L. 110-90 as amended by section 631 of
the American Taxpayer Relief Act of 2012 (ATRA, Pub. L. 112- 240),
section 404 of the Medicare Access and CHIP Reauthorization Act of 2015
(MACRA), and section 15005 of the 21st Century Cures Act (Pub. L. 114-
255). As we discussed in the FY 2022 IPPS/LTCH PPS final rule (86 FR
44794 through 44795), the FY 2021 IPPS/LTCH PPS final rule (85 FR 58444
through 58445) and in prior rules, we believe section 414 of the MACRA
and section 15005 of the 21st Century Cures Act set forth the levels of
positive adjustments for FYs 2018 through 2023. We are not convinced
that the adjustments prescribed by MACRA were predicated on a specific
adjustment level estimated or implemented by CMS in previous
rulemaking. We see no evidence that Congress enacted these adjustments
with the intent that CMS would make an additional +0.7 percentage point
adjustment in FY 2018 to compensate for the higher than expected final
ATRA adjustment made in FY 2017, nor are we persuaded that it would be
appropriate to use the Secretary's exceptions and adjustments authority
under section 1886(d)(5)(I) of the Act to adjust payments in FY 2024
restore any additional amount of the original 3.9 percentage point
reduction, given Congress' directive regarding prescriptive adjustment
levels under section 414 of the MACRA and section 15005 of the 21st
Century Cures Act. Accordingly, in the FY 2018 IPPS/LTCH PPS final rule
(82 FR 38009), we implemented the required +0.4588 percentage point
adjustment to the standardized amount for FY 2018. In the FY 2019 IPPS/
LTCH PPS final rule (FY 2019 final rule) (83 FR 41157), the FY 2020
IPPS/LTCH PPS final rule (FY 2020 final rule) (84 FR 42057), the FY
2021 IPPS/LTCH PPS final rule (FY 2021 final rule) (85 FR 58444 and
58445), the FY 2022 IPPS/LTCH PPS final rule (FY 2022 final rule) (86
FR 44794 and 44795), and the FY 2023 IPPS/LTCH PPS final rule (FY 2023
final rule) (87 FR 48800), consistent with the requirements of section
414 of the MACRA, we implemented 0.5 percentage point positive
adjustments to the standardized amount for FY 2019, FY 2020, FY 2021,
FY 2022 and FY 2023, respectively. As discussed in the FY 2023 final
rule, the finalized 0.5 percentage point positive adjustment for FY
2023 is the final adjustment prescribed by section 414 of the MACRA.
C. Changes to Specific MS-DRG Classifications
1. Discussion of Changes to Coding System and Basis for FY 2024 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 FY 2024 MS-DRG Updates
As discussed in the FY 2023 IPPS/LTCH PPS proposed rule (87 FR
28127) and final rule (87 FR 48800 through 48801), beginning with FY
2024 MS-DRG classification change requests, we changed the deadline to
request changes to the MS-DRGs to October 20 of each year to allow for
additional time for the review and consideration of any proposed
updates. We also described the new process for submitting requested
changes to the MS-DRGs via a new electronic application intake system,
Medicare Electronic Application Request Information System\TM\
(MEARIS\TM\), accessed at https://mearis.cms.gov. We stated that
beginning with FY 2024 MS-DRG classification change requests, CMS will
only accept requests submitted via MEARIS\TM\ and will no longer
consider
[[Page 58655]]
requests sent via email. Additionally, we noted that within MEARIS\TM\,
we have built in several resources to support users, including a
``Resources'' section available at https://mearis.cms.gov/public/resources with technical support available under ``Useful Links'' at
the bottom of the MEARIS\TM\ site. Questions regarding the MEARIS\TM\
system can be submitted to CMS using the form available under
``Contact'', also at the bottom of the MEARIS\TM\ site.
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 request for MS-DRG classification changes to CMS. The
aforementioned burden is subject to the Paperwork Reduction Act (PRA)
of 1995 and approved under Office of Management and Budget (OMB)
control number 0938-1431 and has an expiration date of 09/30/2025.
As noted previously, interested parties had to submit MS-DRG
classification change requests for FY 2024 by October 20, 2022. As we
have discussed in prior rulemaking, 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. Interested parties should submit any comments and
suggestions for FY 2025 by October 20, 2023 via MEARISTM at:
https://mearis.cms.gov/public/home.
As we did for the FY 2023 IPPS/LTCH PPS proposed rule, for the FY
2024 IPPS/LTCH PPS proposed rule we provided a test version of the ICD-
10 MS-DRG GROUPER Software, Version 41, so that the public can better
analyze and understand the impact of the proposals included in the
proposed rule. We noted that this test software reflected the proposed
GROUPER logic for FY 2024. Therefore, it included the new diagnosis and
procedure codes that are effective for FY 2024 as reflected in Table
6A.--New Diagnosis Codes--FY 2024 and Table 6B.--New Procedure Codes--
FY 2024 that were associated with the proposed rule and does not
include the diagnosis codes that are invalid beginning in FY 2024 as
reflected in Table 6C.--Invalid Diagnosis Codes--FY 2024 associated
with the proposed rule. We noted that at the time of the development of
the proposed rule there were no procedure codes designated as invalid
for FY 2024, and therefore, there was no Table 6D- Invalid Procedure
Codes--FY 2024 associated with the proposed rule. Those tables were not
published in the Addendum to the proposed rule, but are available 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 the proposed rule. Because the diagnosis codes
no longer valid for FY 2024 are not reflected in the test software, we
made available a supplemental file in Table 6P.1a that includes the
mapped Version 41 FY 2024 ICD-10-CM codes and the deleted Version 40.1
FY 2023 ICD-10-CM codes that should be used for testing purposes with
users' available claims data. Therefore, users had access to the test
software allowing them to build case examples that reflect the
proposals that were included in the proposed rule. In addition, users
were able to view the draft version of the ICD-10 MS-DRG Definitions
Manual, Version 41.
The test version of the ICD-10 MS-DRG GROUPER Software, Version 41,
the draft version of the ICD-10 MS-DRG Definitions Manual, Version 41,
and the supplemental mapping files in Table 6P.1a of the FY 2023 and FY
2024 ICD-10-CM diagnosis codes are available at https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/AcuteInpatientPPS/MS-DRG-Classifications-and-Software.
Following are the changes that we proposed to the MS-DRGs for FY
2024. We invited 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 the proposed rule. In some cases,
we proposed changes to the MS-DRG classifications based on our analysis
of claims data and clinical appropriateness. In other cases, we
proposed to maintain the existing MS-DRG classifications based on our
analysis of claims data and clinical appropriateness. As discussed in
the FY 2024 IPPS/LTCH PPS proposed rule, our initial MS-DRG analysis
was based on ICD-10 claims data from the September 2022 update of the
FY 2022 MedPAR file, which contains hospital bills received from
October 1, 2021, through September 30, 2022. In our discussion of the
proposed MS-DRG reclassification changes, we referred to those claims
data as the ``September 2022 update of the FY 2022 MedPAR file.''
Separately, where otherwise indicated, additional analysis was based on
ICD-10 claims data from the December 2022 update of the FY 2022 MedPAR
file, which contains hospital bills received by CMS through December
31, 2022, for discharges occurring from October 1, 2021, through
September 30, 2022. In our discussion of the proposed MS-DRG
reclassification changes, we referred to those claims data as the
``December 2022 update of the FY 2022 MedPAR file.'' Specifically, as
discussed further in the proposed rule and in this section, we used the
additional claims data available in the December 2022 update of the FY
2022 MedPAR file to assess the application of the NonCC subgroup
criteria to existing MS-DRGs with a three-way severity level split, as
well as to simulate restructuring of any proposed MS-DRGs, to assess
the case counts and other criteria for determining whether a proposed
new base MS-DRG would satisfy the criteria to create subgroups.
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 clinical
factors 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 the FY 2021 IPPS/LTCH PPS final rule (85 FR 58448), we finalized
our proposal to expand our existing criteria to create a new
complication or comorbidity (CC) or major complication or comorbidity
(MCC) subgroup within a base MS-DRG. Specifically, we finalized the
expansion of the criteria to include the NonCC subgroup for a three-way
severity level split. We stated we
[[Page 58656]]
believed that applying these criteria to the NonCC subgroup would
better reflect resource stratification as well as promote stability in
the relative weights by avoiding low volume counts for the NonCC level
MS-DRGs. We noted that in our analysis of MS-DRG classification
requests for FY 2021 that were received by November 1, 2019, as well as
any additional analyses that were conducted in connection with those
requests, we applied these criteria to each of the MCC, CC, and NonCC
subgroups. We also noted that the application of the NonCC subgroup
criteria going forward may result in modifications to certain MS-DRGs
that are currently split into three severity levels and result in MS-
DRGs that are split into two severity levels. We stated that any
proposed modifications to the MS-DRGs would be addressed in future
rulemaking consistent with our annual process and reflected in Table
5.--List of Medicare Severity Diagnosis-Related Groups (MS-DRGs),
Relative Weighting Factors, and Geometric and Arithmetic Mean Length of
Stay for the applicable fiscal year.
In the FY 2022 IPPS/LTCH PPS final rule (86 FR 44798), we finalized
a delay in applying this technical criterion to existing MS-DRGs until
FY 2023 or future rulemaking, in light of the PHE. Interested parties
recommended that a complete analysis of the MS-DRG changes to be
proposed for future rulemaking in connection with the expanded three-
way severity split criteria be conducted and made available to enable
the public an opportunity to review and consider the redistribution of
cases, the impact to the relative weights, payment rates, and hospital
case mix to allow meaningful comment prior to implementation.
In the FY 2023 IPPS/LTCH PPS final rule (87 FR 48803), we also
finalized a delay in application of the NonCC subgroup criteria to
existing MS-DRGs with a three-way severity level split in light of the
ongoing PHE and until such time additional analyses can be performed to
assess impacts, as discussed in response to public comments in the FY
2022 and FY 2023 IPPS/LTCH PPS final rules.
In our analysis of the MS-DRG classification requests for FY 2024
that we received by October 20, 2022, as well as any additional
analyses that were conducted in connection with those requests, we
applied these criteria to each of the MCC, CC, and NonCC subgroups, as
described in the following table.
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In general, once the decision has been made to propose to make
further modifications to the MS-DRGs as described previously, such as
creating a new base MS-DRG, or in our evaluation of a specific MS-DRG
classification request to split (or subdivide) an existing base MS-DRG
into severity levels, all five criteria must be met for the base MS-DRG
to be split (or subdivided) by a CC subgroup. We note that in our
analysis of requests to create a new MS-DRG, we typically evaluate the
most recent year of MedPAR claims data available. For example, we
stated earlier that for the FY 2024 IPPS/LTCH PPS proposed rule, our
initial MS-DRG analysis was generally based on ICD-10 claims data from
the September 2022 update of the FY 2022 MedPAR file, with the
additional claims data
[[Page 58657]]
available in the December 2022 update of the FY 2022 MedPAR file used
to assess the case counts and other criteria for determining whether a
proposed new base MS-DRG would satisfy the criteria to create
subgroups. However, in our evaluation of requests to split an existing
base MS-DRG into severity levels, as noted in prior rulemaking (80 FR
49368), we typically analyze the most recent two years of data. This
analysis includes 2 years of MedPAR claims data to compare the data
results from 1 year to the next to avoid making determinations about
whether additional severity levels are warranted based on an isolated
year's data fluctuation and also, to validate that the established
severity levels within a base MS-DRG are supported. The first step in
our process of evaluating if the creation of a new CC subgroup within a
base MS-DRG is warranted is to determine if all the criteria is
satisfied for a three-way split. In applying the criteria for a three-
way split, a base MS-DRG is initially subdivided into the three
subgroups: MCC, CC, and NonCC. Each subgroup is then analyzed in
relation to the other two subgroups using the volume (Criteria 1 and
2), average cost (Criteria 3 and 4), and reduction in variance
(Criteria 5). If the criteria fail, the next step is to determine if
the criteria are satisfied for a two-way split. In applying the
criteria for a two-way split, a base MS-DRG is initially subdivided
into two subgroups: ``with MCC'' and ``without MCC'' (1_23) or ``with
CC/MCC'' and ``without CC/MCC'' (12_3). Each subgroup is then analyzed
in relation to the other using the volume (Criteria 1 and 2), average
cost (Criteria 3 and 4), and reduction in variance (Criteria 5). If the
criteria for both of the two-way splits fail, then a split (or CC
subgroup) would generally not be warranted for that base MS-DRG. If the
three-way split fails on any one of the five criteria and all five
criteria for both two-way splits (1_23 and 12_3) are met, we would
apply the two-way split with the highest R2 value. We note that if the
request to split (or subdivide) an existing base MS-DRG into severity
levels specifies the request is for either one of the two-way splits
(1_23 or 12_3), in response to the specific request, we will evaluate
the criteria for both of the two-way splits, however we do not also
evaluate the criteria for a three-way split.
As previously noted, to validate whether the established severity
levels within a base MS-DRG are supported, we typically analyze the
most recent two years of MedPAR claims data. For the FY 2024 IPPS/LTCH
PPS proposed rule, using the December 2022 update of the FY 2022 MedPAR
file and the March 2022 update of the FY 2021 MedPAR file, we also
analyzed how applying the NonCC subgroup criteria to all MS-DRGs
currently split into three severity levels would potentially affect the
MS-DRG structure in connection with the proposed FY 2024 MS-DRG
classification changes. While, as previously noted, our MS-DRG analysis
for the FY 2024 IPPS/LTCH PPS proposed rule was otherwise based on ICD-
10 claims data from the September 2022 update of the FY 2022 MedPAR
file, we utilized the additional claims data available from the
December 2022 update of the FY 2022 MedPAR file for purposes of
assessing the application of the NonCC subgroup criteria to these
existing MS-DRGs as well as to determine whether a proposed new base
MS-DRG satisfies the criteria to create subgroups. In the FY 2024 IPPS/
LTCH PPS proposed rule, we noted that findings from our analysis
indicated that approximately 45 base MS-DRGs would be subject to change
based on the three-way severity level split criterion finalized in FY
2021. Specifically, we found that applying the NonCC subgroup criteria
to all MS-DRGs currently split into three severity levels would result
in the potential deletion of 135 MS-DRGs (45 MS-DRGs x 3 severity
levels =135) and the potential creation of 86 new MS-DRGs. We referred
the reader to Table 6P.10--Potential MS-DRG Changes with Application of
the NonCC Subgroup Criteria and Detailed Data Analysis- FY 2024
associated with the proposed rule and available on the CMS website at:
https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/AcuteInpatientPPS for detailed information, including the criteria to
create subgroups in Table 6P.10a (as also set forth in the preceding
table) and the list of the 135 MS-DRGs that would potentially be
subject to deletion and the list of the 86 MS-DRGs that would
potentially be created in Table 6P.10b. We noted that we also
identified an additional 12 obstetric MS-DRGs (4 base MS-DRGs x 3
severity levels=12) that would be subject to change based on the
application of the three-way severity level split criterion, as
reflected in our data analysis in Table 6P.10c associated with the
proposed rule. However, in response to prior public comments expressing
concern about the historical low volume of the obstetric related MS-
DRGs being subject to application of the NonCC subgroup criteria and
consistent with our discussion in prior rulemaking regarding this
population in our Medicare claims data and the development of these MS-
DRGs (83 FR 41210), we stated we believed it may be appropriate to
exclude these MS-DRGs from application of the NonCC subgroup criteria.
The list of 12 obstetric MS-DRGs is shown in the following table.
[GRAPHIC] [TIFF OMITTED] TR28AU23.004
[[Page 58658]]
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We also referred the reader to Table 6P.10d for the data analysis
of all 49 base MS-DRGs that would be subject to change based on the
application of the three-way severity level split criterion and to
Table 6P.10e for the corresponding data dictionary that describes the
meaning of the data elements and assists with interpretation of the
data related to our analysis with application of the NonCC subgroup
criteria. We noted, in our analysis of the claims data and as reflected
in Table 6P.10d, we identified four base MS-DRGs currently subdivided
with a three-way severity level split (4 base MS-DRGs x 3 severity
levels=12 MS-DRGs) that result in the potential creation of a single,
base MS-DRG when grouped under the proposed V41 GROUPER software with
application of the NonCC subgroup criteria. As shown in Table 6P.10d,
the four current base MS-DRGs (excluding the 4 obstetric related base
DRGs) are base MS-DRGs 283, 296, 411, and 799. In addition to not
satisfying the criterion that there be at least 500 cases in the NonCC
subgroup for a three-way severity level split, these four base MS-DRGs
also failed one or more of the other criteria to create subgroups. For
example, our review of base MS-DRGs 283 and 296 showed they failed the
criterion that there be at least 5% or more of the patient cases in the
NonCC subgroup. For base MS-DRG 411, we found the criterion that there
be at least 500 cases in each subgroup for a three-way severity level
split, as well as in each subgroup for both of the two-way severity
level splits, was not met. Lastly, for base MS-DRG 799, we found less
than 500 cases in at least two of three subgroups for a three-way
severity level split, as well as for at least one of the two subgroups
for a two-way severity level split, and the R2 value was less than 3.0
for the two-way severity level split.
We also referred the reader to Table 6P.10f for the alternate cost
weight analysis with application of the NonCC subgroup criteria that
includes transfer-adjusted cases from the December 2022 update of the
FY 2022 MedPAR file under the proposed V41 ICD-10 MS-DRG GROUPER
Software, the MS-DRG relative weights calculated under the proposed V41
ICD-10 MS-DRG GROUPER Software, the alternate MS-DRG relative weights
calculated with application of the NonCC subgroup criteria using an
alternate version of the ICD-10 MS-DRG GROUPER Software, Version 41.A
(discussed in more detail in this section of the proposed rule), and
the change in MS-DRG relative weights between those calculated under
the proposed V41 GROUPER Software and those calculated under the
alternate V41.A GROUPER Software. We noted that to facilitate the
structural comparison between the proposed V41 GROUPER and the
alternate V41.A GROUPER, the relative weights calculated using the
proposed V41 GROUPER Software (column F) did not reflect application of
the 10-percent cap. We further noted that changes in the status for
transfer adjusted cases were reflected for the relative weights
calculated using the proposed V41 GROUPER Software only and were not
reflected for the alternate MS-DRG weights with application of the
NonCC subgroup criteria. We noted, as shown in Table 6P.10f, that we
found five MS-DRGs for which there appears to be a greater than
negative 10% change between the relative weight calculated under the
proposed V41 GROUPER Software and the calculated alternate relative
weight under the V41.A GROUPER Software with application of the NonCC
subgroup criteria. As shown in Table 6P.10f, the five MS-DRGs are
existing MS-DRG 021 (potential new MS-DRG 105), existing MS-DRG 411
(potential new MS-DRG 426), existing MS-DRG 573 (potential new MS-DRG
529), existing MS-DRG 574 (potential new MS-DRG 530), and existing MS-
DRG 799 (potential new MS-DRG 649). Of the five existing MS-DRGs, two
of the MS-DRGs are those for which a new single, base MS-DRG would
potentially be created from the current three-way split, as previously
described: MS-DRG 411 (potential new MS-DRG 426) and MS-DRG 799
(potential new MS-DRG 649). In the proposed rule, we stated that the
findings were consistent with what we would expect given the low volume
of cases in the NonCC subgroups compared to the volume of cases in the
CC subgroups for these MS-DRGs.
As noted in prior rulemaking, any potential MS-DRG updates to be
considered for a future proposal in connection with application of the
NonCC subgroup criteria would also involve a redistribution of cases,
which would impact the relative weights, and, thus, the payment rates
proposed for particular types of cases. As such, and in response to
prior public comments requesting that further analysis of the
application of the NonCC subgroup criteria be made available, in
addition to Table 6P.10f, we made available additional files reflecting
application of the NonCC subgroup criteria in connection with the
proposed FY 2024 MS-DRG changes, using the December 2022 update of the
FY 2022 MedPAR file. These additional files included an alternate Table
5--Alternate List of Medicare Severity Diagnosis Related Groups (MS-
DRGs), Relative Weighting Factors, and Geometric and Arithmetic Mean
Length of Stay, an alternate Length of Stay (LOS) Statistics file, an
alternate Case Mix Index (CMI) file, and an alternate After Outliers
Removed and Before Outliers Removed (AOR_BOR) file. The files are
available in association with the proposed rule on the CMS website at:
https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/AcuteInpatientPPS.
For the FY 2024 IPPS/LTCH PPS proposed rule we also provided an
alternate test version of the ICD-10 MS-DRG GROUPER Software, Version
41.A, so that the public can better analyze and understand the impact
on the proposals included in the proposed rule if the NonCC subgroup
criteria were to be applied to existing MS-DRGs with a three-way
severity level split. We noted that this alternate test software
reflected the proposed GROUPER logic for FY 2024 as modified by the
application of the NonCC subgroup criteria. Therefore, it included the
new diagnosis and procedure codes that are effective for FY 2024 as
reflected in Table 6A.--New Diagnosis Codes--FY 2024 and Table 6B.--New
Procedure Codes--FY 2024 associated with the proposed rule and did not
include the diagnosis codes that are invalid beginning in FY 2024 as
reflected in Table 6C.--Invalid Diagnosis Codes--FY 2024 associated
with the proposed rule. As previously noted, at the time of the
development of the proposed rule there were no procedure codes
designated as invalid for FY 2024, and therefore, there was no Table
6D- Invalid Procedure Codes--FY 2024 associated with the proposed rule.
These tables were not published in the Addendum to the proposed rule,
but are available 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 the proposed rule. Because
the diagnosis codes no longer valid for FY 2024 are not reflected in
the alternate test software, we made available a supplemental file in
Table 6P.1a that includes the mapped Version 41 FY 2024 ICD-10-CM codes
and the deleted Version 40.1 FY 2023 ICD-10-CM codes that should be
used for testing purposes with users' available claims data. Therefore,
users had access to the alternate test software allowing them to build
case examples that reflect the proposals included in the proposed rule
[[Page 58659]]
with application of the NonCC subgroup criteria. Because the potential
MS-DRG changes with application of the NonCC subgroup criteria are
available in Table 6P.10b associated with the proposed rule, an
alternate version of the ICD-10 MS-DRG Definitions Manual was not
developed.
The alternate test version of the ICD-10 MS-DRG GROUPER Software,
Version 41.A, and the supplemental mapping files in Table 6P.1a of the
FY 2023 and FY 2024 ICD-10-CM diagnosis codes are available at https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/AcuteInpatientPPS/MS-DRG-Classifications-and-Software.
After delaying the application of the NonCC subgroup criteria for
two years, and in response to prior public comments, we made available
these additional analyses reflecting application of the criteria in
connection with the proposed FY 2024 MS-DRG changes for public review
and comment, to inform application of the NonCC subgroup criteria for
FY 2025 rulemaking.
We proposed to continue to delay application of the NonCC subgroup
criteria to existing MS-DRGs with a three-way severity level split for
FY 2024. We stated that we were interested in hearing feedback
regarding the experience of large urban hospitals, rural hospitals, and
other hospital types and will take commenters' feedback into
consideration for our development of the FY 2025 proposed rule.
Comment: Commenters expressed appreciation that CMS provided
additional files for review and consideration that reflect application
of the NonCC subgroup criteria in connection with the FY 2024 proposed
MS-DRG changes.
Response: We thank the commenters for their feedback.
Comment: Commenters supported the proposal to delay application of
the NonCC subgroup criteria to existing MS-DRGs with a three-way
severity level split for FY 2024 and to maintain the current structure
of the 45 MS-DRGs that currently have a three-way split (total of 135
MS-DRGs). The commenters also expressed support for the proposal to
exclude the 12 obstetric related MS-DRGs from application of the NonCC
subgroup criteria in the future. Some commenters stated they agreed
with the methodology for creating subgroups and viewed the
consolidation as a positive change, however, the commenters also
recommended that CMS continue to collect data and identify any
unintended impacts to the MS-DRG relative weights because of the
redistribution of cases from application of the NonCC subgroup
criteria. Other commenters stated that although the COVID-19 PHE has
ended, several hospitals are still recovering and further assessment of
the impacts for low volume procedures in connection with the potential
MS-DRG changes with application of the NonCC subgroup criteria is
needed.
A couple commenters specifically requested that CMS provide data
analysis by hospital type for FY 2025 rulemaking to afford
organizations additional time to review and forecast impacts, as well
as to facilitate more informed comments in response to the CMS request
for comments related to experiences of large urban hospitals, rural
hospitals, and other hospital types.
Response: We appreciate the commenters' support. We will continue
to review and consider the feedback we have received for our
development of the FY 2025 proposed rule.
Comment: A couple commenters who expressed support for the proposed
delay in application of the NonCC subgroup criteria for FY 2024 and
appreciation for the additional analysis files that were made available
stated that deleting and adding a large volume of MS-DRGs may create
additional administrative burden. The commenters stated providers will
need more time than is typically provided for implementation of
finalized policies under the IPPS. The commenters urged CMS to work
with interested parties in developing an appropriate implementation
timeline. A commenter suggested that CMS consider implementing
application of the NonCC subgroup criteria using a phased approach,
over several years, to assist in the transition. This commenter
encouraged CMS to continue to provide additional analysis files as was
done with the proposed rule and to include the potential effects of a
multi-year implementation plan.
Response: We thank the commenters for their support and feedback.
We will continue to review and consider the feedback we have received
for our development of the FY 2025 proposed rule.
Comment: A commenter who agreed it is appropriate to defer
implementation of MS-DRG consolidation based on the three-way severity
criteria specifically expressed concern that the policy may result in
additional reductions to relative weights for important procedures,
including intracranial vascular procedures. According to the commenter,
intracranial vascular procedures have already experienced significant
cuts in recent years. The commenter stated that based on the data that
was made available in connection with the proposed rule, the estimates
show that consolidation for five MS-DRGs, including potential new MS-
DRG 105 (Intracranial Vascular Procedures with Principal Diagnosis
Hemorrhage without MCC) would result in a more than 10 percent relative
weight reduction (prior to the application of the current 10-percent
cap). To the extent that CMS does adopt such MS-DRG consolidation in
the future, the commenter recommended that CMS limit the single-year
relative weight reductions resulting from cumulative policy changes to
5 percent.
The commenter also suggested that CMS consider building more
flexibility into its assessment of severity level subdivisions for both
new and existing MS-DRGs. According to the commenter, the requirement
to meet multiple, rigid cost and volume cut-offs may detract from the
assessment of important clinical and resource distinctions in patient
populations within the MS-DRGs.
A few commenters expressed concern that the criterion of a 500-case
volume may be too high, particularly for low volume services and MS-
DRGs. The commenters stated that there has been tremendous growth in
Medicare Advantage claims with a decrease in fee-for-service (FFS)
claims flowing into rate-setting. The commenters stated additional
analysis of this criterion is warranted and requested that CMS provide
further information about the benefits.
Response: We appreciate the commenters' feedback. We acknowledge
the growth in Medicare Advantage claims and will continue to review and
consider the feedback we have received for our development of the FY
2025 proposed rule.
In response to the commenter's recommendation that CMS limit the
single-year relative weight reductions to 5 percent, we note that there
was extensive discussion in the FY 2023 IPPS/LTCH PPS final rule (87 FR
48897 through 48900) regarding the cap for relative weight reductions
and refer the reader to that discussion for detailed information. We
also refer the reader to the additional discussion in the FY 2024 IPPS/
LTCH PPS proposed rule (88 FR 26774 through 26775) and in section
II.D.2.c. of the preamble of this final rule.
With regard to the commenter's suggestion that more flexibility
should be built into CMS' assessment of severity level subdivisions for
both new
[[Page 58660]]
and existing MS-DRGs, we note that currently, the minimum case volume
requirements were established to avoid overly fragmenting the MS-DRG
classification system. With smaller volumes they will be subject to
stochastic (unpredictable) effects that may indicate a cost difference
within the data sample. Reevaluation in subsequent years may result in
those cost differences being insufficient to support the split.
We do not believe it is in the interest of the Medicare program or
providers to establish and then remove MS-DRG splits. We believe that
stability of MS-DRG payment is an important objective and therefore,
that a volume requirement is a necessary adjunct to cost
differentiation. We established a 500-case limit to meet this stability
requirement. With this case limit, an MS-DRG split not meeting this
minimum volume threshold will have fewer than 0.007% cases from which
the MS-DRG RW is constructed. Under application of the NonCC subgroup
criteria, hospitals would receive a payment weight that averages the
two comorbidity split levels (CC and NonCC) and will thus only
experience any potential negative impact to the extent that their case
mix is comprised of cases with the (potentially) higher weight. We
note, as discussed in prior rulemaking (86 FR 44878), the MS-DRG system
is a system of averages and it is expected that within the diagnostic
related groups, some cases may demonstrate higher than average costs,
while other cases may demonstrate lower than average costs. We also
provide outlier payments to mitigate extreme loss on individual cases.
Comment: A couple commenters requested clarification on how the
policy to cap the reductions for MS-DRG relative weights to 10-percent
would apply as CMS considers implementation of the NonCC subgroup
criteria.
Response: As stated in the FY 2023 IPPS/LTCH PPS final rule (87 FR
48900), the 10- percent cap on reductions to an MS-DRG's relative
weight applies to new or modified MS-DRGs after the first fiscal year
that the new or modified MS-DRGs take effect. Therefore, the 10-percent
cap would not apply to the relative weight for any new or renumbered
MS-DRGs for the first fiscal year. However, we recognize that
application of the NonCC subgroup criteria may warrant special
consideration with respect to the 10-percent cap on reductions to an
MS-DRG's relative weight and will continue to consider this issue in
connection with our efforts to promote predictability and mitigate
financial impacts resulting from significant fluctuations in the
relative weights.
Comment: A couple commenters expressed concern that the additional
files made available in connection with the proposed rule did not
demonstrate how the explanatory power of the potential new MS-DRGs with
application of the NonCC subgroup criteria is an improvement over the
current MS-DRGs. The commenters expressed concern that the impact of
the presence of a CC for MS-DRG assignment appears to be declining
because the application of the NonCC subgroup criteria is resulting in
fewer MS-DRGs split by the presence of a CC. Specifically, the
commenters stated that when the NonCC subgroup criteria were applied to
existing MS-DRGs currently split into three severity levels, as well as
when the criteria were applied to proposed new MS-DRG classification
requests, none of the proposed new MS-DRGs with a two-way severity
level split involved a ``with CC/MCC'' and ``without CC/MCC'' split.
Response: As discussed in the FY 2024 IPPS/LTCH proposed rule, we
provided both a test version of the ICD-10 MS-DRG GROUPER Software,
Version 41 and an alternate version of the ICD-10 MS-DRG GROUPER
Software, Version 41.A so that the public could better analyze and
understand the impact on the proposals included in the proposed rule if
the NonCC subgroup criteria were to be applied to existing MS-DRGs with
a three-way severity level split. We noted that this alternate test
software reflected the proposed GROUPER logic for FY 2024 as modified
by the application of the NonCC subgroup criteria. Overall, we believe
the explanatory power (R2) for the V41.A alternate GROUPER yields
similar results to the proposed V41 GROUPER. Based on our review, the
explanatory power (R2) goes down by 0.04 percent with the V41.A
alternate GROUPER, explaining less variation when compared to the V41
notice of proposed rulemaking (NPRM) GROUPER, however this result is as
we would expect since the MS-DRGs subject to the NonCC subgroup
criteria considered for potential adjustment are low volume to begin
with.
[GRAPHIC] [TIFF OMITTED] TR28AU23.005
In response to the concerns expressed that application of the NonCC
subgroup criteria to existing MS-DRGs with a three-way severity level
split appears to result in fewer MS-DRGs split by the presence of a CC,
we note that the criteria for the two-way split of ``with CC/MCC'' and
``without CC/MCC'' requires that there be at least 500 cases in the
NonCC group, and as discussed in the proposed rule, in applying the
criteria for proposed new MS-DRGs, that volume requirement was not met.
Alternatively, the criteria for the two-way split of ``with MCC'' and
``without MCC'' was met for specific proposals, and therefore,
proposed.
We recognize and acknowledge the concerns raised by the commenters
regarding the impact the application of the NonCC subgroup criteria to
existing MS-DRGs with a three-way split appears to have on the presence
of a CC for MS-DRG assignment. We will continue to examine this issue
with respect to the criteria and how it also relates to the
comprehensive CC/MCC analysis. We refer the reader to section
II.C.12.b. of the preamble of this final rule for additional discussion
related to the comprehensive CC/MCC analysis.
Comment: Some commenters requested additional insight and rationale
as to why CMS applied the NonCC subgroup criteria to the proposed MS-
DRG changes for FY 2024 if the intent is to delay application of the
NonCC subgroup criteria until future rulemaking.
Response: As discussed in prior rulemaking, in general, once the
decision has been made to propose to make further modifications to the
MS-DRGs, such as creating a new base MS-DRG, all five criteria must be
met for the base MS-DRG to be split (or subdivided) by a CC subgroup.
We note that we have applied the criteria to create subgroups,
including application of the NonCC subgroup criteria, in our annual
analysis of the MS-DRG classification requests
[[Page 58661]]
effective FY 2021 (85 FR 58446 through 58448). For example, we applied
the criteria to create subgroups, including application of the NonCC
subgroup criteria, for a proposed new base MS-DRG as discussed in our
finalization of new base MS-DRG 018 (Chimeric Antigen Receptor (CAR) T-
cell Immunotherapy), new base MS-DRG 019 (Simultaneous Pancreas and
Kidney Transplant with Hemodialysis), new base MS-DRG 140 (Major Head
and Neck Procedures), new base MS-DRG 143 (Other Ear, Nose, Mouth and
Throat O.R. Procedures), new base MS-DRG 521 (Hip Replacement with
Principal Diagnosis of Hip Fracture) and new base MS-DRG 650 (Kidney
Transplant with Hemodialysis) for FY 2021. In the FY 2021 IPPS/LTCH PPS
final rule (85 FR 58448), we finalized our proposal to expand our
existing criteria to create a new CC or MCC subgroup within a base MS-
DRG. Specifically, we finalized the expansion of the criteria to
include the NonCC subgroup for a three-way severity level split.
Similarly, we applied the criteria to create subgroups including
application of the NonCC subgroup criteria for MS-DRG classification
requests for FY 2022 that we received by November 1, 2020 (86 FR 44796
through 44798), for MS-DRG classification requests for FY 2023 that we
received by November 1, 2021 (87 FR 48801 through 48804), and for MS-
DRG classification requests for FY 2024 that we received by October 20,
2022 (88 FR 26673 through 26676), as well as any additional analyses
that were conducted in connection with those requests.
In the FY 2022 IPPS/LTCH PPS final rule (86 FR 44798) and FY 2023
IPPS/LTCH PPS final rule (87 FR 48803), we finalized a delay in
applying this technical criterion to existing MS-DRGs in light of the
PHE. We take this opportunity to clarify that the delay referenced was
in applying this technical criterion to existing MS-DRGs with a three-
way severity level split. Therefore, while we have made analyses for
potential MS-DRG changes with application of the NonCC subgroup
criteria publicly available, we have not yet proposed application of
the NonCC subgroup criteria to existing MS-DRGs with a three-way
severity level split. We note that we will continue to apply the
criteria to create subgroups, including application of the NonCC
subgroup criteria, in our annual analysis of MS-DRG classification
requests, consistent with our approach since FY 2021 when we finalized
the expansion of the criteria to include the NonCC subgroup for a
three-way severity level split.
Comment: A few commenters expressed concerns about the fluctuations
in potential MS-DRG restructuring with application of the NonCC
subgroup criteria from FY 2021 through FY 2024 based on different sets
of claims data.
Response: We note that we addressed similar comments in detail in
the FY 2023 IPPS/LTCH PPS final rule (87 FR 48803 through 48804) and
refer the reader to that discussion.
After consideration of the public comments we received, and for the
reasons discussed, we are finalizing our proposal to delay the
application of the NonCC subgroup criteria to existing MS-DRGs with a
three-way severity level split until FY 2025 or later, and are
finalizing for FY 2024 our proposal to maintain the current structure
of the 45 MS-DRGs that currently have a three-way severity level split.
We are making the FY 2024 ICD-10 MS-DRG GROUPER and Medicare Code
Editor (MCE) Software Version 41, the ICD-10 MS-DRG Definitions Manual
files Version 41 and the Definitions of Medicare Code Edits Manual
Version 41 available to the public on our CMS website at: https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/AcuteInpatientPPS/MS-DRG-Classifications-and-Software.
2. Major Diagnostic Category (MDC) 01: (Diseases and Disorders of the
Nervous System): Epilepsy With Neurostimulator
The Responsive Neurostimulator (RNS[supreg]) System is a cranially
implanted neurostimulator and is a treatment option for persons
diagnosed with medically intractable epilepsy, a brain disorder
characterized by persistent seizure activity which despite maximal
medical treatment, remains sufficiently debilitating. In the FY 2024
IPPS/LTCH PPS proposed rule (88 FR 26676 through 26681), we stated that
cases involving the use of the RNS[supreg] System are identified by the
reporting of an ICD-10-PCS code combination capturing a neurostimulator
generator inserted into the skull with the insertion of a
neurostimulator lead into the brain and the cases are assigned to MS-
DRG 023 (Craniotomy with Major Device Implant or Acute Complex CNS
Principal Diagnosis with MCC or Chemotherapy Implant or Epilepsy with
Neurostimulator) when reported with a principal diagnosis of epilepsy.
We referred the reader to the ICD-10 MS-DRG Definitions Manual Version
40.1, which is available on the CMS website at: https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/AcuteInpatientPPS/MS-DRG-Classifications-and-Software for complete documentation of the GROUPER
logic for MS-DRG 023.
As discussed in the FY 2018 IPPS/LTCH PPS final rule (82 FR 38015
through 38019), we finalized our proposal to reassign all cases with a
principal diagnosis of epilepsy and one of the following ICD-10-PCS
code combinations capturing cases with a neurostimulator generator
inserted into the skull with the insertion of a neurostimulator lead
into the brain (including cases involving the use of the RNS[supreg]
neurostimulator) to MS-DRG 023 even if there is no MCC reported:
0NH00NZ (Insertion of neurostimulator generator into
skull, open approach), in combination with 00H00MZ (Insertion of
neurostimulator lead into brain, open approach);
0NH00NZ (Insertion of neurostimulator generator into
skull, open approach), in combination with 00H03MZ (Insertion of
neurostimulator lead into brain, percutaneous approach); and
0NH00NZ (Insertion of neurostimulator generator into
skull, open approach), in combination with 00H04MZ (Insertion of
neurostimulator lead into brain, percutaneous endoscopic approach).
We also finalized our proposed change to the title of MS-DRG 023
from ``Craniotomy with Major Device Implant or Acute Complex Central
Nervous System (CNS) Principal Diagnosis (PDX) with MCC or Chemo
Implant'' to ``Craniotomy with Major Device Implant or Acute Complex
Central Nervous System (CNS) Principal Diagnosis (PDX) with MCC or
Chemotherapy Implant or Epilepsy with Neurostimulator'' to reflect the
modifications to the MS-DRG structure.
In the FY 2021 IPPS/LTCH PPS final rule (85 FR 58459 through
58462), we discussed a request to reassign cases describing the
insertion of a neurostimulator generator into the skull in combination
with the insertion of a neurostimulator lead into the brain from MS-DRG
023 to MS-DRG 021 (Intracranial Vascular Procedures with Principal
Diagnosis Hemorrhage with CC) or to reassign these cases to another MS-
DRG for more appropriate payment. We stated that while the results of
our claims analysis indicated that the average costs of cases reporting
a neurostimulator generator inserted into the skull with the insertion
of a neurostimulator lead into the brain (including cases involving the
use of the RNS[supreg] neurostimulator), and a principal diagnosis of
epilepsy are higher compared to the average costs for all cases in
their assigned MS-DRG, we could not ascertain from the claims data
[[Page 58662]]
the resource use specifically attributable to the procedure during a
hospital stay. We stated that we believed that further analysis of
cases reporting a neurostimulator generator inserted into the skull
with the insertion of a neurostimulator lead into the brain (including
cases involving the use of the RNS[supreg] neurostimulator), and a
principal diagnosis of epilepsy was needed prior to proposing any
further reassignment of these cases to ensure clinical coherence
between these cases and the other cases with which they may potentially
be grouped and therefore did not propose to reassign cases describing a
neurostimulator generator inserted into the skull with the insertion of
a neurostimulator lead into the brain (including cases involving the
use of the RNS[supreg] neurostimulator) from MS-DRG 023 to MS-DRG 021.
We also did not propose to reassign Responsive Neurostimulator
(RNS[supreg]) System cases to another MS-DRG. We stated we expected
that, in future years, we would have additional data that could be used
to evaluate the potential reassignment of cases reporting a
neurostimulator generator inserted into the skull with the insertion of
a neurostimulator lead into the brain (including cases involving the
use of the RNS[supreg] neurostimulator), and a principal diagnosis of
epilepsy.
In the FY 2024 IPPS/LTCH PPS proposed rule, we stated we received a
similar request to reassign cases describing the insertion of a
neurostimulator generator into the skull in combination with the
insertion of a neurostimulator lead into the brain from MS-DRG 023 to
MS-DRG 021 or reassign all cases currently assigned to MS-DRG 023 that
involve a craniectomy or a craniotomy with the insertion of device
implant and create a new MS-DRG for these cases. The requestor
acknowledged both the refinements made to MS-DRG 023 effective for FY
2018 and the discussion in FY 2021 rulemaking, but stated that cases
describing the insertion of a neurostimulator generator into the skull
in combination with the insertion of a neurostimulator lead into the
brain (including cases involving the use of the RNS[supreg]
neurostimulator) are negatively impacted from a payment perspective in
their current MS-DRG assignment due to the large number of cases, with
a wide range of principal diagnoses, procedures, and procedure
approaches, also assigned to MS-DRG 023 and MS-DRG 024 (Craniotomy with
Major Device Implant or Acute Complex CNS Principal Diagnosis without
MCC) and therefore continue to be underpaid. We stated in the FY 2024
IPPS/LTCH PPS proposed rule that the requestor performed its own
analysis of Medicare claims data and stated that it found that the
average costs of cases describing the insertion of the RNS[supreg]
neurostimulator were significantly higher than the average costs of all
cases in their current assignment to MS-DRG 023, and as a result, cases
describing the insertion of the RNS[supreg] neurostimulator are not
being adequately reimbursed.
The requestor suggested the following two options for MS-DRG
assignment updates: (1) reassign cases describing the insertion of a
neurostimulator generator into the skull in combination with the
insertion of a neurostimulator lead into the brain (including cases
involving the use of the RNS[supreg] neurostimulator) from MS-DRG 023
to MS-DRG 021 with a change in title to ``Intracranial Vascular
Procedures with PDX Hemorrhage with CC or Craniectomy with
Neurostimulator;'' or (2) extract all cases from MS-DRG 023 involving a
craniectomy/craniotomy with device implant and create a new MS-DRG for
these cases.
The requestor acknowledged that the relatively low volume of cases
that only involve the insertion of a neurostimulator generator into the
skull in combination with the insertion of a neurostimulator lead into
the brain in the claims data is likely not sufficient to warrant the
creation of a new MS-DRG. The requestor further stated given the
limited options within the existing MS-DRG structure that fit from both
a cost and clinical cohesiveness perspective, they believe that MS-DRG
021 is the most logical fit in terms of average costs and clinical
coherence for reassignment of RNS[supreg] System cases even though,
according to the requestor, the insertion of a neurostimulator
generator into the skull in combination with the insertion of a
neurostimulator lead into the brain is technically more complex and
involves a higher level of training, extreme precision and
sophisticated technology than performing a craniectomy for hemorrhage.
As another option, the requestor identified procedures involving a
craniectomy or craniotomy by searching for ICD-10-PCS codes that
describe the root operations ``Destruction'', ``Division'',
``Drainage'', ``Excision'', Extirpation'', or ``Insertion'' performed
related to the brain or specific brain anatomy (for example, cerebral
ventricle, cerebellum) with an ``Open Approach'' in the claims data.
The requestor also said they identified claims involving a device
implant by searching for ICD-10-PCS codes that describe the root
operation ``Insertion'' and stated that they found that the claims they
identified had average costs comparable to the average costs of
RNS[supreg] cases and therefore creating a new MS-DRG for all cases
involving a craniectomy/craniotomy with device implant was a reasonable
alternative option.
We stated in the proposed rule that to begin our analysis, we
identified the ICD-10-CM diagnosis codes that describe a diagnosis of
epilepsy. We referred the reader to Table 6P.2a associated with the
proposed rule (and available at: https://www.cms.gov/medicare/medicare-
fee-for-service-payment/acuteinpatientpps) for the list of the ICD-10-
CM codes that we identified.
We stated in the proposed rule that we then examined the claims
data from the September 2022 update of the FY 2022 MedPAR file for all
cases in MS-DRG 023 and compared the results to cases reporting a
neurostimulator generator inserted into the skull with the insertion of
a neurostimulator lead into the brain (including cases involving the
use of the RNS[supreg] neurostimulator) that had a principal diagnosis
of epilepsy in MS-DRG 023. The following table shows our findings:
BILLING CODE 4120-01-P
[GRAPHIC] [TIFF OMITTED] TR28AU23.006
[[Page 58663]]
As shown in the table, for MS-DRG 023, we identified a total of
11,602 cases, with an average length of stay of 10.4 days and average
costs of $47,321. Of those 11,602 cases in MS-DRG 023, there were 57
cases describing a neurostimulator generator inserted into the skull
with the insertion of a neurostimulator lead into the brain (including
cases involving the use of the RNS[supreg] neurostimulator) that had a
principal diagnosis of epilepsy. We noted that the 57 cases describing
a neurostimulator generator inserted into the skull with the insertion
of a neurostimulator lead into the brain (including cases involving the
use of the RNS[supreg] neurostimulator) and a principal diagnosis of
epilepsy had an average length of stay of 3.1 days and average costs of
$58,676, as compared to the average length of stay of 10.4 days and
average costs of $47,321 for all cases in MS-DRG 023. We stated that
while these neurostimulator cases had average costs that were $11,355
higher than the average costs of all cases in MS-DRG 023, there were
only a total of 57 cases. We stated we reviewed these data, and agreed
with the requestor that the number of cases continued to be too small
to warrant the creation of a new MS-DRG for these cases, for the
reasons discussed in the FY 2018 IPPS/LTCH PPS final rule (82 FR 38015
through 38019) and the FY 2021 IPPS/LTCH PPS final rule (85 FR 58459
through 58462).
As stated in the proposed rule, we examined the reassignment of
cases describing a neurostimulator generator inserted into the skull
with the insertion of a neurostimulator lead into the brain (including
cases involving the use of the RNS[supreg] neurostimulator) to MS-DRGs
020, 021, and 022 (Intracranial Vascular Procedures with PDX Hemorrhage
with MCC, with CC, and without CC/MCC, respectively). While the request
was to reassign these cases to MS-DRG 021, we noted that MS-DRG 021 is
specifically differentiated according to the presence of a secondary
diagnosis with a severity level designation of a complication or
comorbidity (CC). Cases with a neurostimulator generator inserted into
the skull with the insertion of a neurostimulator lead into the brain
(including cases involving the use of the RNS[supreg] neurostimulator)
do not always involve the presence of a secondary diagnosis with a
severity level designation of a complication or comorbidity (CC), and
therefore we reviewed data for all three MS-DRGs. The following table
shows our findings:
[GRAPHIC] [TIFF OMITTED] TR28AU23.007
As shown in the table, for MS-DRG 020, there were a total of 2,016
cases with an average length of stay of 13.9 days and average costs of
$72,776. For MS-DRG 021, there were a total of 548 cases with an
average length of stay of 9.1 days and average costs of $53,973. For
MS-DRG 022, there were a total of 270 cases with an average length of
stay of 3.9 days and average costs of $31,248.
Because all cases describing a neurostimulator generator inserted
into the skull with the insertion of a neurostimulator lead into the
brain (including cases involving the use of the RNS[supreg]
neurostimulator) with a principal diagnosis of epilepsy are assigned
MS-DRG 023 even if there is no MCC reported and there is a three-way
split within MS-DRGs 020, 021, and 022, in the proposed rule we stated
we also analyzed the cases reporting a neurostimulator generator
inserted into the skull with the insertion of a neurostimulator lead
into the brain (including cases involving the use of the RNS[supreg]
neurostimulator) with a principal diagnosis of epilepsy for the
presence or absence of a secondary diagnosis designated as a
complication or comorbidity (CC) or a major complication or comorbidity
(MCC). The following table shows our findings:
[GRAPHIC] [TIFF OMITTED] TR28AU23.008
[[Page 58664]]
As noted in the proposed rule, this data analysis shows that,
similar to our findings as summarized in the FY 2018 and FY 2021 IPPS/
LTCH PPS final rules, on average, the cases in MS-DRG 023 describing a
neurostimulator generator inserted into the skull with the insertion of
a neurostimulator lead into the brain (including cases involving the
use of the RNS[supreg] neurostimulator) and a principal diagnosis of
epilepsy have average costs that are relatively more similar to the
average costs of cases in MS-DRG 021 ($58,676 compared to $53,973),
while the average length of stay is shorter (3.1 days compared to 9.1
days). However, when distributed based on the presence or absence of a
secondary diagnosis designated as a CC or an MCC, the 57 cases in MS-
DRG 023 reporting a principal diagnosis of epilepsy with a
neurostimulator generator inserted into the skull and insertion of a
neurostimulator lead into brain have higher average costs and shorter
lengths of stay than the cases in the FY 2022 MedPAR file for MS-DRGs
021 and 022 while having lower average costs and shorter lengths of
stay than the cases in MS-DRG 020. We stated we reviewed the clinical
issues and the claims data and continued to not support reassigning the
cases describing a neurostimulator generator inserted into the skull
with the insertion of a neurostimulator lead into the brain (including
cases involving the use of the RNS[supreg] neurostimulator) and a
principal diagnosis of epilepsy from MS-DRG 023 to MS-DRGs 020, 021, or
022. We noted in the proposed rule that as also discussed in the FY
2018 and FY 2021 IPPS/LTCH PPS final rules, the cases in MS-DRGs 020,
021, and 022 have a principal diagnosis of a hemorrhage. The
RNS[supreg] neurostimulator generators are not used to treat patients
with diagnosis of a hemorrhage. We stated we continued to believe that
it is inappropriate to reassign cases representing a principal
diagnosis of epilepsy to a MS-DRG that contains cases that represent
the treatment of intracranial hemorrhage, as discussed in the FY 2018
IPPS/LTCH PPS final rule (82 FR 38015 through 38019) and the FY 2021
IPPS/LTCH PPS final rule (85 FR 58459 through 58462). We noted that the
differences in average length of stay and average costs based on the
more recent data continued to support this recommendation.
We noted, as discussed in section II.C.1.b of the proposed rule,
using the December 2022 update of the FY 2022 MedPAR file, we analyzed
how applying the NonCC subgroup criteria to all MS-DRGs currently split
into three severity levels would affect the MS-DRG structure beginning
in FY 2024. As stated in the proposed rule, findings from our analysis
indicated that MS-DRGs 020, 021, and 022 as well as approximately 44
other base MS-DRGs would potentially be subject to change based on the
three-way severity level split criterion finalized in FY 2021. We
referred the reader to Table 6P.10b associated with the proposed rule
(which is available on the CMS website at: https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/AcuteInpatientPPS) for the
list of the 135 MS-DRGs that would be subject to deletion and the list
of the 86 new MS-DRGs that would potentially be created if the NonCC
subgroup criteria were applied.
We stated that we then explored alternative options, as was
requested. As stated in the proposed rule, we did not agree that
searching for ICD-10-PCS codes that describe the root operations
``Destruction'', ``Division'', ``Drainage'', ``Excision'',
Extirpation'', or ``Insertion'' performed related to the brain or
specific brain anatomy as suggested by the requestor was a reasonable
approach to find cases comparable to cases involving the use of the
RNS[supreg] System as these root operations all describe procedures
performed for distinct and differing objectives. Instead, to review for
similar utilization of resources, we stated we further analyzed the
data to identify those cases currently reporting a procedure code
combination representing neurostimulator generator and lead code
combinations that are captured under the list referred to as ``Major
Device Implant'' in the GROUPER logic for MS-DRGs 023 and 024 since the
ICD-10-PCS code combinations that capture the use of the RNS[supreg]
neurostimulator generator and leads that would determine an assignment
of a case to MS-DRGs 023 are also found on the ``Major Device Implant''
list. The neurostimulator generators on this list are inserted into the
skull, as well as into the subcutaneous areas of the chest, back, or
abdomen. The leads are all inserted into the brain. The following table
shows our findings:
[[Page 58665]]
[GRAPHIC] [TIFF OMITTED] TR28AU23.009
BILLING CODE 4120-01-C
We noted that the 90 Major Device Implant list cases involving a
neurostimulator generator (including cases involving the use of the
RNS[supreg] neurostimulator and a principal diagnosis of epilepsy) have
an average length of stay of 7.3 days and average costs of $59,733 as
compared to all 11,602 cases in MS-DRG 023, which have an average
length of stay of 10.4 days and average costs of $47,321. In MS-DRG
024, we noted that the 395 Major Device Implant list cases involving a
neurostimulator generator have an average length of stay of 1.6 days
and average costs of $36,147 as compared to all 4,378 cases in MS-DRG
024, which have an average length of stay of 5.2 days and average costs
of $32,613. In the proposed rule, we stated that while these
neurostimulator cases have average costs that are higher than the
average costs of all cases in their respective MS-DRGs, it was
difficult to detect patterns of complexity and resource intensity.
Moreover, we stated we were unable to identify another MS-DRG in MDC 01
that would be a more appropriate MS-DRG assignment for these cases
based on the indication for and complexity of the procedure.
We noted that while our data findings demonstrated the average
costs are higher for the 57 cases with a principal diagnosis of
epilepsy with neurostimulator generator inserted into the skull and
insertion of a neurostimulator lead into brain when compared to all
cases in MS-DRG 023, these cases represent a small percentage of the
total number of cases reported in this MS-DRG. We stated that while we
appreciated the requestor's concerns regarding the differential in
average costs for cases describing the insertion of a neurostimulator
generator into the skull in combination with the insertion of a
neurostimulator lead into the brain when compared to all cases in their
assigned MS-DRG, we believe additional time is needed to evaluate these
cases as part of our ongoing examination of the case logic for MS-DRGs
023 through 027. As discussed in the FY 2023 IPPS/LTCH PPS final rule
(87 FR 48808 through 48820), in connection with our analysis of cases
reporting LITT procedures performed on the brain or brain stem in MDC
01, we have started to examine the logic for case assignment to MS-DRGs
023 through 027 to determine where further refinements could
potentially be made to better account for differences in the technical
complexity and resource utilization among the procedures that are
currently assigned to those MS-DRGs. In the proposed rule, we stated
that specifically, we are in the process of evaluating procedures that
are performed using an open craniotomy (where it is necessary to
surgically remove a portion of the skull) versus a percutaneous burr
hole (where a hole approximately the size of a pencil is drilled) to
obtain access to the brain in the performance of a procedure. We are
also reviewing the indications for these procedures, for example,
malignant neoplasms versus epilepsy to consider if there may be merit
in considering restructuring the current MS-DRGs to better recognize
the clinical distinctions
[[Page 58666]]
of these patient populations in the MS-DRGs.
As part of this evaluation, as discussed in the proposed rule, we
have begun to analyze the ICD-10 coded claims data from the September
2022 update of the FY 2022 MedPAR file to determine if the patients'
diagnoses, the objective of the procedure performed, the specific
anatomical site where the procedure is performed or the surgical
approach used (for example, open, percutaneous, percutaneous
endoscopic, among others) demonstrates a greater severity of illness
and/or increased treatment difficulty as we consider restructuring MS-
DRGs 023 through 027, including how to better align the clinical
indications with the performance of specific intracranial procedures.
We refer the reader to Tables 6P.2b through 6P.2f associated with the
proposed rule (which is available on the CMS website at: https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/AcuteInpatientPPS) for data analysis findings of cases assigned to MS-
DRGs 023 through 027 as we continue to look for patterns of complexity
and resource intensity.
In summary, in the proposed rule, we stated we believe that further
analysis of cases reporting a neurostimulator generator inserted into
the skull with the insertion of a neurostimulator lead into the brain
(including cases involving the use of the RNS[supreg] neurostimulator)
and a principal diagnosis of epilepsy is needed in connection with our
analysis of the claims data for MS-DRGs 023 through 027 prior to
proposing any further reassignment of these cases, to ensure clinical
coherence between these cases and the other cases with which they may
potentially be grouped. Therefore, we did not propose to reassign cases
describing a neurostimulator generator inserted into the skull with the
insertion of a neurostimulator lead into the brain (including cases
involving the use of the RNS[supreg] neurostimulator) from MS-DRG 023
to MS-DRG 021. We also did not propose to create a new MS-DRG for cases
involving a craniectomy/craniotomy with device implant at this time.
Comment: Some commenters expressed support for CMS' proposal to
maintain the assignment of cases reporting procedure codes that
describe a neurostimulator generator inserted into the skull with the
insertion of a neurostimulator lead into the brain (including cases
involving the use of the RNS[supreg] neurostimulator) in MS-DRG 023 and
to not propose to create a new MS-DRG for cases involving a
craniectomy/craniotomy with device implant. A commenter stated they
agreed that it was inappropriate to reassign cases that involve
craniectomy or craniotomy with the insertion of neurostimulator into
the skull in combination with the insertion of a neurostimulator lead
into the brain from MS-DRG 023 (Craniotomy with Major Device Implant or
Acute Complex CNS Principal Diagnosis with MCC or Chemotherapy Implant
or Epilepsy with Neurostimulator) to MS-DRG 021 (Intracranial Vascular
Procedures with Principal Diagnosis Hemorrhage with CC). This commenter
also stated that due to the low volume of total cases, they agreed that
creation of a new MS-DRG was not warranted.
Response: We appreciate the commenters' support.
Comment: Another commenter opposed CMS' proposal. The commenter
stated CMS' data analysis demonstrated that the average costs of
RNS[supreg] System cases continue to be substantially higher than the
average costs of all cases in their assigned MS-DRG 023. This commenter
further stated that they believed the data analysis supports extracting
cases reporting procedure codes that describe a neurostimulator
generator inserted into the skull with the insertion of a
neurostimulator lead into the brain (including cases involving the use
of the RNS[supreg] neurostimulator) (e.g., Major Device Implant list
cases) from MS-DRGs 023 and 024 and creating two new MS-DRGs with logic
maintained for cases with a principal diagnosis of epilepsy with
neurostimulator generator inserted into the skull and insertion of a
neurostimulator lead into brain. The commenter stated this refinement
would result in a much better alignment of the average costs of these
cases compared to their current MS-DRG assignment.
Response: We thank the commenter for their feedback. We continue to
be receptive to concerns about payment for cases reporting procedure
codes that describe a neurostimulator generator inserted into the skull
with the insertion of a neurostimulator lead into the brain (including
cases involving the use of the RNS[supreg] neurostimulator). While we
agree these neurostimulator cases can have average costs that are
higher than the average costs of all cases in their respective MS-DRGs,
in our analysis of this issue, it was difficult to detect patterns of
complexity and resource intensity. As discussed in the proposed rule
and earlier in this section, to review for similar utilization of
resources, we analyzed the data to identify those cases currently
reporting a procedure code combination representing neurostimulator
generator and lead code combinations that are captured under the list
referred to as ``Major Device Implant'' in the GROUPER logic for MS-
DRGs 023 and 024 since the ICD-10-PCS code combinations that capture
the use of the RNS[supreg] neurostimulator generator and leads that
would determine an assignment of a case to MS-DRGs 023 are also found
on the ``Major Device Implant'' list. In our analysis in MS-DRG 023, we
found 90 cases reporting a procedure code combination representing
neurostimulator generator and lead code combination captured under the
list referred to as ``Major Device Implant'' with the average length of
stay ranging from 1 day to 249 days and average costs ranging from
$22,717 to $250,272 for these cases. In MS-DRG 024, we found 395 cases
reporting a procedure code combination representing neurostimulator
generator and lead code combination captured under the list referred to
as ``Major Device Implant'' with the average length of stay ranging
from 1 day to 12 days and average costs ranging from $16,359 to $70,949
for these cases. We continue to believe that additional time is needed
to evaluate these cases as part of our ongoing examination of the case
logic for MS-DRGs 023 through 027. As part of our ongoing,
comprehensive analysis of the MS-DRGs under ICD-10, we will continue to
explore mechanisms to ensure clinical coherence between these cases and
the other cases with which they may potentially be grouped.
Therefore, after consideration of the public comments we received,
and for the reasons stated earlier, we are finalizing our proposal to
maintain the current assignment of cases describing a neurostimulator
generator inserted into the skull with the insertion of a
neurostimulator lead into the brain (including cases involving the use
of the RNS[supreg] neurostimulator), without modification, for FY 2024.
As noted in the proposed rule, as we continue this analysis of the
claims data with respect to MS-DRGs 023 through 027, we continue to
seek public comments and feedback on other factors that should be
considered in the potential restructuring of these MS-DRGs. As
previously described, we are examining procedures by their approach
(open versus percutaneous), clinical indications, and procedures that
involve the insertion or implantation of a device. We recognize the
logic for MS-DRGs 023 through 027 has grown more complex over the years
and believe there is opportunity for further refinement. We refer the
reader to the ICD-10 MS-DRG Definitions Manual, version 40.1, which is
available on the
[[Page 58667]]
CMS website at: https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/AcuteInpatientPPS/MS-DRG-Classifications-and-Software for
complete documentation of the GROUPER logic for MS-DRGs 023 through
027. Feedback and other suggestions may be submitted by October 20,
2023 and directed to the new electronic intake system, Medicare
Electronic Application Request Information SystemTM
(MEARISTM), discussed in section II.C.1.b. of the preamble
of the proposed rule and this final rule at: https://mearis.cms.gov/public/home.
Comment: In response to CMS' request for public comment and
feedback on the potential restructuring of the craniotomy MS-DRGs for
future consideration, a commenter stated they do not believe there is a
need for CMS to re-evaluate the assignment of neurosurgical procedures
within the craniotomy MS-DRGs 023 through 027. This commenter stated
that the procedures in these MS-DRGs have been well established from a
clinical homogeneity perspective, as well as a resource utilization
perspective, and the procedures costs have been stable. Another
commenter stated they appreciate CMS' willingness to review the
craniotomy/craniectomy MS-DRGs to ensure proper alignment of
procedures, indications, technical complexity, and resource
utilization. This commenter further noted there are a wide array of
diagnoses and procedures that fall within this range of MS-DRG and
stated they believe there are a variety of ways these MS-DRGs can be
classified.
A commenter mentioned that CMS referred the reader to Tables 6P.2b
through 6P.2f associated with the proposed rule (which is available on
the CMS website at: https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/AcuteInpatientPPS) for the data analysis findings of
cases assigned to MS-DRGs 023 through 027 and expressed concern that
there was no discussion of these findings or their significance in the
proposed rule. This commenter suggested that CMS comment on the
following:
How is CMS defining technical complexity and what factors
are being considered in the analysis?
Are there other data not included in Tables 6P.2b through
6P.2f that CMS is analyzing?
What is the timing for completion of the full analysis of
MS-DRGs 023-027?
Response: We thank the commenters for their feedback and will take
these recommendations into consideration as we further examine the
logic for case assignment. The data analysis as displayed in Tables
6P.2b through 6P.2f associated with the proposed rule was displayed to
provide the public an opportunity to review our examination of the
procedures by their approach (open versus percutaneous), clinical
indications, and procedures that involve the insertion or implantation
of a device and to reflect on what factors should be considered in the
potential restructuring of these MS-DRGs. We welcome further feedback
on how CMS should define technical complexity, what factors should be
considered in the analysis, and whether there are other data not
included in Tables 6P.2b through 6P.2f that CMS should analyze.
As discussed in the proposed rule, and earlier in this section, as
we continue the analysis of the claims data with respect to MS-DRGs 023
through 027, we are interested in receiving feedback on where further
refinements could potentially be made to better account for differences
in the technical complexity and resource utilization among the
procedures that are currently assigned to these MS-DRGs. Feedback and
other suggestions may be submitted by October 20, 2023 and directed to
the new electronic intake system, Medicare Electronic Application
Request Information SystemTM (MEARISTM) at
https://mearis.cms.gov/public/home. We note that we would address any
proposed modifications to the existing logic in future rulemaking.
3. MDC 02 (Diseases and Disorders of the Eye): Retinal Artery Occlusion
In the FY 2023 IPPS/LTCH PPS final rule (87 FR 48830 through
48835), we discussed a request we received to reassign cases reporting
diagnosis codes describing central retinal artery occlusion, and the
closely allied condition, branch retinal artery occlusion, from MS-DRG
123 (Neurological Eye Disorders) in MDC 02 (Diseases and Disorders of
the Eye) to MS-DRGs 061, 062, and 063 (Ischemic Stroke Precerebral
Occlusion or Transient Ischemia with Thrombolytic Agent with MCC, with
CC, and without CC/MCC, respectively) in MDC 01 (Diseases and Disorders
of the Nervous System).
Retinal artery occlusion refers to blockage of the retinal artery
that carries oxygen to the nerve cells in the retina at the back of the
eye, often by an embolus or thrombus. A blockage in the main artery in
the retina is called central retinal artery occlusion (CRAO). A
blockage in a smaller artery is called branch retinal artery occlusion
(BRAO).
Based on the various data analyses we performed to explore the
possible reassignment of cases with a principal diagnosis of CRAO or
BRAO with a procedure code describing the administration of a
thrombolytic agent or a procedure code describing hyperbaric oxygen
therapy, and the clinical analysis discussed, for FY 2023 we did not
propose any MS-DRG changes for cases with a principal diagnosis of CRAO
or BRAO with a procedure code describing the administration of a
thrombolytic agent or a procedure code describing hyperbaric oxygen
therapy.
In response to this final policy, as discussed in the FY 2024 IPPS/
LTCH PPS proposed rule (88 FR 26681 through 26684), we received a
request to again review the MS-DRG assignment of cases involving CRAO.
According to the requestor, CRAO is a form of acute ischemic stroke
which occurs when a vessel supplying blood to the brain is obstructed
and there is growing recognition of this diagnosis as a vascular
neurological problem. The requestor stated new evidence outlines
treatment of patients with CRAO with acute stroke protocols,
specifically with intravenous thrombolysis (IV tPA) or hyperbaric
oxygen therapy (HBOT), to improve outcomes. We stated in the proposed
rule that the requestor stated they performed an internal analysis of
their claims data and found that the average costs of cases reporting a
procedure code describing the administration of a thrombolytic agent
with a principal diagnosis of CRAO were 2.5 times higher than the
average costs of cases with a principal diagnosis of CRAO that did not
report the administration of a thrombolytic agent. The requestor
further stated the increased utilization of resources of these cases
was isolated to be almost entirely due to the cost of the tPA itself
based on this review of their internal cost level data. Consequently,
the requestor stated the continued assignment of these conditions to
MS-DRG 123 does not properly recognize disease complexity and
understates the resource utilization associated with administering
critical (potentially vision-saving) treatments for these cases.
The requestor suggested that the following three MS-DRGs be created
to reflect current standard of care for these patients:
Suggested New MS-DRG XXX--Neurological Eye Disorders with
Thrombolytic Agent with MCC.
Suggested New MS-DRG XXX--Neurological Eye Disorders with
Thrombolytic Agent with CC.
[[Page 58668]]
Suggested New MS-DRG XXX--Neurological Eye Disorders with
Thrombolytic Agent without CC/MCC.
We stated in the proposed rule that in reviewing this issue, it was
unclear why the requestor did not include branch retinal artery
occlusion (BRAO) in their request for FY 2024 rulemaking. As discussed
in the FY 2023 IPPS/LTCH PPS final rule, BRAO is a closely allied
condition. Therefore, we identified the ICD-10-CM codes found in the
following table that describe CRAO and BRAO.
BILLING CODE 4120-01-P
[GRAPHIC] [TIFF OMITTED] TR28AU23.010
We stated in the proposed rule that thrombolytic therapy is
identified with the following ICD-10-PCS procedure codes.
[GRAPHIC] [TIFF OMITTED] TR28AU23.011
In this final rule, we would like to correct the statement in the
proposed rule and add that thrombolytic therapy is also identified with
the following two ICD-10-PCS procedure codes.
[GRAPHIC] [TIFF OMITTED] TR28AU23.012
We stated in the proposed rule that our analysis of this grouping
issue again confirmed that, when a procedure code describing the
administration of a thrombolytic agent is reported with principal
diagnosis code describing CRAO or BRAO, these cases group to medical
MS-DRG 123. We refer the reader to the ICD-10 MS-DRG Definitions Manual
Version 40.1, which is available on the CMS website at: https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/AcuteInpatientPPS/MS-DRG-Classifications-and-Software for complete
documentation of the GROUPER logic for MS-DRG 123.
To begin our analysis, as discussed in the proposed rule, we
examined claims data from the September 2022 update of the FY 2022
MedPAR file for MS-DRG 123 to (1) identify cases reporting a principal
diagnosis code describing CRAO or BRAO without a procedure code
describing the administration of a thrombolytic agent and (2) identify
cases reporting diagnosis codes describing CRAO or BRAO with a
procedure code describing the administration of a thrombolytic agent.
Our findings are shown in the following table:
[[Page 58669]]
[GRAPHIC] [TIFF OMITTED] TR28AU23.013
As shown in the table, we identified a total of 2,771 cases within
MS-DRG 123 with an average length of stay of 2.5 days and average costs
of $6,720. Of these 2,771 cases, there are 839 cases that reported a
principal diagnosis code describing CRAO or BRAO without a procedure
code describing the administration of a thrombolytic agent with an
average length of stay of 2.2 days and average costs of $5,842. There
are 38 cases that reported a principal diagnosis code describing CRAO
or BRAO with a procedure code describing the administration of a
thrombolytic agent with an average length of stay of 3.3 days and
average costs of $13,302.
We stated in the proposed rule that the data analysis showed that
the 839 cases in MS-DRG 123 reporting a principal diagnosis code
describing CRAO or BRAO without a procedure code describing the
administration of a thrombolytic agent have lower average costs as
compared to all cases in MS-DRG 123 ($5,842 compared to $6,720), and a
shorter average length of stay (2.2 days compared to 2.5 days). For the
38 cases in MS-DRG 123 reporting a principal diagnosis code describing
CRAO or BRAO with a procedure code describing the administration of a
thrombolytic agent, however, the average length of stay is longer (3.3
days compared to 2.5 days) and the average costs are higher ($13,302
compared to $6,720) than the average length of stay and average costs
compared to all cases in that MS-DRG.
We stated in the proposed rule that we reviewed these data and did
not believe that the small subset of cases reporting a principal
diagnosis code describing CRAO or BRAO with a procedure code describing
the administration of a thrombolytic agent warranted the creation of
new MS-DRGs at this time. As stated in prior rulemaking, the MS-DRGs
are a classification system intended to group together diagnoses and
procedures with similar clinical characteristics and utilization of
resources. We generally seek to identify sufficiently large sets of
claims data with a resource/cost similarity and clinical similarity in
developing diagnostic-related groups rather than smaller subsets.
Moreover, in response to the specific request to create new MS-DRGs
subdivided into severity levels for the cases reporting a principal
diagnosis code describing CRAO with a procedure code describing the
administration of a thrombolytic agent, we only identified a total of
38 cases, so the criterion that there are at least 500 or more cases in
each subgroup cannot be met. Therefore, for FY 2024, we did not propose
to create new MS-DRGs subdivided into severity levels for cases
reporting a principal diagnosis code describing CRAO with a procedure
code describing the administration of a thrombolytic agent.
We noted in the proposed rule that we recognized however, that the
average costs of the small number of cases reporting a principal
diagnosis code describing CRAO or BRAO with a procedure code describing
the administration of a thrombolytic agent are greater when compared to
the average costs of all cases in MS-DRG 123. To explore other
mechanisms to address this request, we then reexamined the MS-DRGs
within MDC 02 to consider the possibility of reassigning the cases with
a principal diagnosis of CRAO or BRAO that receive the administration
of a thrombolytic agent to other MS-DRGs within MDC 02. As discussed in
the proposed rule, after further consideration, in reviewing the claims
data from the September 2022 update of the FY 2022 MedPAR file and
examining the clinical considerations, we stated that we believe that
the cases reporting a principal diagnosis code describing CRAO or BRAO
could more suitably group to MS-DRGs 124 and 125 (Other Disorders of
the Eye with MCC, and without MCC, respectively), which contain
diagnoses other than neurological conditions that affect the eye,
noting the vascular involvement inherent to a diagnosis of CRAO or
BRAO. We refer the reader to the ICD-10 MS-DRG Definitions Manual
Version 40.1, which is available on the CMS website at: https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/AcuteInpatientPPS/MS-DRG-Classifications-and-Software for complete
documentation of the GROUPER logic for MS-DRGs 124 and 125.
To determine how the resources for this subset of cases compared to
cases in MS-DRGs 124 and 125 as a whole, we stated we examined the
average costs and length of stay for cases in MS-DRGs 124 and 125. Our
findings are shown in this table.
[[Page 58670]]
[GRAPHIC] [TIFF OMITTED] TR28AU23.014
For this subset of cases, the average costs of the 38 cases
reporting a principal diagnosis code describing CRAO or BRAO with a
procedure code describing the administration of a thrombolytic agent
are slightly higher ($13,302 compared to $11,922) and the average
length of stay is shorter (3.3 days compared to 5.4 days) than for all
cases in MS-DRGs 124. The 839 cases reporting a principal diagnosis
code describing CRAO or BRAO without a procedure code describing the
administration of a thrombolytic agent have lower average costs ($5,842
compared to $7,425) and a shorter average length of stay (2.2 compared
to 3.3 days) than for cases in MS-DRG 125.
We stated in the proposed rule that our analysis demonstrated that
while the volume of cases is small, the average costs for the cases
reporting a principal diagnosis code describing CRAO or BRAO with a
procedure code describing the administration of a thrombolytic agent
currently grouping to MS-DRG 123 are more aligned with the average
costs of the cases currently grouping to MS-DRG 124. We stated we
reviewed these data and supported the addition of the ten diagnosis
codes listed previously to the GROUPER logic list for MS-DRGs 124 and
125. While the cases reporting a principal diagnosis code describing
CRAO or BRAO without a procedure code describing the administration of
a thrombolytic agent have lower costs and a shorter average length of
stay than for cases in MS-DRG 125, we stated we believed reassigning
these diagnosis codes to MS-DRGs 124 and 125 would better account for
the subset of patients who are treated with a thrombolytic agent, and
would more appropriately reflect the resources involved in evaluating
and treating these patients. We also stated we supported the assignment
of the cases reporting procedure codes describing the administration of
a thrombolytic agent to the higher (MCC) severity level MS-DRG 124 as
an enhancement to better reflect the clinical severity and resource use
involved in these cases.
Therefore, we proposed to reassign ICD-10-CM diagnosis codes
H34.10, H34.11, H34.12, H34.13, H34.231, H34.232, H34.233, and H34.239
from MDC 02 MS-DRG 123 to MS-DRGs 124 and 125, effective October 1,
2023, for FY 2024. We also proposed to add the procedure codes
describing the administration of a thrombolytic agent listed previously
to MS-DRG 124. In the proposed rule, we noted that the procedure codes
describing the administration of a thrombolytic agent are not
designated as operating room procedures for purposes of MS-DRG
assignment (``non-O.R. procedures''), therefore, as part of the logic
for MS-DRG 124, we also proposed to designate these codes as non-O.R.
procedures affecting the MS-DRG. Lastly, for consistency, we also
proposed to change the titles of MS-DRGs 124 and 125 from ``Other
Disorders of the Eye, with and without MCC, respectively'' to ``Other
Disorders of the Eye with MCC or Thrombolytic Agent, and without MCC,
respectively'' to better reflect the assigned procedures.
Comment: Commenters agreed with our proposal to reassign ICD-10-CM
diagnosis codes H34.10, H34.11, H34.12, H34.13, H34.231, H34.232,
H34.233, and H34.239 from MDC 02 MS-DRG 123 to MS-DRGs 124 and 125. A
commenter stated that this proposal better aligns with the resource
consumption of these cases. Another commenter stated that the proposed
MS-DRG assignment of cases reporting a principal diagnosis code
describing CRAO or BRAO with a procedure code describing the
administration of a thrombolytic agent would more accurately capture
the complexity of the condition and the necessary resources associated
with administering critical treatments.
Response: We thank the commenters for their support.
After consideration of the public comments we received, we are
finalizing our proposal to reassign ICD-10-CM diagnosis codes H34.10,
H34.11, H34.12, H34.13, H34.231, H34.232, H34.233, and H34.239 from MDC
02 MS-DRG 123 to MS-DRGs 124 and 125, without modification, effective
October 1, 2023, for FY 2024. In addition, we are finalizing our
proposal to add the procedure codes describing the administration of a
thrombolytic agent listed previously to MS-DRG 124. As part of the
logic for MS-DRG 124, we are also finalizing our proposal to designate
the 10 ICD-10-PCS procedure codes describing the administration of a
thrombolytic agent listed previously as non-O.R. procedures affecting
the MS-DRG. Lastly, we are finalizing our proposal to change the titles
of MS-DRGs 124 and 125 from ``Other Disorders of the Eye, with and
without MCC, respectively'' to ``Other Disorders of the Eye with MCC or
Thrombolytic Agent, and without MCC, respectively'' to better reflect
the assigned procedures for FY 2024.
4. MDC 04 (Diseases and Disorders of the Respiratory System)
a. Ultrasound Accelerated Thrombolysis for Pulmonary Embolism
As discussed in the FY 2024 IPPS/LTCH PPS proposed rule (88 FR
26684 through 26691), we received a request to reassign cases reporting
ultrasound accelerated thrombolysis (USAT) with the administration of
thrombolytic(s) for the treatment of pulmonary embolism (PE) from MS-
DRGs 166, 167, and 168 (Other Respiratory System O.R. Procedures with
MCC, with CC, and without CC/MCC, respectively) to MS-DRGs 163, 164,
and 165 (Major Chest Procedures with MCC, with CC, and without CC/MCC,
respectively).
A pulmonary embolism is an obstruction of pulmonary vasculature
most commonly caused by a venous thrombus, and less commonly by fat or
tumor tissue or air bubbles or both. Risk factors for a pulmonary
embolism include prolonged immobilization from any cause, obesity,
cancer, fractured hip or leg, use of certain medications such as oral
contraceptives, presence of certain medical conditions such as heart
failure, sickle cell anemia, or certain congenital heart defects.
Common symptoms of pulmonary embolism include shortness of breath with
or without chest pain, tachycardia, hemoptysis, low grade fever,
pleural effusion, and depending on the etiology of the embolus, might
include lower extremity pain or swelling, syncope, jugular venous
distention. Alternatively, a pulmonary embolus could be asymptomatic.
Thrombolysis is a type of treatment where the infusion of
thrombolytics (fibrinolytic or ``clot-busting'' drugs) is used to
dissolve blood clots that form in the arteries or veins with the goal
of
[[Page 58671]]
improving blood flow and preventing long-term damage to tissues and
organs. When a clot forms in the arteries of the lungs it is known as a
pulmonary embolism. In addition, clots in the veins of the legs causing
deep venous thrombosis (DVT) may also result in pulmonary embolism if a
piece of the clot breaks off and travels to an artery in the lungs.
Conventional catheter-directed thrombolysis (CDT) procedures generally
rely on a multi-sidehole catheter placed adjacent to the thrombus
through which thrombolytics are delivered directly to the thrombus,
however, the EKOSTM EkoSonic[supreg] Endovascular System
(EKOSTM System) employs ultrasound to assist in
thrombolysis. The ultrasound does not itself dissolve the thrombus, but
pulses of ultrasonic energy temporarily make the fibrin in the thrombus
more porous and increase fluid flow within the thrombus. High
frequency, low-intensity ultrasonic waves create a pressure gradient
that drives the thrombolytic into the thrombus and keeps it in close
proximity to the binding sites. USAT is also referred to as ultrasound-
assisted thrombolysis or ultrasound-enhanced thrombolysis.
As discussed in the proposed rule, according to the requestor (the
manufacturer of the EKOSTM device), USAT with the
administration of thrombolytic(s) for the treatment of PE performed
using the EKOSTM device utilizes more resources in
comparison to other procedures that are currently assigned to MS-DRGs
166, 167, and 168 and is not clinically coherent with the other
procedures assigned to those MS-DRGs. The requestor stated that the
cases reporting USAT with the administration of thrombolytic(s) for PE
are more comparable with and more clinically aligned with the
procedures assigned to MS-DRGs 163, 164, and 165. The requestor stated
they performed an analysis of cases reporting USAT for PE with the
following ICD-10-PCS procedure codes.
[GRAPHIC] [TIFF OMITTED] TR28AU23.015
We noted in the proposed rule that the requestor did not include a
list of diagnosis codes describing PE or a list of procedure codes
describing the administration of thrombolytic(s) in connection with its
analysis.
In the FY 2021 IPPS/LTCH PPS final rule (85 FR 58561 through 85 FR
58579), we summarized and responded to public comments expressing
concern with the proposed MS-DRG assignments for the newly created
procedure codes describing USAT of several anatomic sites that were
effective with discharges on and after October 1, 2020 (FY 2021). We
noted in the proposed rule that similar to the current request for FY
2024, for FY 2021, the commenters recommended that USAT procedures
performed with the EKOSTM device for the treatment of
pulmonary embolism be assigned to MS-DRGs 163, 164, and 165 instead of
MS-DRGs 166, 167, and 168. We refer the reader to the FY 2021 IPPS/LTCH
PPS final rule (85 FR 58561 through 85 FR 58579), available on the CMS
website at: https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/AcuteInpatientPPS for the detailed discussion.
As discussed in the proposed rule, we analyzed claims data from the
September 2022 update of the FY 2022 MedPAR file for MS-DRGs 166, 167,
and 168 for all cases reporting a principal diagnosis of PE and USAT
procedure with and without the administration of thrombolytic(s). We
identified claims reporting an USAT procedure, the administration of
thrombolytic(s), and a diagnosis of PE with the listed codes shown in
the following tables.
[[Page 58672]]
[GRAPHIC] [TIFF OMITTED] TR28AU23.016
[GRAPHIC] [TIFF OMITTED] TR28AU23.017
[GRAPHIC] [TIFF OMITTED] TR28AU23.018
We noted that the listed procedure codes describing USAT identified
for our claims analysis differ from the procedure codes identified by
the requestor for its analysis. Clinically, we did not agree that
thrombolysis of non-pulmonary anatomic sites (for example, subclavian
artery, axillary artery, etc.) would be performed for the treatment of
a PE. We also noted that the procedure codes describing thrombolysis of
non-pulmonary anatomic sites provided by the requestor are assigned to
MDC 05 (Diseases and Disorders of the Circulatory System) and not to
MDC 04 (Diseases and Disorders of the Respiratory System) where MS-DRGs
163, 164, 165, 166, 167, and 168 are assigned. The findings from our
analysis are shown in the following table.
[GRAPHIC] [TIFF OMITTED] TR28AU23.019
As shown in the table, we identified a total of 8,318 cases in MS-
DRG 166 with an average length of stay of 11 days and average costs of
$31,910. Of the 8,318 cases, we found 826 cases reporting a principal
diagnosis of PE and USAT with thrombolytic(s) with an average length of
stay of 5.4 days and average costs of $28,912 and 161 cases reporting a
principal diagnosis of PE and USAT without thrombolytic(s) with an
average length of stay of 5.4 days and
[[Page 58673]]
average costs of $27,897. The data demonstrate that the cases reporting
a principal diagnosis of PE and USAT with or without thrombolytic(s)
have a shorter average length of stay compared to the average length of
stay of all the cases in MS-DRG 166 (5.4 days and 5.4 days,
respectively versus 11 days). Similarly, the average costs for the
cases reporting a principal diagnosis of PE and USAT with or without
thrombolytic(s) are lower than the average costs of all the cases in
MS-DRG 166 ($28,912 and $27,897, respectively versus $31,910). The data
indicate that the cases reporting a principal diagnosis of PE and USAT
with or without thrombolytic(s) appear to be grouped and paid
appropriately, despite the fact the logic for case assignment to MS-DRG
166 requires the reporting of at least one or more secondary MCC
diagnoses, and it would not be unreasonable to expect these cases to be
more expensive in comparison to all the cases in MS-DRG 166. As the
average costs for these cases are lower than the average costs of all
the cases in MS-DRG 166, the data appear to reflect that the reporting
of at least one or more secondary MCC diagnoses and use of the
EKOSTM device technology did not impact consumption of
resources for these cases in MS-DRG 166.
For MS-DRG 167, we identified a total of 4,306 cases with an
average length of stay of 4.7 days and average costs of $16,290. Of the
4,306 cases, we found 316 cases reporting a principal diagnosis of PE
and USAT with thrombolytic(s) with an average length of stay of 3.9
days and average costs of $23,240 and 52 cases reporting a principal
diagnosis of PE and USAT without thrombolytic(s) with an average length
of stay of 3.7 days and average costs of $23,608. The data demonstrate
that the cases reporting a principal diagnosis of PE and USAT with or
without thrombolytic(s) have a shorter average length of stay compared
to the average length of stay of all the cases in MS-DRG 167 (3.9 days
and 3.7 days, respectively versus 4.7 days). Conversely, the average
costs for the cases reporting a principal diagnosis of PE and USAT with
or without thrombolytic(s) are higher than the average costs of all the
cases in MS-DRG 167 ($23,240 and $23,608, respectively versus $16,290)
with a corresponding difference in average costs of $6,950 and $7,318,
respectively. The data indicate the cases reporting a principal
diagnosis of PE and USAT with or without thrombolytic(s) appear to
consume more resources in comparison to the other cases in MS-DRG 167,
although it is unclear if the higher resource consumption is a direct
result of the EKOSTM device technology utilized in the
performance of the thrombolysis procedure, or the fact that these cases
also include the reporting of at least one or more secondary CC
diagnoses, or a combination of both factors.
For MS-DRG 168, we identified a total of 1,441 cases with an
average length of stay of 2.3 days and average costs of $12,379. Of the
1,441 cases, we found 65 cases reporting a principal diagnosis of PE
and USAT with thrombolytic(s) with an average length of stay of 2.8
days and average costs of $20,156 and 15 cases reporting a principal
diagnosis of PE and USAT without thrombolytic(s) with an average length
of stay of 2.7 days and average costs of $20,112. The data demonstrate
that the cases reporting a principal diagnosis of PE and USAT with or
without thrombolytic(s) have a longer average length of stay compared
to the average length of stay of all the cases in MS-DRG 168 (2.8 days
and 2.7 days, respectively versus 2.3 days). Additionally, the average
costs for the cases reporting a principal diagnosis of PE and USAT with
or without thrombolytic(s) are higher than the average costs of all the
cases in MS-DRG 168 ($20,156 and $20,112, respectively versus $12,379)
with a corresponding difference in average costs of $7,777 and $7,733,
respectively. Similar to our findings for MS-DRG 167, the data for MS-
DRG 168 indicate the cases reporting a principal diagnosis of PE and
USAT with or without thrombolytic(s) appear to consume more resources
in comparison to the other cases in MS-DRG 168. However, it is unclear
if the higher resource consumption is a direct result of the
EKOSTM device technology utilized in the performance of the
thrombolysis procedure alone, or if there are other contributing
factors, since cases grouping to MS-DRG 168 do not include the
reporting of at least one or more secondary CC or MCC diagnoses.
We stated in the proposed rule that based on our review of the data
for MS-DRGs 166, 167, and 168 and our initial analysis for cases
reporting a principal diagnosis of PE and USAT procedure with and
without the administration of thrombolytic(s), the findings also
suggest that the administration of thrombolytic(s) is not a significant
factor in the consumption of resources for these cases in MS-DRGs 166,
167, and 168 where USAT is performed in the treatment of a PE. For
example, in MS-DRG 166, there are 826 cases reporting a principal
diagnosis of PE and USAT procedure with the administration of
thrombolytic(s) and 161 cases reporting a principal diagnosis of PE and
USAT procedure without the administration of thrombolytic(s), however,
both subsets of cases have an equivalent average length of stay of 5.4
days and a difference in average costs of $1,015 ($28,912-$27,897 =
$1,015). For MS-DRG 167, there are 316 cases reporting a principal
diagnosis of PE and USAT procedure with the administration of
thrombolytic(s) and 52 cases reporting a principal diagnosis of PE and
USAT procedure without the administration of thrombolytic(s), however,
both subsets of cases have a similar average length of stay (3.9 days
and 3.7 days, respectively) with a difference in average costs of $368
($23,608-$23,240 = $368). For MS-DRG 168, there are 65 cases reporting
a principal diagnosis of PE and USAT procedure with the administration
of thrombolytic(s) and 15 cases reporting a principal diagnosis of PE
and USAT procedure without the administration of thrombolytic(s),
however, both subsets of cases have a similar average length of stay
(2.8 days and 2.7 days, respectively) with a difference in average
costs of $44 ($20,156-$20,112 = $44). Because the administration of
thrombolytic(s) would be expected to increase resource consumption, the
small difference in average costs between these two sets of cases could
also suggest that the administration of thrombolytic(s) was not
consistently reported.
We noted in the proposed rule that while the request we received
was to reassign cases reporting ultrasound accelerated thrombolysis
(USAT) with the administration of thrombolytic(s) for the treatment of
pulmonary embolism (PE) from MS-DRGs 166, 167, and 168 to MS-DRGs 163,
164, and 165, based on our findings that suggest the administration of
thrombolytic(s) is not a significant factor in the consumption of
resources for those cases or that a code describing the administration
of thrombolytic(s) may not have been consistently reported on a subset
of claims that also reported a code identifying USAT was performed, we
then analyzed claims data from the September 2022 update of the FY 2022
MedPAR file for all cases in MS-DRGs 163, 164, and 165 and compared it
to the cases reporting a principal diagnosis of PE and USAT procedure
with or without thrombolytic(s) in MS-DRGs 166, 167, and 168. The
findings from our analysis are shown in the following tables.
[[Page 58674]]
[GRAPHIC] [TIFF OMITTED] TR28AU23.020
[GRAPHIC] [TIFF OMITTED] TR28AU23.021
The average costs of the 987 cases reporting a principal diagnosis
of PE and USAT with or without thrombolytic(s) in MS-DRG 166 are
$10,380 less than the average costs of all cases in MS-DRG 163
($39,126-$28,746=$10,380) and have an average length of stay that is
approximately half the average length of stay of all cases in MS-DRG
163 (5.4 days versus 10.3 days). As stated previously, our analysis of
these cases demonstrate they appear to be grouped and paid
appropriately in MS-DRG 166. The 368 cases reporting a principal
diagnosis of PE and USAT with or without thrombolytic(s) in MS-DRG 167
have a shorter average length of stay (3.9 days versus 4.7 days) in
comparison to all the cases in MS-DRG 164, however, the average costs
of the 368 cases reporting a principal diagnosis of PE and USAT with or
without thrombolytic(s) in MS-DRG 167 are more comparable to the
average costs of all the cases in MS-DRG 164 ($23,292 versus $22,040).
Finally, the 80 cases reporting a principal diagnosis of PE and USAT
with or without thrombolytic(s) in MS-DRG 168 have an average length of
stay that is more comparable to all the cases in the MS-DRG 165 (2.8
days versus 2.7 days), however, the average costs for the 80 cases
continue to be higher in comparison to all the cases in MS-DRG 165
($20,148 versus $16,404).
We stated in the proposed rule that upon analysis of the claims
data and our review of the request, we do not agree with reassigning
cases reporting an USAT procedure with the administration of
thrombolytic(s) and a principal diagnosis of PE from MS-DRGs 166, 167,
and 168 to MS-DRGs 163, 164, and 165. As previously noted, the data do
not support that cases reporting USAT (with or without thrombolytic(s))
for PE utilize similar resources when compared to other procedures
currently assigned to MS-DRGs 163 and 165. Costs were only comparable
with procedures currently assigned to MS-DRG 164. Further, we stated we
do not agree that cases reporting USAT (with or without
thrombolytic(s)) are more comparable with and more clinically aligned
with the procedures assigned to MS-DRGs 163, 164, and 165. The vast
majority of procedures in these MS-DRGs describe procedures performed
on the trachea, bronchus or lungs with either an open approach or a
percutaneous endoscopic approach in contrast to the USAT endovascular
(percutaneous) procedure performed on the pulmonary trunk, arteries or
veins. In addition, the majority of procedures in MS-DRGs 163, 164, and
165 are performed on patients who are not clinically similar to
patients who undergo USAT for PE since they describe procedures such as
destruction (ablation) or excision performed for patients with
conditions other than a PE, such as malignant neoplasm, pneumonia, or
pulmonary fibrosis. Lastly, a number of procedures in these MS-DRGs
also involve the use of a permanently implanted device while the
procedures utilizing USAT do not. Therefore, we stated in the proposed
rule that we do not consider USAT procedures to be major chest
procedures, nor do we believe the cases reporting USAT with (or without
thrombolytic(s)) for PE utilize similar resources when compared to
other procedures currently assigned to MS-DRGs 163, 164, and 165.
As stated in the proposed rule, the findings from our analysis
suggest that the administration of thrombolytic(s) is not a significant
factor in the consumption of resources for cases in MS-DRGs 166, 167,
and 168 reporting an USAT procedure performed for the treatment of a PE
or that a code describing the administration of thrombolytic(s) may not
have been consistently reported on a subset of claims that also
reported a code identifying USAT was performed, or a combination of
both factors. Based on these findings related to the administration of
thrombolytic(s), we stated we believed it would also be beneficial to
examine cases reporting standard CDT procedures with or without
thrombolytic(s) for the treatment of PE in MS-DRGs 166, 167, and 168,
and compare the findings to the cases reporting USAT with or without
thrombolytic(s) for the treatment of PE.
Therefore, as discussed in the proposed rule, we conducted
additional analyses to determine if there were significant differences
in resource utilization for cases reporting standard CDT with or
without thrombolytic(s) versus USAT procedures with or without
thrombolytic(s) in the treatment of PE, since claims data to compare
the two modalities is now available and studies have reported similar
clinical outcomes in reducing PE regardless of which thrombolysis
modality is utilized.3 4
---------------------------------------------------------------------------
\3\ Rothschild DP, Goldstein JA, Ciacci J, Bowers TR.
Ultrasound-accelerated thrombolysis (USAT) versus standard catheter-
directed thrombolysis (CDT) for treatment of pulmonary embolism: A
retrospective analysis. Vasc Med. 2019 Jun;24(3):234-240.
\4\ Sista A, et al. Is it Time to Sunset Ultrasound-Assisted
Catheter-Directed Thrombolysis for Submassive PE?*. J Am Coll
Cardiol Intv. 2021 Jun, 14 (12) 1374-1375.
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[[Page 58675]]
In the proposed rule, we stated that we analyzed claims data from
the September 2022 update of the FY 2022 MedPAR file for all cases in
MS-DRGs 166, 167, and 168 and cases reporting a standard CDT procedure
with or without the administration of thrombolytic(s) and a principal
diagnosis of PE. We utilized the previously listed procedure codes for
the administration of thrombolytic(s) and the previously listed
diagnosis codes for a principal diagnosis of PE. We identified cases
describing standard CDT procedures performed in the treatment of PE
with the following procedure codes.
[GRAPHIC] [TIFF OMITTED] TR28AU23.022
The findings from our analysis are shown in the following table. We
noted that there were no cases found to report a principal diagnosis of
PE and standard CDT with or without thrombolytic(s) in MS-DRGs 168.
[GRAPHIC] [TIFF OMITTED] TR28AU23.023
The data shows that the 7 cases reporting a principal diagnosis of
PE and standard CDT with or without thrombolytic(s) in MS-DRG 166 have
a shorter average length of stay compared to all cases in MS-DRG 166
(3.3 days versus 11 days) and lower average costs ($18,472 versus
$31,910). For MS-DRG 167, the data shows that the 6 cases reporting a
principal diagnosis of PE and CDT with or without thrombolytic(s) have
a shorter average length of stay compared to all cases in MS-DRG 167
(3.5 days versus 4.7 days), however the average costs are higher
($30,928 versus $16,290).
As discussed in the proposed rule, based on our review and the
claims data analysis for cases in MS-DRGs 163, 164, and 165, and for
MS-DRGs 166, 167, and 168 and cases reporting standard CDT or USAT with
or without thrombolytic(s) and a principal diagnosis of PE, we believe
that while this subset of cases for patients undergoing a thrombolysis
(CDT or USAT) procedure for PE does not clinically align with patients
undergoing surgery for malignancy or treatment for infection and does
not involve the same level of complexity, monitoring or support as
cases grouping to MS-DRGs 163, 164, and 165, the differences in
resource consumption warrant proposed reassignment of these cases.
Specifically, we believe the clinical and data analyses support
creating a new base MS-DRG to distinguish cases reporting a principal
diagnosis of PE and USAT or standard CDT procedure with or without
thrombolytic(s) from other cases currently grouping to MS-DRGs 166,
167, and 168. We believe a new MS-DRG would reflect more appropriate
payment for USAT and standard CDT procedures in the treatment of PE.
We stated in the proposed rule that to compare and analyze the
impact of our suggested modifications, we ran a simulation using the
most recent claims data from the December 2022 update of the FY 2022
MedPAR file. The following table illustrates our findings for all 1,534
cases reporting procedure codes describing an USAT or CDT procedure
with a principal diagnosis of PE.
[GRAPHIC] [TIFF OMITTED] TR28AU23.024
Consistent with our established process as discussed in section
II.C.1.b. of the preamble of the proposed rule and this final rule,
once the decision has been made to propose to make further
modifications to the MS-DRGs, such as creating a new base MS-DRG, all
five criteria to create subgroups must be met for the base MS-DRG to be
split (or subdivided) by a CC subgroup. Therefore, we applied the
criteria to create subgroups in a base MS-DRG. We noted that, as shown
in the table that follows, a three-way split of this base MS-DRG failed
to meet the criterion that there be at least 500 cases in both the CC
and the NonCC (without CC/MCC) subgroup and it also failed to
[[Page 58676]]
meet the criterion that there be a 20% difference in average costs
between the CC and NonCC subgroup.
[GRAPHIC] [TIFF OMITTED] TR28AU23.025
As also discussed in section II.C.1.b. of the preamble of the
proposed rule and this final rule, if the criteria for a three-way
split fail, the next step is to determine if the criteria are satisfied
for a two-way split. We therefore applied the criteria for a two-way
split for the ``with MCC and without MCC'' subgroups. We noted that, as
shown in the table that follows, a two-way split of this base MS-DRG
failed to meet the criterion that there be at least 500 cases in the
without MCC (CC+NonCC) subgroup. The following table illustrates our
findings.
[GRAPHIC] [TIFF OMITTED] TR28AU23.026
We then applied the criteria for a two-way split for the ``with CC/
MCC and without CC/MCC'' subgroups. As with the analysis of the three-
way severity split as described previously, and as shown in the table
that follows, a two-way split of this base MS-DRG failed to meet the
criterion that there be at least 500 cases in the without CC/MCC
(NonCC) subgroup.
[GRAPHIC] [TIFF OMITTED] TR28AU23.027
We noted that because the criteria for both of the two-way splits
failed, a split (or CC subgroup) is not warranted for the proposed new
base MS-DRG. As a result, for FY 2024, we proposed to create new base
MS-DRG 173 (Ultrasound Accelerated and Other Thrombolysis with
Principal Diagnosis Pulmonary Embolism). The following table reflects a
simulation of the proposed new base MS-DRG.
[GRAPHIC] [TIFF OMITTED] TR28AU23.028
BILLING CODE 4120-01-C
We stated we believed the resulting proposed MS-DRG better
recognizes the consumption of resources and maintains clinical
coherence for both USAT and CDT procedures performed for the treatment
of PE.
We proposed to define the logic for the proposed new MS-DRG using
the previously listed diagnosis codes for PE and the previously listed
procedure codes for USAT and CDT, as identified and discussed in our
analysis of the claims data in the proposed rule and in this final
rule.
Comment: Commenters supported the proposal to create new MS-DRG 173
(Ultrasound Accelerated and Other Thrombolysis with Principal Diagnosis
Pulmonary Embolism) given the data and information provided. A
commenter expressed appreciation that CMS has acted to correct payment
disparities for these procedures and recommended that CMS also utilize
this approach to address other, similar MS-DRG reassignment requests
that may involve a component with a lower volume of cases. Another
commenter stated the proposal aligns more closely with the resources
used, as opposed to the current MS-DRGs 166, 167, and 168. The
commenter requested that CMS continue to analyze the data for these
cases and consider creating an additional MS-DRG to reflect major
complications and comorbidities, if warranted by further analysis.
Other commenters who supported the proposal to reassign the cases from
their current MS-DRG assignment expressed concern about the proposed
single base MS-DRG. Specifically, the commenters stated the proposal
does not acknowledge the secondary diagnosis
[[Page 58677]]
impact that the CMS analysis recognized may or may not be a
contributing factor for the higher average costs of the cases reporting
USAT procedures. The commenters also stated that the proposal
demonstrates that application of the NonCC Subgroup may not be
appropriate for some MS-DRGs since the result in this instance is for a
base MS-DRG with a lower relative weight because severity of illness is
unable to be recognized.
Response: We thank the commenters for their support. In response to
the concerns raised by the commenters regarding the impact application
of the NonCC subgroup criteria has on proposed new MS-DRG 173, we note
that, as discussed in the proposed rule and in this final rule, we
apply the NonCC subgroup criteria once the decision is made to propose
to make further modifications to the MS-DRGs. While application of the
criteria did not support a severity level split for proposed MS-DRG 173
for FY 2024, we intend to reevaluate for future rulemaking whether the
criteria for a potential ``with MCC'' and ``without MCC'' two-way split
would be met.
Comment: A couple commenters suggested that the proposal to create
new MS-DRG 173 should be delayed until more data can be collected. The
commenters stated their belief that it is premature to create this new
MS-DRG at this time and that in developing this proposed MS-DRG, CMS
relied on recently implemented ICD-10-PCS data. According to the
commenters, due to the lengthy processes for hospitals to adopt and
accurately implement new coding, and conflicting coding advice for
utilization of the ICD-10-PCS procedure codes for CDT and USAT, the
number of cases is currently insufficient to support development of a
new MS-DRG. The commenters stated that the low volume of cases and
related data selected by CMS for analysis, CDT for the treatment of PE,
cannot adequately compare to the costs, complexity, and utilization of
USAT with a high confidence interval.
Response: We appreciate the commenters' feedback. We disagree with
the commenters that it is premature to propose the creation of new MS-
DRG 173 based on our review and claims data analysis as discussed in
the proposed rule. In response to the commenters' statement that CMS
relied on recently implemented ICD-10-PCS data, it is not clear to us
what specific ICD-10-PCS data the commenters are referring to since a
specific list was not provided, however, we believe the commenters may
be suggesting the codes for USAT that were finalized October 1, 2020
(FY 2021), and listed previously in connection with the analysis
discussed in the proposed rule. As discussed in the proposed rule and
prior rulemaking, our goal is always to use the best available data. We
noted in the proposed rule that our initial MS-DRG analysis was based
on ICD-10 claims data from the September 2022 update of the FY 2022
MedPAR file, which contains hospital bills received from October 1,
2021, through September 30, 2022, and where otherwise indicated,
additional analysis was based on ICD-10 claims data from the December
2022 update of the FY 2022 MedPAR file, which contains hospital bills
received by CMS through December 31, 2022, for discharges occurring
from October 1, 2021, through September 30, 2022. Therefore, we believe
our analysis of claims data in consideration of the MS-DRG request to
reassign cases reporting USAT procedures for PE is consistent with our
standard process, regardless of the effective date of the coded claims
data. We also do not agree with the commenters' assertion that it is a
lengthy process for hospitals to adopt and accurately implement new
coding. We note that procedure code proposals discussed at the
September ICD-10 Coordination and Maintenance Committee meeting and
subsequently finalized are typically included in Table 6B.--New
Procedure Codes in association with the proposed rule that is made
publicly available on the CMS website at: https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/AcuteInpatientPPS. This table (Table
6B) lists the new procedure codes that have been approved to date that
will be effective with discharges on and after October 1 of the
upcoming fiscal year. Therefore, information regarding the finalized
codes from the September meeting is made publicly available
approximately 4-5 months in advance of the implementation date,
affording the ability for users of the code set to gain familiarity
with the updates. In addition, there are extensive industry-sponsored
educational opportunities through various professional associations
that introduce and discuss the annual code updates. For example, the
American Hospital Association (AHA), American Health Information
Management Association (AHIMA), and the American Academy of
Professional Coders (AAPC) generally take lead roles in developing
detailed technical training materials for coders and other users of the
ICD-10 code set. The AHA also includes updates to ICD-10 in its Coding
Clinic[supreg] for ICD-10-CM/ICD-10-PCS publication. Because the codes
describing USAT were finalized for implementation October 1, 2020 (FY
2021), we believe sufficient time has elapsed and that providers are
successfully coding and reporting the procedure as demonstrated in our
claims analysis.
It is also not clear what conflicting coding advice for utilization
of the ICD-10-PCS procedure codes for CDT and USAT the commenters are
referring to since the commenters did not provide examples or
supplemental information for what they believed to be conflicting
advice to enable further evaluation.
Comment: A few commenters expressed concern that the inclusion of
both conventional CDT, also known as ``standard infusion catheters,''
and USAT in the proposed new MS-DRG disregards fundamental clinical
differences between the procedures. According to the commenters, CDT
generally relies on a multi-sidehole infusion catheter placed adjacent
to the thrombus through which thrombolytics are delivered, typically
over the course of 24 hours with the catheter in-dwelling, whereas USAT
employs ultrasound to assist in thrombolysis, and the pulses of
ultrasonic energy temporarily make the fibrin in the thrombus more
porous and increase fluid flow within the thrombus. The commenters
stated standard CDT is the simple infusion of liquids into the vessel
and should not map to the same root operation fragmentation codes as
does USAT. The commenters also stated CDT procedures are generally less
complex clinically and consume significantly lower level of hospital
resources as a result. The commenters recommended CMS should delay
implementation, not finalize the proposed MS-DRG at this time and
reconsider at a later date when utilization volumes reach a threshold
of significance.
A commenter also indicated that an analysis of cost data was being
submitted to CMS to demonstrate that USAT PE cases have total costs
that are more than three times the cost of CDT procedures for the
sickest patients.
Response: We disagree with the commenters that inclusion of both
conventional CDT and USAT in the proposed new MS-DRG disregards
fundamental clinical differences between the procedures. We note that
while USAT procedures performed utilizing the EKOSTM device
employ ultrasound, the objective of both CDT and USAT procedures is to
effectuate thrombolysis and reduce clot burden. In response to the
commenters' statement that standard CDT is the simple infusion
[[Page 58678]]
of liquids into the vessel and should not map to the same root
operation fragmentation codes as does USAT, we note that under ICD-10-
PCS, both USAT and CDT are reported with the root operation
fragmentation, defined as breaking solid matter in a body part into
pieces. The procedure may be accomplished by physical force (e.g.,
manual, ultrasonic) applied directly or indirectly that is used to
break the solid matter into pieces. The solid matter may be an abnormal
byproduct of a biological function or a foreign body. The pieces of
solid matter are not taken out. With respect to the commenters'
statement that CDT procedures are generally less complex clinically and
consume significantly lower level of hospital resources, we note that
any procedure that places a catheter inside a blood vessel carries
certain risks, including damage to the blood vessel, bruising or
bleeding at the puncture site, and infection. In the treatment of a
significant pulmonary embolism, both procedures (USAT and CDT) require
a right heart catheterization by either an interventional cardiologist
or an interventional radiologist, utilizing the same level of facility
resources. In response to the commenters' recommendation that CMS
should delay finalization for the proposed MS-DRG and reconsider in the
future when utilization volumes reach a threshold of significance, as
discussed in the proposed rule, once the decision was made to propose a
new base MS-DRG, we applied the criteria to create subgroups and the
criteria for both a three-way split and for a two-way split failed,
however, we believe the simulated volume of 1,534 cases is sufficient
for creation of the proposed new MS-DRG for these procedures.
Finally, in response to the cost data that was submitted by a
commenter, we note that it was the same data analysis as reflected and
discussed in the proposed rule, and therefore we refer readers to that
prior discussion.
Comment: A commenter stated they agreed that fragmentation
procedures with or without USAT do not belong in the requested MS-DRGs
163, 164, and 165, and suggested they remain in their current MS-DRGs
166, 167, and 168 based on clinical coherence and resource utilization.
Response: We appreciate the commenter's feedback and agree that
fragmentation procedures with or without USAT do not belong in the
requested MS-DRGs 163, 164, and 165. However, for reasons discussed in
the proposed rule, we believe our review of these procedures and data
analysis findings support the proposal to create new MS-DRG 173 for
grouping cases reporting the performance of USAT or CDT with a
principal diagnosis of pulmonary embolism.
Comment: A couple commenters disagreed with the proposal to create
new MS-DRG 173. A commenter stated USAT procedures have been receiving
appropriate payment since FY 2021 and the proposed new MS-DRG would
create unnecessary administrative burden for established procedure
codes that already have appropriate payment. Another commenter stated
that fragmentation procedures, with or without ultrasonic assistance to
break up blood clots, should stay assigned to the current MS-DRGs 166,
167, and 168 respectively. The commenter stated that the costs and
resources for these procedures are consistent with current payment
levels when compared to the rest of the procedures assigned to the
current MS-DRGs, that the change is not needed or necessary, and that
over time may result in overall reduced payment, given that such a low
number of procedures would be assigned to their own MS-DRGs.
Response: We appreciate the commenters' feedback, however, based on
our review of the procedures and claims data analysis as discussed in
the proposed rule, we believe that USAT and CDT procedures performed
for PE are clinically distinct and utilize a different pattern of
resources than the other procedures in MS-DRGs 166, 167, and 168. We
stated in the proposed rule that while we did not agree with the
request to reassign cases reporting USAT or CDT for PE from MS-DRGs
166, 167, and 168 to MS-DRGs 163, 164, and 165, we believed the
findings from our analysis warranted proposed reassignment of these
cases. While we described the findings from our review of the
procedures currently assigned to MS-DRGs 163, 164, and 165 to
specifically address the MS-DRG request (88 FR 26689), we note that in
our review of cases assigned to MS-DRGs 166, 167, and 168, we
identified similar findings; the majority of procedures reported are
for malignant neoplasms of the trachea, bronchus, and lung, as well as
for pneumonia and respiratory failure with either an open or
percutaneous endoscopic approach in contrast to the USAT endovascular
(percutaneous) procedure performed on the pulmonary trunk, arteries or
veins. In addition, the majority of procedures in MS-DRGs 166, 167, and
168 are performed on patients who are not clinically similar to
patients who undergo USAT or CDT for PE since they describe procedures
such as destruction (ablation) or excision performed for patients with
conditions other than a PE, such as malignant neoplasm, pneumonia, or
pulmonary fibrosis. Lastly, a number of procedures in these MS-DRGs
also involve the use of a permanently implanted device while the
procedures utilizing USAT or CDT do not.
As we have also stated in prior rulemaking (86 FR 44808), the
``other'' surgical category contains surgical procedures which, while
infrequent, could still reasonably be expected to be performed for a
patient in the particular MDC. We note that because MS-DRGs 166, 167,
and 168 are classified as an ``other'' surgical category, they are not
as precisely defined from a clinical perspective and contain surgical
procedures that are not based on any particular organizing principle
(e.g. anatomy, surgical approach, diagnostic approach, pathology,
etiology, or treatment process). However, we also note that the
classification of patient cases into the MS-DRGs is a constantly
evolving process, therefore, as coding, medical technologies or
treatments change and more comprehensive data is collected, the MS-DRG
definitions are reviewed, and revisions are proposed. As discussed in
the FY 2022 IPPS/LTCH PPS final rule (86 FR 44820), we stated we
believed further analysis of the procedures assigned to MS-DRGs 163,
164, 165, 166, 167, and 168 was warranted based on the creation of new
procedure codes that have been assigned to these MS-DRGs in recent
years for which claims data were not yet available and the need for
additional time to examine the procedures currently assigned to those
MS-DRGs by clinical intensity, complexity of service and resource
utilization. We stated we would continue to evaluate the procedures
assigned to these MS-DRGs as additional claims data became available.
We also do not agree that the proposed new MS-DRG would create an
unnecessary administrative burden for the established procedure codes
since providers are accustomed to proposed and finalized changes to the
MS-DRG classifications each fiscal year and software vendors
incorporate the finalized changes into their products. With respect to
the commenter's assertion that a low volume of procedures would be
assigned to their own MS-DRG based on the proposal, as previously
discussed, once the decision was made to propose a new base MS-DRG, we
applied the criteria to create subgroups and the criteria for both a
three-way split and for a two-way split failed, however, we believe the
simulated volume of 1,534 cases is
[[Page 58679]]
sufficient for creation of the proposed new MS-DRG.
Comment: A commenter stated they could not fully understand or
evaluate CMS' proposal for proposed new MS-DRG 173 or determine how the
data presented in the preamble of the proposed rule related to the
proposed reassignment of cases because of inconsistencies in the
materials supporting the proposed rule. According to the commenter, CMS
referred to one set of ICD-10-PCS codes in the proposed rule and cited
a different set of ICD-10-PCS codes mapping to proposed MS-DRG 173 in
the proposed ICD-10 MS-DRG V41 Definitions Manual. The commenter stated
interested parties are unable to evaluate and comment on proposals
complicated by such an important inconsistency.
Response: We appreciate the commenter's feedback, however, it is
not clear what inconsistencies in the materials the commenter is
specifically referring to since the commenter did not provide a list of
codes for evaluation. Upon review of the proposed rule and the proposed
ICD-10 MS-DRG V41 Definitions Manual, we did not find discrepancies.
After consideration of the public comments we received, we are
finalizing our proposal to create new MS-DRG 173 (Ultrasound
Accelerated and Other Thrombolysis with Principal Diagnosis Pulmonary
Embolism), without modification, for FY 2024. We are also finalizing
our proposal to define the logic for the new MS-DRG using the
previously listed diagnosis codes for PE and the previously listed
procedure codes for USAT and CDT, as identified and discussed in our
analysis of the claims data in association with the proposed rule. We
will continue to monitor the claims data for this new MS-DRG after
implementation to determine if additional refinements are warranted.
b. Respiratory Infections and Inflammations Logic
In the FY 2024 IPPS/LTCH PPS proposed rule (88 FR 26691), we stated
that the logic for case assignment to MS-DRGs 177, 178, and 179
(Respiratory Infections and Inflammations with MCC, with CC, and
without CC/MCC, respectively) as displayed in the ICD-10 MS-DRG V40.1
Definitions Manual (which is available on the CMS website at: https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/AcuteInpatientPPS/MS-DRG-Classifications-and-Software) is comprised of
two logic lists. The first logic list is entitled ``Principal Diagnosis
with Secondary Diagnosis'' and is defined by a list of five ICD-10-CM
diagnosis codes describing influenza due to other or unidentified
influenza virus with pneumonia in combination with a separate list of
ten diagnosis codes describing the specific pneumonia infection. When
any one of the five listed diagnosis codes from the ``Principal
Diagnosis'' logic list is reported as a principal diagnosis in
combination with any one of the ten listed diagnosis code from the
``with Secondary Diagnosis'' logic list as a secondary diagnosis, the
case results in assignment to MS-DRG 177, 178, or 179 depending on the
presence of any additional MCC or CC secondary diagnoses. All 15 of the
diagnosis codes included on the first logic list ``Principal Diagnosis
with Secondary Diagnosis'' are designated as MCCs.
The second logic list is entitled ``or Principal Diagnosis'' and is
defined by a list of 57 diagnosis codes describing various pulmonary
infections. When any one of the 57 diagnosis codes from this list is
reported as a principal diagnosis, the case results in assignment to
MS-DRG 177, 178, or 179 depending on the presence of any additional MCC
or CC secondary diagnoses.
We noted in the proposed rule that currently, when a diagnosis code
from the second logic list ``or Principal Diagnosis'' is reported as
the principal diagnosis and a diagnosis code from the first logic list
``Principal Diagnosis with Secondary Diagnosis'' is reported as a
secondary diagnosis, the case is grouping to MS-DRG 177 (Respiratory
Infections and Inflammations with MCC). Consistent with how other
similar logic lists function in the ICD-10 Grouper software for case
assignment to the ``with MCC'' MS-DRG, the logic for case assignment to
MS-DRG 177 is intended to require any other diagnosis designated as an
MCC and reported as a secondary diagnosis for appropriate assignment,
and not the diagnoses currently listed in the logic for the definition
of the MS-DRG.
Therefore, for FY 2024, we proposed to correct the logic for case
assignment to MS-DRG 177 by excluding the 15 diagnosis codes from the
first logic list ``Principal Diagnosis with Secondary Diagnosis'' from
acting as an MCC when any one of the listed codes is reported as a
secondary diagnosis with a diagnosis code from the second logic list
``or Principal Diagnosis'' reported as the principal diagnosis.
Comment: Several commenters expressed support for the proposal to
correct the logic for case assignment to MS-DRG 177. However, some
commenters stated it was not specifically clear what was changing and
requested that CMS provide more transparency with examples.
A couple commenters recommended that when any one of the five
influenza codes (J10.00, J10.01, J10.08, J11.00, or J11.08) from the
first logic list entitled ``Principal Diagnosis'' in MS-DRGs 177, 178,
and 179 is reported as a secondary diagnosis with a principal diagnosis
from the second logic list (``or Principal Diagnosis''), that the
influenza diagnosis code continue to be allowed to act as an MCC for
assignment to MS-DRG 177. According to the commenters, influenza is not
inherently related to the principal diagnoses on the second logic list,
and, in combination, they have the potential to be more complicated and
resource intensive to treat than any of the diagnoses occurring alone.
The commenters supported excluding the 10 secondary diagnoses from the
first logic list entitled ``with Secondary Diagnosis'' from acting as
an MCC when any one of the codes is reported as a secondary diagnosis
with a principal diagnosis code from the second logic list.
Response: We thank the commenters for their support. In response to
the commenters who requested additional clarification for the proposed
changes, we are providing the following case example to demonstrate the
intent of the proposed logic changes with application of the V41 ICD-10
MS-DRG test GROUPER that was made publicly available in association
with the proposed rule at https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/AcuteInpatientPPS/MS-DRG-Classifications-and-Software.
Case Example: A patient who is admitted with COVID-19 develops
influenza due to an unidentified flu virus along with an unspecified
type of pneumonia. The principal diagnosis in this case is reported as
the COVID-19 (diagnosis code U07.1) and the secondary diagnosis in this
case is reported as influenza due to an unidentified flu virus with
unspecified type of pneumonia (diagnosis code J11.00). The diagnosis
code for COVID-19 (U07.1) is listed as one of the 58 diagnoses in the
second logic list entitled ``or Principal Diagnosis'' and the diagnosis
code for influenza due to an unidentified flu virus with unspecified
type of pneumonia (J11.00) is listed as one of the five diagnoses in
the first logic list entitled ``Principal Diagnosis''. When these
diagnoses are entered in the V41 ICD-10 MS-DRG test GROUPER, the
resulting MS-DRG is 177 (Respiratory infections and inflammations with
MCC).
[[Page 58680]]
Principal Diagnosis: U07.1 COVID-19 (DRG)
Secondary Diagnoses: J11.00 Flu due to unidentified flu virus w unsp
type of pneumonia (MCC)
Additionally, when any one of the other four influenza diagnosis
codes (J10.00, J10.01, J10.08, or J11.08) in that first logic list is
reported as a secondary diagnosis with a principal diagnosis of U07.1,
the resulting MS-DRG is also MS-DRG 177. Therefore, we agree with the
commenters that the five influenza codes (J10.00, J10.01, J10.08,
J11.00, or J11.08) should continue to be allowed to act as a MCC with a
principal diagnosis from the second logic list in specific clinical
scenarios.
The following tables illustrate additional examples when the
reporting of any one of the five influenza codes (J10.00, J10.01,
J10.08, J11.00, or J11.08) from the first logic list entitled
``Principal Diagnosis'' in MS-DRGs 177, 178, and 179 continues to act
as an MCC when reported as a secondary diagnosis with certain principal
diagnoses from the second logic list (``or Principal Diagnosis'') and
to illustrate when any one of the five influenza diagnosis codes is
excluded from acting as an MCC when reported as a secondary diagnosis
with certain principal diagnoses from the second logic list.
BILLING CODE 4120-01-P
[GRAPHIC] [TIFF OMITTED] TR28AU23.029
[GRAPHIC] [TIFF OMITTED] TR28AU23.030
We note that in the preamble of the proposed rule we stated that we
were proposing to exclude the 15 diagnosis codes from the first logic
list ``Principal Diagnosis with Secondary Diagnosis'' from acting as an
MCC when any one of the listed codes is reported as a secondary
diagnosis with a diagnosis code from the second logic list ``or
Principal Diagnosis'' reported as the principal diagnosis, however, the
proposal was intended to exclude the 11 secondary diagnoses from the
first logic list entitled ``with Secondary Diagnosis'' when one of the
codes is reported as a secondary diagnosis with a principal diagnosis
code from the second logic list, (as reflected in the case example when
a diagnosis from each logic list is entered in the V41 ICD-10 MS-DRG
test GROUPER).
After consideration of the public comments we received, we are
finalizing our proposal to correct the logic for case assignment to MS-
DRG 177, with modification, for FY 2024. We are finalizing the
exclusion of the following 11 diagnosis codes listed in the first logic
list entitled ``with Secondary Diagnosis'' from acting as an MCC when
any one of the listed codes is reported as a secondary diagnosis with a
diagnosis code from the second logic list entitled ``or Principal
Diagnosis'' when reported as the principal diagnosis.
[[Page 58681]]
[GRAPHIC] [TIFF OMITTED] TR28AU23.031
BILLING CODE 4120-01-C
5. MDC 05 (Diseases and Disorders of the Circulatory System)
a. Surgical Ablation
In the FY 2022 IPPS/LTCH PPS final rule (86 FR 44836 through
44848), we discussed a two-part request we received to review the MS-
DRG assignments for cases involving the surgical ablation procedure for
atrial fibrillation. The first part of the request was to create a new
classification of surgical ablation MS-DRGs to better accommodate the
costs of open concomitant surgical ablations. The second part of the
request was to reassign cases describing standalone percutaneous
endoscopic surgical ablation. In the part of the request relating to
the costs of open concomitant surgical ablations, the requestor
identified the following potential procedure combinations that would
comprise an ``open concomitant surgical ablation'' procedure.
Open CABG + open surgical ablation
Open MVR + open surgical ablation
Open AVR + open surgical ablation
Open MVR + open AVR + open surgical ablation
Open MVR + open CABG + open surgical ablation
Open MVR + open AVR + open CABG + open surgical ablation
Open AVR + open CABG + open surgical ablation
As discussed in the FY 2022 IPPS/LTCH PPS final rule, we examined
claims data from the March 2020 update of the FY 2019 MedPAR file and
the September 2020 update of the FY 2020 MedPAR file for cases
reporting procedure code combinations describing open concomitant
surgical ablations. We refer the reader to Table 6P.1o associated with
the FY 2022 final rule (which is available on the CMS website at:
https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/AcuteInpatientPPS) for data analysis findings of cases reporting
procedure code combinations describing open concomitant surgical
ablations. We stated our analysis showed while the average lengths of
stay and average costs of cases reporting procedure code combinations
describing open concomitant surgical ablations are higher than all
cases in their respective MS-DRG, we found variation in the volume,
length of stay, and average costs of the cases. We also stated findings
from our analysis indicated that MS-DRGs 216, 217, and 218 (Cardiac
Valve and Other Major Cardiothoracic Procedures with Cardiac
Catheterization with MCC, with CC, and without CC/MCC, respectively) as
well as approximately 31 other MS-DRGs would be subject to change based
on the three-way severity level split criterion finalized in FY 2021.
In the FY 2022 final rule, we finalized our proposal to revise the
surgical hierarchy for the MS-DRGs in MDC 05 (Diseases and Disorders of
the Circulatory System) to sequence MS-DRGs 231-236 (Coronary Bypass,
with or without PTCA, with or without Cardiac Catheterization or Open
Ablation, with and without MCC, respectively) above MS-DRGs 228 and 229
(Other Cardiothoracic Procedures with and without MCC, respectively),
effective October 1, 2021. In addition, we also finalized the
assignment of cases with a procedure code describing coronary bypass
and a procedure code describing open ablation to MS-DRGs 233 and 234
and changed the titles of these MS-DRGs to ``Coronary Bypass with
Cardiac Catheterization or Open Ablation with and without MCC,
respectively'' to reflect this reassignment for FY 2022.
In the FY 2023 IPPS/LTCH PPS final rule (87 FR 48845 through
48849), we discussed a request we received to again review the MS-DRG
assignment of cases involving open concomitant surgical ablation
procedures. The requestor stated they continue to believe that the
average hospital costs for surgical ablation for atrial fibrillation
demonstrates a cost disparity compared to all procedures within their
respective MS-DRGs. The requestor suggested that when open surgical
ablation is performed with MVR, or AVR or MVR/AVR + CABG that these
procedures are either (1) assigned to a different family of MS-DRGs or
(2) assigned to MS-DRGs 216 and 217 (Cardiac Valve and Other Major
Cardiothoracic Procedures with Cardiac Catheterization with MCC and
with CC, respectively) similar to what CMS did with CABG and open
ablation procedures in the FY 2022 rulemaking to better accommodate the
added cost of open concomitant surgical ablation.
We stated our analysis using the September 2021 update of the FY
2021 MedPAR file reflected that the cases reporting an open concomitant
surgical ablation code combination are predominately found in the
higher (CC or MCC) severity level MS-DRGs of their current base MS-DRG
assignment, suggesting that the patient's co-morbid conditions may also
be contributing to the higher costs of these cases. Secondly, for the
numerous procedure combinations that would comprise an ``open
concomitant surgical ablation'' procedure, the increase in average
costs appeared to directly correlate with the number of procedures
performed. For example, cases that describe ``Open MVR + Open surgical
ablation'' generally demonstrated costs that were lower than cases that
describe ``Open MVR + Open AVR + Open CABG + Open surgical ablation.''
We also noted using the September 2021 update of the FY 2021 MedPAR
file, we analyzed how applying the NonCC subgroup criteria to all MS-
DRGs currently split into three severity levels would affect the MS-DRG
structure beginning in FY 2022. Similar to our findings discussed in
the FY 2022 IPPS/LTCH final rule, findings
[[Page 58682]]
from our analysis using the September 2021 update of the FY 2021 MedPAR
file indicated that MS-DRGs 216, 217, 218 as well as approximately 40
other MS-DRGs would be subject to change based on the three-way
severity level split criterion finalized in FY 2021.
Therefore, we stated we believe that additional time was needed to
allow for further analysis of the claims data to determine to what
extent the patient's co-morbid conditions are also contributing to
higher costs and to identify other contributing factors that might
exist with respect to the increased length of stay and costs of these
cases in these MS-DRGs. For the reasons summarized, and after
consideration of the public comments we received, we did not make any
MS-DRG changes for cases involving the open concomitant surgical
ablation procedures for FY 2023.
As discussed in the FY 2024 IPPS/LTCH PPS proposed rule (88 FR
26691 through 26695), we again received a request to review the MS-DRG
assignment of cases involving open concomitant surgical ablation
procedures. The requestor recommended that CMS reassign open
concomitant surgical ablation procedures for atrial fibrillation (AF)
from MS-DRGs 219, 220, and 221 (Cardiac Valve and Other Major
Cardiothoracic Procedures without Cardiac Catheterization with MCC,
with CC, and without CC/MCC, respectively) to MS-DRGs 216, 217, and
218. The requestor further recommended that if CMS does not reassign
cases involving open concomitant surgical ablation procedures to MS-
DRGs 216, 217, and 218, in the alternative, CMS should create new MS-
DRGs for all open mitral or aortic valve repair or replacement
procedures with concomitant surgical ablation for AF to improve
clinical coherence when three to four open heart procedures are
performed in one setting.
The requestor suggested that the following three MS-DRGs be created
to reflect current standard of care for these patients:
Suggested New MS-DRG XXX--2 procedures;
Suggested New MS-DRG XXX--3 procedures; and
Suggested New MS-DRG XXX--4+ procedures.
The requestor stated that cases reporting open surgical ablation
procedures for AF performed during open valve repair/replacement
procedures are typically assigned to MS-DRGs 216, 217, 218, 219, 220,
and 221, with the majority of the cases being assigned to MS-DRGs 219,
220 and 221 because of the surgical hierarchy in MDC 05 and because
there is less of a need for cardiac catheterization in these cases. We
stated in the proposed rule that the requestor performed its own data
analysis, and stated their analysis showed that the data continues to
demonstrate that claims with open surgical ablation procedures for AF
are not clinically similar to the remaining cases in MS-DRGs 219, 220,
and 221, and there are significant differences in resource utilization
that reflect those clinical differences.
To explore mechanisms to address this request, we stated in the
proposed rule we began our analysis by examining claims data from the
September 2022 update of the FY 2022 MedPAR file for cases reporting
procedure code combinations describing open concomitant surgical
ablations assigned to MS-DRGs 216, 217, 218, 219, 220, and 221. We
referred readers to Tables 6P.3a and 6P.3b associated with the proposed
rule (which are available on the CMS website at: https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/AcuteInpatientPPS) for the
data analysis of cases reporting procedure code combinations describing
open concomitant surgical ablations in the September 2022 update of the
FY 2022 MedPAR file. Table 6P.3a associated with the proposed rule sets
forth the list of ICD-10-PCS procedure codes reflecting mitral valve
repair or replacement (MVR), aortic valve repair or replacement (AVR),
coronary artery bypass grafting (CABG) and surgical ablation procedures
that we examined in this analysis. Table 6P.3b associated with the
proposed rule shows the data analysis findings of cases reporting
procedure code combinations describing open concomitant surgical
ablations assigned to MS-DRGs 216, 217, 218, 219, 220, and 221 from the
September 2022 update of the FY 2022 MedPAR file.
As shown in Table 6P.3b associated with the proposed rule, while
the average lengths of stay and average costs of cases reporting
procedure code combinations describing open concomitant surgical
ablations are higher than all cases in their respective MS-DRG, we
found there is variation in the volume, length of stay, and average
costs of the cases. For MS-DRG 216, we found 439 cases reporting
procedure code combinations describing open concomitant surgical
ablations with the average length of stay ranging from 16.7 days to
20.3 days and average costs ranging from $78,586 to $111,439 for these
cases. For MS-DRG 217, we found 92 cases reporting procedure code
combinations describing open concomitant surgical ablations with the
average length of stay ranging from 8.5 days to 14 days and average
costs ranging from $43,221 to $98,001 for these cases. For MS-DRG 218,
we found 2 cases reporting procedure code combinations describing open
concomitant surgical ablations with the average length of stay of 6.5
days and average cost of $38,519 for these cases. For MS-DRG 219, we
found 1,136 cases reporting procedure code combinations describing open
concomitant surgical ablations with the average length of stay ranging
from 9.5 days to 13.6 days and average costs ranging from $60,495 to
$94,572 for these cases. For MS-DRG 220, we found 770 cases reporting
procedure code combinations describing open concomitant surgical
ablations with the average length of stay ranging from 6.7 days to 9.6
days and average costs ranging from $49,900 to $84,293 for these cases.
For MS-DRG 221, we found 38 cases reporting procedure code combinations
describing open concomitant surgical ablations with the average length
of stay ranging from 4.5 days to 5.8 days and average costs ranging
from $30,725 to $59,024 for these cases.
We stated in the proposed rule that similar to our analysis of the
data as discussed in the FY 2023 IPPS/LTCH PPS final rule, this data
analysis also shows for the numerous procedure combinations that would
comprise an ``open concomitant surgical ablation'' procedure, the
increase in average costs appears to directly correlate with the number
of procedures performed. We stated the data analysis reflects that
cases that describe ``Open MVR + Open AVR'' in addition to other
concomitant procedures generally demonstrate higher average costs in
their respective MS-DRGs. In MS-DRG 216, we identified a total of 439
cases reporting procedure code combinations describing open concomitant
surgical ablations with an average length of stay of 17.7 days and
average costs of $89,877. Of those 439 cases, there were 40 cases
reporting an aortic valve repair/replacement procedure, a mitral valve
repair/replacement procedure, and another concomitant procedure with
average costs of $106,301 and an average length of stay of 17.9 days.
In MS-DRG 217, we identified a total of 92 cases reporting procedure
code combinations describing open concomitant surgical ablations with
an average length of stay of 10 days and average costs of $60,975. Of
those 92 cases, there were 9 cases reporting an aortic valve repair/
replacement procedure, a mitral valve repair/
[[Page 58683]]
replacement procedure, and another concomitant procedure with average
costs of $82,514 and an average length of stay of 12.5 days. In MS-DRG
219, we identified a total of 1,136 cases reporting procedure code
combinations describing open concomitant surgical ablations with an
average length of stay of 11.2 days and average costs of $70,693. Of
those 1,136 cases, there were 102 cases reporting an aortic valve
repair/replacement procedure, a mitral valve repair/replacement
procedure, and another concomitant procedure with average costs of
$85,537 and an average length of stay of 12.8 days. In MS-DRG 220, we
identified a total of 770 cases reporting procedure code combinations
describing open concomitant surgical ablations with an average length
of stay of 7.3 days and average costs of $52,456. Of those 770 cases,
there were 48 cases reporting an aortic valve repair/replacement
procedure, a mitral valve repair/replacement procedure, and another
concomitant procedure with average costs of $67,344 and an average
length of stay of 8.4 days. For MS-DRG 218 and MS-DRG 221, we did not
identify any cases reporting procedure code combinations describing
open concomitant surgical ablations with an aortic valve repair/
replacement procedure, a mitral valve repair/replacement procedure, and
another concomitant procedure.
In examining this request, we noted in the proposed rule that the
requestor suggested that CMS reassign open concomitant surgical
ablation procedures for atrial fibrillation (AF) from MS-DRGs 219, 220,
and 221 (Cardiac Valve and Other Major Cardiothoracic Procedures
without Cardiac Catheterization with MCC, with CC, and without CC/MCC,
respectively) to MS-DRGs 216, 217 and 218 for FY 2024, however, as
discussed in the FY 2023 IPPS/LTCH PPS final rule, MS-DRGs 216, 217 and
218 are defined by the performance of cardiac catheterization. We
stated we continue to be concerned about the effect on clinical
coherence of assigning cases reporting procedure code combinations
describing open concomitant surgical ablations that do not also have a
cardiac catheterization procedure reported to MS-DRGs that are defined
by the performance of that procedure. We also noted, as discussed in
section II.C.1.b of the proposed rule, using the December 2022 update
of the FY 2022 MedPAR file, we analyzed how applying the NonCC subgroup
criteria to all MS-DRGs currently split into three severity levels
would affect the MS-DRG structure beginning in FY 2024. Similar to our
findings discussed in the FY 2022 and FY 2023 IPPS/LTCH PPS final
rules, findings from our analysis indicate that MS-DRGs 216, 217, 218
as well as approximately 44 other base MS-DRGs would be subject to
change based on the three-way severity level split criterion finalized
in FY 2021. Specifically, we noted that the total number of cases in
MS-DRG 218 is again below 500. We refer the reader to Table 6P.10b
associated with the proposed rule (which is available on the CMS
website at: https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/AcuteInpatientPPS) for the list of the 135 MS-DRGs that would
potentially be subject to deletion and the list of the 86 new MS-DRGs
that would potentially be created under this policy if the NonCC
subgroup criteria was applied.
As discussed in the proposed rule, to further analyze the claims
data to determine to what extent the performance of multiple procedures
is contributing to higher costs and to identify other contributing
factors that might exist with respect to the increased length of stay
and costs of these cases in these MS-DRGs, we analyzed the cases
reporting a concomitant procedure code combination without reporting a
procedure code describing open surgical ablation assigned to MS-DRGs
216, 217, 218, 219, 220, and 221. We refer readers to Tables 6P.3c
associated with the proposed rule (which are available on the CMS
website at: https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/AcuteInpatientPPS) for the data analysis of cases reporting a
concomitant procedure code combination without reporting a procedure
code describing open surgical ablation assigned to MS-DRGs 216, 217,
218, 219, 220, and 221 from the September 2022 update of the FY 2022
MedPAR file.
We stated that the data analysis as shown in Table 6P.3c associated
with the proposed rule, similarly, reflects that cases that report
``Open MVR + Open AVR'' in addition to other concomitant procedures
generally demonstrate higher average costs in their respective MS-DRGs,
even in instances where an open surgical ablation was not reported. In
MS-DRG 216, we identified a total of 2,759 cases reporting a
concomitant procedure code combination without reporting a procedure
code describing open surgical ablation with an average length of stay
of 17.5 days and average costs of $89,334. Of those 2,759 cases, there
were 240 cases reporting an aortic valve repair/replacement procedure,
a mitral valve repair/replacement procedure, and another concomitant
procedure with average costs of $116,611 and an average length of stay
of 22.7 days. In MS-DRG 217, we identified a total of 852 cases
reporting a concomitant procedure code combination without reporting a
procedure code describing open surgical ablation with an average length
of stay of 10.7 days and average costs of $56,208. Of those 852 cases,
there were 31 cases reporting an aortic valve repair/replacement
procedure, a mitral valve repair/replacement procedure, and another
concomitant procedure with average costs of $70,831 and an average
length of stay of 12.6 days. In MS-DRG 218, we identified a total of 64
cases reporting a concomitant procedure code combination without
reporting a procedure code describing open surgical ablation with an
average length of stay of 6.5 days and average costs of $39,924, none
of which reported an aortic valve repair/replacement procedure, a
mitral valve repair/replacement procedure, and another concomitant
procedure. In MS-DRG 219, we identified a total of 7,604 cases
reporting a concomitant procedure code combination without reporting a
procedure code describing open surgical ablation with an average length
of stay of 11.1 days and average costs of $66,412. Of those 7,604
cases, there were 579 cases reporting an aortic valve repair/
replacement procedure, a mitral valve repair/replacement procedure, and
another concomitant procedure with average costs of $85,890 and an
average length of stay of 13.7 days. In MS-DRG 220, we identified a
total of 6,430 cases reporting a concomitant procedure code combination
without reporting a procedure code describing open surgical ablation
with an average length of stay of 6.5 days and average costs of
$45,472. Of those 6,430 cases, there were 260 cases reporting an aortic
valve repair/replacement procedure, a mitral valve repair/replacement
procedure, and another concomitant procedure with average costs of
$63,761 and an average length of stay of 7.8 days. In MS-DRG 221, we
identified a total of 666 cases reporting a concomitant procedure code
combination without reporting a procedure code describing open surgical
ablation with an average length of stay of 5.0 days and average costs
of $39,777. Of those 666 cases, there were 9 cases reporting an aortic
valve repair/replacement procedure, a mitral valve repair/replacement
procedure, and another concomitant procedure with average costs of
$38,156 and an average length of stay of 5.6 days.
[[Page 58684]]
We noted in the proposed rule that analysis of the claims data
suggested that it is the performance of an aortic valve repair or
replacement procedure, a mitral valve repair or replacement procedure
plus another concomitant procedure that is associated with increased
hospital resource utilization, not solely the performance of open
surgical ablation as suggested by the requestor, when compared to other
cases in their respective MS-DRGs. We stated we reviewed these data and
noted, clinically, the management of mixed valve disease is challenging
because patients with mixed valve disease are often frail, elderly, and
present with multiple comorbidities. The combination of conditions in
mixed valve disease, such as aortic stenosis and mitral stenosis, can
result in a greater reduction of cardiac output than in isolated
valvular stenosis. Patients requiring an aortic valve procedure and a
mitral valve procedure in the same operative session are more complex
cases and can be at significant risk for adverse events if there is
moderate or severe disease of one or more cardiac valves. In the
proposed rule, we stated that the data analysis clearly showed that
cases reporting aortic valve repair or replacement procedure, a mitral
valve repair or replacement procedure and another concomitant procedure
have higher average costs and generally longer lengths of stay compared
to all the cases in their assigned MS-DRG. For these reasons, we
proposed to create a new MS-DRG for cases reporting an aortic valve
repair or replacement procedure, a mitral valve repair or replacement
procedure, and another concomitant procedure.
As discussed in the proposed rule, to compare and analyze the
impact of our suggested modifications, we ran a simulation using the
most recent claims data from the December 2022 update of the FY 2022
MedPAR file. The following table illustrates our findings for all 892
cases reporting procedure codes describing an aortic valve repair or
replacement procedure, a mitral valve repair or replacement procedure,
and another concomitant procedure. We stated we believed that the
resulting proposed MS-DRG assignment is more clinically homogeneous,
coherent and better reflects hospital resource use.
[GRAPHIC] [TIFF OMITTED] TR28AU23.032
We applied the criteria to create subgroups in a base MS-DRG as
discussed in section II.C.1.b. of the FY 2024 IPPS/LTCH PPS proposed
rule. As shown in the table that follows, a three-way split of the
proposed new MS-DRG failed to meet the criterion that there be at least
500 or more cases in each subgroup.
[GRAPHIC] [TIFF OMITTED] TR28AU23.033
We then applied the criteria for a two-way split for the ``with CC/
MCC'' and ``without CC/MCC'' subgroups and again found that the
criterion that there be at least 500 or more cases in each subgroup
could also not be met. The following table illustrates our findings.
[GRAPHIC] [TIFF OMITTED] TR28AU23.034
We also applied the criteria for a two-way split for the ``with
MCC'' and ``without MCC'' subgroups and found that the criterion that
there be at least 500 or more cases in each subgroup similarly could
not be met. The following table illustrates our findings.
[GRAPHIC] [TIFF OMITTED] TR28AU23.035
[[Page 58685]]
Therefore, for FY 2024, we did not propose to subdivide the
proposed new MS-DRG for cases reporting procedure codes describing an
aortic valve repair or replacement procedure, a mitral valve repair or
replacement procedure, and another concomitant procedure into severity
levels.
In summary, for FY 2024, taking into consideration that it
clinically requires greater resources to perform an aortic valve repair
or replacement procedure, a mitral valve repair or replacement
procedure, and another concomitant procedure, we proposed to create a
new base MS-DRG for cases reporting an aortic valve repair or
replacement procedure, a mitral valve repair or replacement procedure,
and another concomitant procedure in MDC 05. The proposed new MS-DRG is
proposed new MS-DRG 212 (Concomitant Aortic and Mitral Valve
Procedures). We referred the reader to Table 6P.4a associated with the
proposed rule (which is available on the CMS website at: https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/AcuteInpatientPPS/index for the list of procedure codes we proposed to
define in the logic for the proposed new MS-DRG. We refer the reader to
section II.C.15. of the preamble of this final rule for the discussion
of the surgical hierarchy and the complete list of our proposed
modifications to the surgical hierarchy as well as our finalization of
those proposals.
Comment: Commenters expressed support for the proposal to create
new base MS-DRG 212 (Concomitant Aortic and Mitral Valve Procedures)
for cases reporting an aortic valve repair or replacement procedure, a
mitral valve repair or replacement procedure, and another concomitant
procedure in MDC 05. Many commenters stated finalization of this
proposal would provide the resources necessary to continue offering
these concomitant procedures to Medicare patients with extremely
serious, complicated heart conditions, which avoids a future additional
surgery down the line. Other commenters stated they agreed with CMS
that this proposal would result in more clinically homogenous
assignments that better reflect hospital resources. A commenter stated
they thank CMS for recognizing the importance of adequate payment for
multiple concomitant open valvular procedures. Another commenter stated
that without an MS-DRG reflecting the additional costs of performing
concomitant procedures, hospitals will continue to be incentivized for
multiple admissions for separate cardiac procedures in order to cover
the cost of care.
Response: We appreciate the commenters' support.
Comment: Many commenters stated that the proposal to create MS-DRG
212 is a good first step, but urged CMS go a step further and also
assign cases reporting a single AVR or MVR procedure and another
concomitant procedure in MDC 05 to the proposed new MS-DRG. Commenters
stated that this modification to the proposal would better align with
the clinical literature and the clinical needs of Medicare
beneficiaries by allowing patients to receive lifesaving therapies in
one visit, while not incentivizing hospitals to send patients with AF
home to return for future procedures. Some commenters stated, based on
their analysis, more patients require an open concomitant single AVR or
MVR procedure than multiple open valvular procedures with open surgical
ablation. These commenters stated that new MS-DRG 212 would only apply
to roughly 10 percent of Medicare beneficiaries, while excluding the
majority of Medicare beneficiaries who require open heart valve
procedures in combination with open surgical ablation treatment for AF.
A commenter stated that AF is a complex arrythmia that is present in
more than 40 percent of patients undergoing open single or multiple
valve procedures and stated that these patients have a two to three
times greater risk for hospitalizations and multiple admissions if
their AF goes untreated. Commenters stated that treating atrial
fibrillation during the same surgical session as a single open valve
procedure requires significant device costs, additional operating room
time, and specialized staff. Some commenters expressed concern that
given the added costs of performing multiple procedures at the same
time, hospitals may more likely schedule the patient for separate
procedures even though guidelines of the Society for Thoracic Surgeons
and the Heart Rhythm Society recommend performing surgical ablation for
atrial fibrillation at the time of open-heart procedures when
indicated. These commenters further stated a delay in addressing the
biggest patient segment with single open valve replacement (MVR or AVR)
and other concomitant procedures risks limiting lifesaving access to
therapies for CMS beneficiaries. Many commenters stated the proposal
would be even more impactful for patients if cases reporting single
open valve procedures were included.
Some commenters urged CMS to either (1) assign all cases reporting
a single AVR or MVR procedure and another concomitant procedure for the
treatment of atrial fibrillation to new proposed MS-DRG 212, (2) create
a new MS-DRG for cases reporting a single AVR or MVR procedure for the
treatment of atrial fibrillation, or (3) assign cases reporting a
single AVR or MVR procedure and a concomitant surgical ablation
procedure for the treatment of atrial fibrillation to MS-DRGs 216, 217,
and 218 (Cardiac Valve and Other Major Cardiothoracic Procedures with
Cardiac Catheterization with MCC, with CC, and without CC/MCC,
respectively) and change the title of the MS-DRGs, while maintaining
the relative weight, and then monitor the claims data for two years.
However, other commenters were not supportive of assigning cases
reporting a single AVR or MVR procedure and another concomitant
procedure to the proposed new MS-DRG 212. These commenters noted that
the focus and clinical rationale for CMS' proposal was based on the
complex, multiple valve procedures. Commenters stated that assigning
cases reporting a single AVR or MVR procedure and another concomitant
procedure to new MS-DRG 212 would have a significant negative impact on
the remaining MS-DRGs, notably MS-DRG 216. The commenters recommended
that CMS continue to carefully review the impacts on the relative
weights in these MS-DRGs if CMS finalizes the proposal to move
approximately 900 cases out of MS-DRGs 216, 217, 218, 219, 220, and
221. Another commenter requested that CMS delay implementation of
proposed new MS-DRG 212 for a year to allow interested parties to fully
assess the impact of the proposed changes to MS-DRGs 216, 217, 218,
219, 220, and 221 and to analyze other options to address payment
adequacy more broadly across concomitant procedures, particularly given
that findings from CMS' analysis indicate that MS-DRGs 216, 217, and
218 as well as approximately 44 other base MS-DRGs would be subject to
change based on the NonCC subgroup criteria finalized in FY 2021. This
commenter further stated given the relatively small number of cases
impacted by the newly proposed MS-DRG 212, additional time would give
CMS an opportunity to work with interested parties to consider other
concomitant procedures that have similar clinical and cost coherence as
the procedures currently proposed for MS-DRG 212, such as concomitant
procedures involving the tricuspid and pulmonary valves.
Response: We appreciate the commenters sharing their concerns and
[[Page 58686]]
feedback on this proposal. To examine the recommendation that CMS
expand MS-DRG 212 to allow cases reporting a single aortic valve repair
or replacement procedure or a mitral valve repair or replacement
procedure with an open concomitant surgical ablation to be grouped into
the proposed new MS-DRG, we further analyzed the September 2022 update
of the FY 2022 MedPAR file for cases reporting procedure code
combinations describing a single AVR or MVR procedure and a concomitant
procedure assigned to MS-DRGs 216, 217, 218, 219, 220 and 221. We also
analyzed the September 2022 update of the FY 2022 MedPAR file for cases
reporting procedure code combinations describing a single AVR or MVR
procedure and a concomitant procedure and a diagnosis of AF. We
identified cases reporting AF as a principal or secondary diagnosis
with the following ICD-10-CM codes.
BILLING CODE 4120-01-P
[GRAPHIC] [TIFF OMITTED] TR28AU23.036
[GRAPHIC] [TIFF OMITTED] TR28AU23.037
[[Page 58687]]
[GRAPHIC] [TIFF OMITTED] TR28AU23.038
BILLING CODE 4120-01-C
As shown in the table, in MS-DRG 216, we identified a total of
2,590 cases reporting procedure code combinations describing a single
AVR or MVR procedure and a concomitant procedure with an average length
of stay of 17.1 days and average costs of $87,374. Of those 2,590
cases, there were 1,511 cases reporting procedure code combinations
describing a single AVR or MVR procedure and a concomitant procedure,
with a diagnosis of AF with average costs of $85,840 and an average
length of stay of 17 days. The data analysis performed indicates that
the 1,511 cases in MS-DRG 216 reporting procedure code combinations
describing a single AVR or MVR procedure and a concomitant procedure
with a diagnosis of AF have an average length of stay that is longer
than the average length of stay for all the cases in MS-DRG 216 (17.1
days versus 14.9 days) and slightly higher average costs when compared
to all the cases in MS-DRG 216 ($85,840 versus $84,327).
In MS-DRG 217, we identified a total of 808 cases reporting
procedure code combinations describing a single AVR or MVR procedure
and a concomitant procedure with an average length of stay of 9.4 days
and average costs of $55,593. Of those 808 cases, there were 462 cases
reporting procedure code combinations describing a single AVR or MVR
procedure and a concomitant procedure, with a diagnosis of AF with
average costs of $56,104 and an average length of stay of 9.8 days. The
data analysis performed indicates that the 462 cases in MS-DRG 217
reporting procedure code combinations describing a single
[[Page 58688]]
AVR or MVR procedure and a concomitant procedure with a diagnosis of AF
have an average length of stay that is longer than the average length
of stay for all the cases in MS-DRG 217 (9.8 days versus 7.3 days) and
similar average costs when compared to all the cases in MS-DRG 217
($56,104 versus $56,143).
In MS-DRG 218, we identified a total of 62 cases reporting
procedure code combinations describing a single AVR or MVR procedure
and a concomitant procedure with an average length of stay of 6.6 days
and average costs of $38,013. Of those 62 cases, there were 18 cases
reporting procedure code combinations describing a single AVR or MVR
procedure and a concomitant procedure, with a diagnosis of AF with
average costs of $37,053 and an average length of stay of 6.2 days. The
data analysis performed indicates that the 18 cases in MS-DRG 218
reporting procedure code combinations describing a single AVR or MVR
procedure and a concomitant procedure with a diagnosis of AF have an
average length of stay that is longer than the average length of stay
for all the cases in MS-DRG 218 (6.2 days versus 3.1 days) and lower
average costs when compared to all the cases in MS-DRG 218 ($37,053
versus $50,208).
In MS-DRG 219, we identified a total of 7,400 cases reporting
procedure code combinations describing a single AVR or MVR procedure
and a concomitant procedure with an average length of stay of 10.9 days
and average costs of $65,489. Of those 7,400 cases, there were 4,485
cases reporting procedure code combinations describing a single AVR or
MVR procedure and a concomitant procedure, with a diagnosis of AF with
average costs of $66,912 and an average length of stay of 11.1 days.
The data analysis performed indicates that the 4,485 cases in MS-DRG
219 reporting procedure code combinations describing a single AVR or
MVR procedure and a concomitant procedure with a diagnosis of AF have
an average length of stay that is slightly longer than the average
length of stay for all the cases in MS-DRG 219 (11.1 days versus 10.8
days) and slightly higher average costs when compared to all the cases
in MS-DRG 219 ($66,912 versus $65,911).
In MS-DRG 220, we identified a total of 6,496 cases reporting
procedure code combinations describing a single AVR or MVR procedure
and a concomitant procedure with an average length of stay of 6.5 days
and average costs of $45,455. Of those 6,496 cases, there were 3,645
cases reporting procedure code combinations describing a single AVR or
MVR procedure and a concomitant procedure, with a diagnosis of AF with
average costs of $47,560 and an average length of stay of 7 days. The
data analysis performed indicates that the 3,645 cases in MS-DRG 220
reporting procedure code combinations describing a single AVR or MVR
procedure and a concomitant procedure with a diagnosis of AF have an
average length of stay that is slightly longer than the average length
of stay for all the cases in MS-DRG 220 (7 days versus 6.4 days) and
slightly higher average costs when compared to all the cases in MS-DRG
220 ($47,560 versus $45,839).
In MS-DRG 221, we identified a total of 650 cases reporting
procedure code combinations describing a single AVR or MVR procedure
and a concomitant procedure with an average length of stay of 5 days
and average costs of $39,688. Of those 650 cases, there were 239 cases
reporting procedure code combinations describing a single AVR or MVR
procedure and a concomitant procedure, with a diagnosis of AF with
average costs of $41,903 and an average length of stay of 5.6 days. The
data analysis performed indicates that the 239 cases in MS-DRG 221
reporting procedure code combinations describing a single AVR or MVR
procedure and a concomitant procedure with a diagnosis of AF have an
average length of stay that is longer than the average length of stay
for all the cases in MS-DRG 221 (5.6 days versus 4 days) and slightly
higher average costs when compared to all the cases in MS-DRG 221
($41,903 versus $40,694).
The data analysis performed also indicates that the cases in MS-
DRGs 219, 220, and 221 reporting procedure code combinations describing
a single AVR or MVR procedure and a concomitant procedure have a
similar average length of stay and generally lower average costs when
compared to all cases in MS-DRGs 216, 217, and 218. As discussed in the
proposed rule, to compare and analyze the impact of our suggested
modifications, we ran a simulation using the most recent claims data
from the December 2022 update of the FY 2022 MedPAR file. We stated we
found 892 cases reporting procedure codes describing an aortic valve
repair or replacement procedure, a mitral valve repair or replacement
procedure, and another concomitant procedure with an average length of
stay of 15.7 days and average costs of $93,764. Our additional analysis
performed in response to public comments also indicates that the cases
reporting procedure code combinations describing a single AVR or MVR
procedure and a concomitant procedure have a much shorter average
length of stay and much lower average costs when compared to these 892
cases.
Upon analysis of the claims data using our current analytical
framework, review of the original request, and review of the public
comments, while we agree that there are more cases reporting a single
AVR or MVR procedure and another concomitant procedure than cases
reporting concomitant aortic and mitral valve procedures, we do not
agree with assigning cases reporting a single AVR or MVR procedure and
another concomitant procedure for the treatment of atrial fibrillation
to new proposed MS-DRG 212. As previously noted, the data do not
indicate cases reporting a single AVR or MVR procedure and another
concomitant procedure (with or without a diagnosis of AF) utilize
similar resources when compared to the cases proposed to be assigned to
new MS-DRG 212. The cases are not clinically coherent with regard to
resource utilization as reflected in the differences in average costs.
Further, the data do not support creating a new MS-DRG for cases
reporting a single AVR or MVR procedure for the treatment of atrial
fibrillation and instead suggest that cases reporting a single AVR or
MVR procedure for the treatment of atrial fibrillation are suitably
grouped to MS-DRGs 216, 217, 218, 219, 220, and 221 where they are
currently assigned based on the similarities in resource utilization
compared to all the cases in their respective MS-DRG.
In response to comments that urged CMS to assign cases reporting
procedure code combinations describing open concomitant surgical
ablations currently assigned to MS-DRGs 216, 217, 218, 219, 220, and
221 to MS-DRGs 216, 217, and 218, as noted in prior rulemaking, MS-DRGs
216, 217, and 218 are defined by the performance of cardiac
catheterization. We continue to express concern about the effect on
clinical coherence of assigning cases reporting procedure code
combinations describing open concomitant surgical ablations that do not
also have a cardiac catheterization procedure reported to MS-DRGs that
are defined by the performance of that procedure.
In response to the suggestion that CMS delay implementation of
proposed new MS-DRG 212 for a year to allow interested parties to fully
assess the impact of the proposed changes to MS-DRGs 216, 217, 218,
219, 220, and 221 and to analyze other options to address payment
adequacy more broadly across concomitant procedures, we reviewed the
commenters' concern and do not agree that a delay would be prudent. We
believe that the data we currently have
[[Page 58689]]
available is sufficient to create a new MS-DRG for cases reporting an
aortic valve repair or replacement procedure, a mitral valve repair or
replacement procedure, and another concomitant procedure. As discussed
in the proposed rule, and earlier in this section, the data demonstrate
that cases reporting aortic valve repair or replacement procedure, a
mitral valve repair or replacement procedure and another concomitant
procedure have higher average costs and generally longer lengths of
stay compared to all the cases in their assigned MS-DRG.
We appreciate the public comments we received and will continue to
monitor for impacts in MDC 05 and across the MS-DRGs to avoid
unintended consequences or missed opportunities in most appropriately
capturing the resource utilization and clinical coherence for this
subset of procedures.
Comment: Some commenters stated the title of proposed new MS-DRG
212 (Concomitant Aortic and Mitral Valve Procedures) is not clear.
These commenters stated it was not clear if the logic intent is for
cases reporting both a mitral and aortic valve procedure with a
concomitant procedure to be assigned to new MS-DRG 212 or if the logic
intent is to have cases reporting a mitral valve or an aortic valve
procedure with a concomitant procedure to be assigned to new MS-DRG
212. A few commenters suggested that consideration be given to revising
the title of the proposed new MS-DRG as it is not intuitive that the
list of concomitant procedures in the GROUPER logic list for MS-DRG 212
includes both surgical ablation and CABG procedures. Another commenter
stated that the display in the draft Definition Manual, Version 41, for
MS-DRG 212 is unclear and observed there are no instructional notes
included in the draft Definition Manual to explain the intent of the
various lists of procedures.
Response: We appreciate the commenters' feedback. As discussed in
the FY 2024 IPPS/LTCH PPS proposed rule (88 FR 26691 through 26695),
analysis of the claims data suggests that it is the performance of an
aortic valve repair or replacement procedure, a mitral valve repair or
replacement procedure plus another concomitant procedure that is
associated with increased hospital resource utilization (88 FR 26694).
For these reasons, we proposed to create a new MS-DRG for cases
reporting an aortic valve repair or replacement procedure, a mitral
valve repair or replacement procedure, and another concomitant
procedure.
In response to commenters who stated that it was not clear if the
logic intent is for cases reporting both a mitral and aortic valve
procedure with a concomitant procedure to be assigned to new MS-DRG 212
or if the logic intent is to have cases reporting a mitral valve or an
aortic valve procedure with a concomitant procedure to be assigned to
new MS-DRG 212, we wish to clarify cases reporting: (1) an aortic valve
repair or replacement procedure; (2) a mitral valve repair or
replacement procedure; and (3) at least one other concomitant
procedure, as defined in the GROUPER logic, would be assigned to
proposed new MS-DRG 212 (Concomitant Aortic and Mitral Valve
Procedures).
In response to the suggestion that the title of MS-DRG 212 be
revised, we reviewed the commenters' concerns and do not believe a
modification is warranted. As our analysis of the claims data suggests
that it is the performance of an aortic valve repair or replacement
procedure, a mitral valve repair or replacement procedure plus another
concomitant procedure that is associated with increased hospital
resource utilization, we believe the proposed title of the new MS-DRG
appropriately characterizes these findings.
In reviewing the comment regarding the draft version of the ICD-10
MS-DRG Definitions Manual, Version 41, (available at https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/AcuteInpatientPPS/MS-DRG-Classifications-and-Software), that was
provided so the public can better analyze and understand the impact of
the proposals included in the FY 2024 IPPS/LTCH PPS proposed rule, we
agree refinements to the display would be helpful to clarify the
GROUPER logic for MS-DRG 212. In the final ICD-10 MS-DRG Definitions
Manual, Version 41, we will refine the display by adding headers above
each of the respective logic lists as follows:
Select ONE procedure from aortic valve procedures
Select ONE procedure from mitral valve procedures
Select at least ONE procedure from concomitant procedures
Comment: Some commenters noted that the list of procedure codes we
proposed to define aortic valve procedures and mitral valve procedures
in the logic for the proposed new MS-DRG is limited to the root
operations ``Repair'' and ``Replacement,'' however there are other
valve procedures listed under the ``Concomitant Procedure'' logic list.
These commenters suggested that CMS consider moving the aortic and
mitral valve procedure codes with the root operations of ``Creation'',
``Release'', ``Restriction'', and ``Supplement,'' that are currently
listed under the Concomitant Procedures list in Table 6P.4a and in the
draft version of the ICD-10 MS-DRG Definitions Manual to the
appropriate logic list of aortic valve or mitral valve procedures. The
commenters stated that procedure codes with these other root operations
also represent types of valvular repairs and should be included on the
aortic valve procedures and mitral valve procedures logic lists rather
than the ``Concomitant Procedure'' logic list. A commenter stated that
this change would ensure that all of the aortic valve and mitral valve
procedures codes are captured as valve procedures instead of
concomitant procedures when performed.
Response: We appreciate the feedback and will take these
suggestions under consideration. We note that the requestor originally
requested that CMS review the MS-DRG assignments for cases involving
open surgical ablation performed during another open heart surgical
procedure such as mitral valve repair or replacement (MVR), aortic
valve repair or replacement (AVR), or coronary artery bypass grafting
(CABG). Table 6P.3a associated with the proposed rule sets forth the
list of ICD-10-PCS procedure codes reflecting MVR, AVR, CABG, and
surgical ablation procedures that we examined in our analysis. We agree
with the commenters that there are other valve procedures listed under
the ``Concomitant Procedure'' logic list in Table 6P.3a, however, each
of these procedures are defined by clinically distinct definitions and
objectives, which is why there are separate and unique ICD-10-PCS
procedure codes within the classification for reporting purposes.
Additional claims analysis is needed to determine if the technical
complexity and resource utilization of all, or a subset, of the aortic
and mitral valve procedure codes with the root operations of
``Creation'', ``Release'', ``Restriction'', and ``Supplement'' in the
``Concomitant Procedures'' logic list warrant any modifications to the
GROUPER logic of proposed new MS-DRGs 212. We believe there may be an
opportunity to further refine this MS-DRG as we continue to monitor the
claims data and perform additional analysis. We note that we would
address any proposed modifications to the logic in future rulemaking.
Comment: Commenters stated they appreciated CMS' willingness to
examine how the performance of multiple procedures during the same
[[Page 58690]]
operative session contributes to higher hospital costs and patient
length of stay. Commenters encouraged CMS to continue to consider
options in the MS-DRGs for concomitant procedures with higher hospital
resource utilization, given the important patient care benefits and
efficiencies associated with performing certain procedures
concomitantly in a single encounter rather than staging separate
procedures. A commenter stated they recognize that clinical services
across many medical specialties may be performed concomitantly to
optimize patient outcomes and noted, for example, studies indicate when
left atrial appendage closure (LAAC) is performed concomitantly with
ablation, the outcomes are at least as comparable as for patients who
have undergone these procedures separately. This commenter suggested
that CMS conduct comprehensive analysis of all concomitant procedures,
similar to the analysis of concomitant aortic and mitral valve
procedures, to inform whether CMS should establish a more holistic
policy to provide adequate payment for clinical practices that lead to
better efficiency and patient outcomes. Another commenter recommended
that CMS devise a broader, more inclusive, supplemental mechanism to
facilitate incremental payment when two major procedures are performed
during the same hospital admission and urged CMS to ensure that the
incurred costs are adequately addressed so as to not disincentivize
concomitant procedures which can be more cost efficient, more
convenient, and provide a better prognosis for the patient than the
procedures being performed during different hospital stays.
Response: We appreciate the commenters' support. We also thank the
commenters for their recommendations to conduct comprehensive analysis
of all concomitant procedures as we agree that the performance of
``concomitant procedures'' may affect the consumption of resources in
other clinical scenarios, especially when the use of devices is
involved. We continue to be interested in receiving feedback on
possible mechanisms through which we can address concomitant
procedures. We are also interested in receiving feedback on how CMS can
mitigate any unintended negative payment impacts to providers providing
concomitant procedures. Commenters can continue to submit their
recommendations via the Medicare Electronic Application Request
Information SystemTM (MEARISTM) at: https://mearis.cms.gov/public/home. We will consider these public comments for
possible proposals in future rulemaking as part of our annual review
process.
Comment: While supporting the proposal, a commenter suggested that
proposed new MS-DRG 212 be split into two severity levels (with and
without MCC). The commenter stated they believe it is mathematically
impossible for the proposed new MS-DRG to ever be more than a base MS-
DRG, however in their opinion, a base MS-DRG does not take into account
the variation in the average costs between cases reporting a secondary
diagnosis designated as a MCC compared to cases reporting a secondary
diagnosis designated as a CC.
Response: We thank the commenter for their feedback. In response to
the suggestion that proposed new MS-DRG 212 for cases describing
concomitant aortic and mitral valve procedures be subdivided with a
two-way severity level split, we note as discussed in the proposed rule
and earlier in this section, in the analysis of the cases describing
concomitant aortic and mitral valve procedures, we applied the criteria
for a two-way split for the ``with MCC'' and ``without MCC'' subgroups
and found that the criterion that there be at least 500 or more cases
in each subgroup could not be met and therefore did not propose to
subdivide the proposed new MS-DRG for concomitant aortic and mitral
valve procedures into severity levels for FY 2024. In response to the
concern about variation of costs between cases reporting a secondary
diagnosis designated as a MCC compared to cases reporting a secondary
diagnosis designated as a CC in a base MS-DRG, we note the MS-DRG
system is a system of averages, and it is expected that within the
diagnostic related groups, some cases may demonstrate higher than
average costs, while other cases may demonstrate lower than average
costs.
Therefore, after consideration of the public comments we received,
and for the reasons discussed, we are finalizing our proposal to create
a new MS-DRG 212 (Concomitant Aortic and Mitral Valve Procedures) in
MDC 05, without modification, effective October 1, 2023, for FY 2024.
We are also finalizing the list of procedure codes to define the logic
for the new MS-DRGs as displayed in Table 6P.4a associated with the
proposed rule (which is available on the CMS website at: https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/AcuteInpatientPPS/index).
b. External Heart Assist Device
Impella[supreg] Ventricular Support Systems are temporary heart
assist devices intended to support blood pressure and provide increased
blood flow to critical organs in patients with cardiogenic shock, by
drawing blood out of the heart and pumping it into the aorta, partially
or fully bypassing the left ventricle to provide adequate circulation
of blood (replace or supplement left ventricle pumping) while also
allowing damaged heart muscle the opportunity to rest and recover in
patients who need short-term support.
In the FY 2022 IPPS/LTCH PPS final rule (86 FR 44820 through
44831), we discussed a request to reassign certain cases reporting
procedure codes describing the insertion of a percutaneous short-term
external heart assist device from MS-DRG 215 (Other Heart Assist System
Implant) to MS-DRGs 216, 217, and 218 (Cardiac Valve and Other Major
Cardiothoracic Procedures with Cardiac Catheterization with MCC, with
CC, and without CC/MCC, respectively). We stated that our clinical
advisors reviewed the clinical issues and the claims data and agreed
that cases reporting a procedure code that describes the intraoperative
insertion of a short-term external heart assist device are generally
less resource intensive and are clinically distinct from other cases
reporting procedure codes describing the insertion of other types of
heart assist devices currently assigned to MS-DRG 215. We also stated
that critically ill patients who are experiencing or at risk for
cardiogenic shock from an emergent event such as heart attack or virus
that impacts the functioning of the heart and requires longer heart
pump support are different from those patients who require
intraoperative support only. Patients receiving a short-term external
heart assist device intraoperatively during coronary interventions
often have an underlying disease pathology such as heart failure
related to occluded coronary vessels that is broadly similar in kind to
other patients also receiving these interventions without the need for
an insertion of a short-term external heart assist device. In the post-
operative period, these patients can recover and can be sufficiently
rehabilitated prior to discharge. For these reasons, we finalized our
proposal to assign ICD-10-PCS codes 02HA0RJ, 02HA3RJ, or 02HA4RJ that
describe the intraoperative insertion of a short-term external heart
assist device to MS-DRGs 216, 217, 218, 219, 220, and 221.
As discussed in the FY 2024 IPPS/LTCH PPS proposed rule (88 FR
26695
[[Page 58691]]
through 26700), we received a request to reassign certain cases
reporting procedure codes describing the insertion of a short-term
external heart assist device using an axillary artery conduit from MS-
DRG 215 to MS-DRGs 001 and 002 (Heart Transplant or Implant of Heart
Assist System with MCC and without MCC, respectively) and MS-DRG 003
(ECMO or Tracheostomy with MV >96 Hours or Principal Diagnosis Except
Face, Mouth and Neck with Major O.R. Procedures).
We noted in the proposed rule that the Impella 5.5[supreg] with
SmartAssist[supreg] System is designed for longer-duration support (up
to 14 days) than other femoral access percutaneous ventricular assist
devices (pVADs) that treat cardiogenic shock (up to 4 days) providing
full cardiac and hemodynamic support with 5.5 liters of blood flow per
minute. The Impella 5.5[supreg] with SmartAssist[supreg] System is
considered a hybrid procedure of an open vascular exposure and an
endovascular procedure. The Impella 5.5[supreg] with
SmartAssist[supreg] System surgical pump can be inserted through an
open chest for direct aortic access or a surgical incision that exposes
the axillary artery. In the axillary artery approach, a surgical graft
conduit is anastomosed to the axillary artery by a surgeon in the
operating room. The device is positioned across the aortic valve, with
the inlet located in the left ventricle and the outlet in the ascending
aorta to allow the device to directly unload via the native pathway and
to support coronary perfusion. According to the requestor, the Impella
5.5[supreg] with SmartAssist[supreg] System is indicated for more
complex patients than other femoral artery access pVADs, however the
insertion of a short-term external heart assist device using an
axillary artery conduit (such as the Impella 5.5[supreg] with
SmartAssist[supreg] System) is reported with the same ICD-10-PCS code
that describes insertion of a percutaneous short-term external heart
assist device and are therefore also assigned to MS-DRG 215. According
to the requestor, Impella 5.5[supreg] with SmartAssist[supreg] System
is more clinically comparable to implantable heart assist systems, such
as left ventricular assist devices (LVADs), and like LVADs, the
insertion of a short-term external heart assist device using an
axillary artery conduit must be performed by a surgeon in the operating
room. We stated in the proposed rule that the requestor performed its
own data analysis, and stated their analysis showed a significant
variation in the resource utilization for patients treated with the
Impella 5.5[supreg] with SmartAssist[supreg] System compared to
patients treated with other femoral access pVADs assigned to MS-DRG
215.
In the proposed rule, we also noted that following the submission
of the FY 2024 MS-DRG classification change request for certain cases
reporting procedure codes describing the insertion of a short-term
external heart assist device using an axillary artery conduit, this
same requestor (the manufacturer of the Impella[supreg] Ventricular
Support Systems) submitted a code proposal requesting a new ICD-10-PCS
procedure code to describe the Impella 5.5[supreg] with
SmartAssist[supreg] System for consideration as an agenda topic to be
discussed at the March 7-8, 2023 ICD-10 Coordination and Maintenance
Committee meeting. The proposal was presented and discussed at the
March 7-8, 2023 ICD-10 Coordination and Maintenance Committee meeting.
We refer the reader to the CMS website at: https://www.cms.gov/Medicare/Coding/ICD10/C-and-M-Meeting-Materials for additional detailed
information regarding the request, including a recording of the
discussion and the related meeting materials. Public comments in
response to the code proposal were due by April 7, 2023.
In reviewing this MS-DRG reclassification request, in the proposed
rule we noted that we agreed with the requestor that the insertion of a
short-term external heart assist device using an axillary artery
conduit (such as the Impella 5.5[supreg] with SmartAssist[supreg]
System) is not separately identifiable in the claims data. Therefore,
in this section, we address the assignment of the existing procedure
codes describing the insertion of short-term external heart assist
devices, including our proposed reassignment of a subset of these cases
for FY 2024.
The following ICD-10-PCS procedure codes describe the insertion of
a short-term external heart assist device.
BILLING CODE 4120-01-P
[GRAPHIC] [TIFF OMITTED] TR28AU23.039
In the ICD-10 MS-DRG Definitions Manual Version 40.1, procedure
codes 02HA0RZ, 02HA3RZ, and 02HA4RZ are currently recognized as
extensive O.R. procedures assigned to MS-DRG 215 (Other Respiratory
System O.R. Procedures with MCC, with CC, and without CC/MCC,
respectively) in MDC 05.
As stated previously and discussed in the proposed rule, the
request for FY 2024 rulemaking was to reassign certain cases reporting
procedure codes describing the insertion of a short-term external heart
assist device using an axillary artery conduit from MS-DRG 215 to MS-
DRGs 001 and 002 (Heart Transplant or Implant of Heart Assist System
with MCC and without MCC, respectively) and MS-DRG 003 (ECMO or
Tracheostomy with MV >96 Hours or Principal Diagnosis Except Face,
Mouth and Neck with Major O.R. Procedures). During our review of this
request, we noted in the proposed rule that the current GROUPER logic
for MS-DRGs 001 and 002 is comprised of two lists. The first list
includes procedure codes identifying a heart transplant procedure, and
the second list includes procedure codes identifying the implantation
of a heart assist system (including short-term external heart assist
systems) and includes code combinations or procedure code ``clusters''
that, when reported together, satisfy the logic for assignment to MS-
DRGs 001 and 002. The code combinations are represented by two
procedure codes and include either one code for the insertion of the
device with one code for removal of the device or one code for the
revision of the device with one code for the removal of the device.
We also noted in the proposed rule that the GROUPER logic for MS-
DRG 003 is defined by (1) a procedure code for extracorporeal
oxygenation (ECMO), (2) a procedure code for tracheostomy, mechanical
ventilation and a procedure code further classified as extensive, or
(3) a procedure code for tracheostomy with a procedure code further
classified as extensive and a principal diagnosis not assigned to MS-
DRGs 011, 012 or 013 as reflected in the logic table:
[[Page 58692]]
[GRAPHIC] [TIFF OMITTED] TR28AU23.040
As procedure codes describing the insertion of a short-term
external heart assist device are classified as extensive procedures in
Version 40.1, specific assignment of these procedure codes to MS-DRG
003 is not required. When the other parameters of the GROUPER logic are
met and procedure codes describing the insertion of a short-term
external heart assist device are also reported, MS-DRG 003 will be
assigned, therefore in the proposed rule we stated we did not include
MS-DRG 003 in our analysis. We refer the reader to the ICD-10 MS-DRG
Version 40.1 Definitions Manual (which is available on the CMS website
at: https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/AcuteInpatientPPS/MS-DRG-Classifications-and-Software for complete
documentation of the GROUPER logic for the listed MS-DRGs and for
Appendix E--Operating Room Procedures and Procedure Code/MS-DRG Index.
In the proposed rule, we stated that to begin our analysis, we
examined claims data from the September 2022 update of the FY 2022
MedPAR file for MS-DRG 215 to identify cases reporting ICD-10-PCS codes
02HA0RZ, 02HA3RZ, and 02HA4RZ. Our findings are shown in the following
table:
[GRAPHIC] [TIFF OMITTED] TR28AU23.041
As shown in the table, we identified a total of 3,587 cases within
MS-DRG 215 with an average length of stay of 9 days and average costs
of $86,774. Of these 3,587 cases, there are 60 cases reporting a
procedure code describing the open insertion of a short-term external
heart assist device with an average length of stay of 9.2 days and
average costs of $130,153. There are 3,424 cases reporting a procedure
code describing a percutaneous insertion of a short-term external heart
assist device with an average length of stay of 8.9 days and average
costs of $86,640. There are 6 cases reporting a procedure code
describing a percutaneous endoscopic insertion of a short-term external
heart assist device with an average length of stay of 6.7 days and
average costs of $63,923. The data analysis shows that the average
length of stay is longer and the average costs are higher for the cases
reporting a procedure code describing the open insertion of a short-
term external heart assist device compared to all cases in MS-DRG 215,
while the average length of stay is shorter and the average costs are
lower for the cases reporting a procedure code describing the
percutaneous or percutaneous endoscopic insertion of a short-term
[[Page 58693]]
external heart assist device compared to all cases in that MS-DRG.
We stated in the proposed rule that we then examined claims data
from the September 2022 update of the FY 2022 MedPAR for MS-DRGs 001
and 002. Our findings are shown in the following table.
[GRAPHIC] [TIFF OMITTED] TR28AU23.042
We stated that while the average costs for all cases in MS-DRG 001
are higher than the average costs of the cases reporting a procedure
code describing the open insertion of a short-term external heart
assist device, the data suggested that overall, cases reporting a
procedure code describing the open insertion of a short-term external
heart assist device may be more appropriately aligned with the average
costs of the cases in MS-DRGs 001 and 002 in comparison to MS-DRG 215,
even though the average length of stay is shorter.
In the proposed rule, we stated that we then reviewed the clinical
considerations along with this data analysis and agreed that cases
reporting a procedure code that describes the open insertion of a
short-term external heart assist device are generally more resource
intensive and are clinically distinct from other cases reporting
procedure codes describing the insertion of short-term external heart
devices by other approaches currently assigned to MS-DRG 215. The
availability of mechanical circulatory support devices to provide acute
hemodynamic support for cardiogenic shock or to support percutaneous
coronary intervention (PCI) has expanded over the past decade. We noted
that there is now a portfolio of short-term external heart assist
devices available that each have different indications for use and
techniques for implantation.
We also noted that the percutaneous or percutaneous endoscopic
insertion of a short-term external heart assist device involves
standard catheterization techniques except for the requirement of a
large-bore 13 or 14 Fr sheath. Short-term external heart assist devices
inserted in this manner generally provide blood flow up to 2.5 L/min
for systemic perfusion and are intended for temporary (<=4 days) use to
maintain stable heart function. In contrast, the open insertion of a
short-term external heart assist device or the insertion of short-term
external heart assist devices using an axillary artery conduit requires
a surgical cutdown of the axillary artery to place the larger 23 Fr
sheaths of these devices. Short-term external heart assist devices that
are inserted via an open approach or using an axillary artery conduit
can provide blood flow up to 5.5 L/min for systemic perfusion and are
intended for longer use (<=14 days). They are indicated for the
treatment of ongoing cardiogenic shock that occurs less than 48 hours
following acute myocardial infarction or open-heart surgery or in the
setting of cardiomyopathy, including peripartum cardiomyopathy, or
myocarditis as a result of isolated left ventricular failure that is
not responsive to medical management and conventional treatment
measures. We noted in the proposed rule that the indications for the
open insertion of a short-term external heart assist device or the
insertion of short-term external heart assist devices using an axillary
artery conduit are more closely aligned with MS-DRGs 001 and 002 as
compared to MS-DRG 215. For these reasons, we stated we believed
reassigning ICD-10-PCS code 02HA0RZ that describes the open insertion
of a short-term external heart assist device to Pre-MDC MS-DRGs 001 and
002 would improve clinical coherence in these MS-DRGs.
As discussed in the proposed rule, to compare and analyze the
impact of these potential modifications, we ran a simulation using the
claims data from the September 2022 update of the FY 2022 MedPAR file.
The following table reflects our simulation for ICD-10-PCS procedure
code 02HA0RZ that describes the open insertion of a short-term external
heart assist device if it was moved to MS-DRGs 001 and 002.
[GRAPHIC] [TIFF OMITTED] TR28AU23.043
We stated in the proposed rule that we believed that this
simulation supports that the resulting MS-DRG assignments would be more
clinically homogeneous, coherent and better reflect hospital resource
use. A review of this simulation shows that this distribution of ICD-
10-PCS code 02HA0RZ that describes the open insertion of a short-term
external heart assist device if moved to MS-DRGs 001 and 002, slightly
decreases the average
[[Page 58694]]
costs of the cases remaining in MS-DRG 215 by about $3,000, while
similarly having a limited effect on the average costs of MS-DRGS 001
and 002. Therefore, for FY 2024, we proposed to reassign ICD-10-PCS
code 02HA0RZ when reported as a standalone procedure from MDC 05 in MS-
DRG 215 to Pre-MDC MS-DRGs 001 and 002. We noted that under this
proposal, procedure code 02HA0RZ would no longer need to be reported as
part of a procedure code combination or procedure code ``cluster'' to
satisfy the logic for assignment to MS-DRGs 001 and 002.
As discussed in the proposed rule, we will continue to monitor the
clinical cohesiveness of the procedures assigned to MS-DRGs 001 and 002
to assess whether they continue to be aligned on resource use, as well
as current shifts in treatment practices, to determine if additional
refinements may be warranted in the future. The increased availability
of short-term external heart assist devices and their development into
low profile, high output pumps has shifted the management of
cardiogenic shock that is unresponsive to other interventions in the
years since these MS-DRGs were created. These short-term devices can
now be used as a bridge to provide the time needed for clinical
decision making, native heart recovery, or until another procedure can
be performed, such as the insertion of a left ventricular assist device
(LVAD) or cardiac transplantation.
As noted previously, this same requestor (the manufacturer of the
Impella[supreg] Ventricular Support Systems) submitted a code proposal
to be discussed at the March 7-8, 2023 ICD-10 Coordination and
Maintenance Committee meeting to request a change to how the Impella
5.5[supreg] with SmartAssist[supreg] System is coded within the ICD-10-
PCS classification as there are no unique ICD-10-PCS codes to describe
the insertion of a short-term external heart assist system using an
axillary artery conduit. In the proposed rule, we noted that because
the decisions on the diagnosis and procedure code proposals that were
presented at the March 7-8, 2023 ICD-10-CM Coordination and Maintenance
Committee meeting for an October 1 implementation (upcoming FY) are not
finalized in time to include in Table 6A.--New Diagnosis Codes and
Table 6B.--New Procedure Codes in association with the FY 2024 IPPS/
LTCH PPS proposed rule, as we have noted in prior rulemaking (86 FR
44805), we use our established process to examine the MS-DRG assignment
for the predecessor codes to determine the most appropriate MS-DRG
assignment. Specifically, we review the predecessor code and MS-DRG
assignment most closely associated with the new procedure code, and in
the absence of claims data, we consider other factors that may be
relevant to the MS-DRG assignment, including the severity of illness,
treatment difficulty, complexity of service and the resources utilized
in the diagnosis and/or treatment of the condition. We have noted in
prior rulemaking that this process does not automatically result in the
new procedure code being assigned to the same MS-DRG or to have the
same designation (O.R. versus Non-O.R.) as the predecessor code.
We noted in the proposed rule that under this established process,
the MS-DRG assignment for any new procedure codes describing the
Impella 5.5[supreg] with SmartAssist[supreg] System, if finalized
following the March meeting, would be reflected in Table 6B.--New
Procedure Codes associated with the final rule for FY 2024. In the
event there is not support for the new procedure code as presented at
the March 7-8, 2023 ICD-10 Coordination and Maintenance Committee
meeting to describe the insertion of a short-term external heart assist
system using an axillary artery conduit, the procedure will be reported
with current coding that is applicable within the classification as
displayed in the ICD-10 Coordination and Maintenance Committee meeting
materials (available on the CMS website at: https://www.cms.gov/Medicare/Coding/ICD10/C-and-M-Meeting-Materials). We refer the reader
to section II.C.13. of the preamble of the proposed rule and this final
rule for further information regarding Table 6B.
As discussed in prior rulemaking, interested parties may use
current coding information to consider the potential MS-DRG assignments
for procedure codes that may be finalized after the March meeting and
submit public comments for consideration. Specifically, in the ICD-10
Coordination and Maintenance Committee meeting materials (available on
the CMS website at: https://www.cms.gov/Medicare/Coding/ICD10/C-and-M-Meeting-Materials), for each procedure code proposal we provide the
current coding that is applicable within the classification and that
should be reported in the absence of a more unique code, or until such
time a new code is created and becomes effective. The procedure code(s)
listed in current coding are generally, but not always, the same
code(s) that are considered as the predecessor code(s) for purposes of
MS-DRG assignment. As previously noted, our process for determining the
MS-DRG assignment for a new procedure code does not automatically
result in the new procedure code being assigned to the same MS-DRG or
having the same designation (O.R. versus Non-O.R.) as the predecessor
code. However, this current coding information can be used in
conjunction with the GROUPER logic, as set forth in the ICD-10 MS-DRG
Definitions Manual and publicly available on our CMS website at:
https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/AcuteInpatientPPS/MS-DRG-Classifications-and-Software to review the MS-
DRG assignment of the current code(s) and examine the potential MS-DRG
assignment of the proposed code(s), to assist in formulating any public
comments for submission to CMS for consideration.
In summary, we proposed to reassign ICD-10-PCS code 02HA0RZ
(Insertion of short-term external heart assist system into heart, open
approach) from MDC 05 in MS-DRG 215 to Pre-MDC MS-DRGs 001 and 002 for
FY 2024. Separately, and as previously discussed, a code proposal was
discussed at the March 7-8, 2023 ICD-10 Coordination and Maintenance
Committee meeting to request a change to how the Impella 5.5[supreg]
with SmartAssist[supreg] System is coded within the ICD-10-PCS
classification. In the proposed rule, we noted that if finalized, the
new procedure code would be included in the FY 2024 code update files
that are made available in late May/early June on the CMS website at:
https://www.cms.gov/medicare/coding/icd10. In addition, using our
established process, if finalized, the MS-DRG assignment for any new
procedure codes describing the Impella 5.5[supreg] with
SmartAssist[supreg] System will be displayed in Table 6B.--New
Procedure Codes in association with this FY 2024 IPPS/LTCH PPS final
rule that will be made publicly available on the CMS website at https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/AcuteInpatientPPS.
Comment: Many commenters expressed support for CMS' proposal to
reassign ICD-10-PCS code 02HA0RZ from MDC 05 in MS-DRG 215 to Pre-MDC
MS-DRGs 001 and 002 when reported as a standalone procedure. These
commenters stated they agreed with the proposal and believed
reassigning this procedure to MS-DRGs 001 and 002 aligns more
accurately with, and reflects resources used for, these more complex
patients and more complex procedures. Commenters stated that they
appreciate CMS' continued efforts to ensure appropriate code
assignments of surgical approaches for
[[Page 58695]]
short-term heart assist devices and to improve clinical consistency and
predictability for providers as short-term heart assist devices have
evolved with different access procedures to treat hemodynamically
compromised patients. Some commenters also stated that streamlining the
GROUPER logic so that ICD-10-PCS code 02HA0RZ will no longer need to be
reported as part of a procedure code combination or procedure code
``cluster'' to satisfy the logic for assignment to MS-DRGs 001 and 002
will ensure that the cases in these MS-DRGs are more clinically
homogeneous and better reflect hospital resource use.
Response: We thank the commenters for their support.
After consideration of the public comments we received, we are
finalizing our proposal to reassign ICD-10-PCS code 02HA0RZ (Insertion
of short-term external heart assist system into heart, open approach)
from MDC 05 in MS-DRG 215 to Pre-MDC MS-DRGs 001 and 002 when reported
as a standalone procedure, without modification, effective October 1,
2023, for FY 2024. Under this finalization, procedure code 02HA0RZ will
no longer need to be reported as part of a procedure code combination
or procedure code ``cluster'' to satisfy the logic for assignment to
MS-DRGs 001 and 002.
Comment: Many commenters stated that if new ICD-10-PCS procedure
codes describing the Impella 5.5[supreg] with SmartAssist[supreg]
System were finalized following the March 7-8, 2023 ICD-10 Coordination
and Maintenance Committee meeting, they recommend CMS assign the new
codes to MS-DRGs 001 and 002. Some commenters stated that patients
treated with the Impella 5.5[supreg] with SmartAssist[supreg] System
have a very similar clinical presentation as patients treated with
short-term external heart assist systems inserted via the open approach
and utilize approximately the same resources. These commenters stated
that they believed that both procedures are clinically coherent with
cases currently assigned to MS-DRGs 001 and 002, so it is reasonable
that cases reporting the insertion of the Impella 5.5[supreg] with
SmartAssist[supreg] System group to the same MS-DRG as ICD-10-PCS code
02HA0RZ. A commenter further stated that this adjustment would help
ensure adequate payment for the resources invested, allowing
institutions to maintain high-quality care, and would incentivize the
advancement of innovative interventions in the field of cardiovascular
medicine.
Response: We thank the commenters for their feedback.
We note that the proposal to change how the Impella[supreg] 5.5
with SmartAssist[supreg] System is coded within the ICD-10-PCS
classification that was discussed at the March 7-8 2023 ICD-10
Coordination and Maintenance Committee meeting was approved and new
procedure codes to identify the insertion of a short-term external
heart assist system using a conduit attached to the right axillary
artery or to the ascending aorta were finalized as reflected in the FY
2024 ICD-10-PCS Code Update files that were made publicly available on
the CMS website at https://www.cms.gov/Medicare/Coding/ICD10 on June 6,
2023. In addition to the new procedure codes describing the Impella
5.5[supreg] with SmartAssist[supreg] System being made publicly
available in the FY 2024 ICD-10-PCS Code Update files on the CMS
website, we note that the new procedure codes are also reflected in
Table 6B.--New Procedure Codes, in association with this final rule and
available on the CMS website at https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/AcuteInpatientPPS, including the MS-DRG
assignments for these new codes for FY 2024. We refer the reader to
section II.C.13. of the preamble of this final rule for further
information regarding the table.
Specifically, using our established process, we examined the MS-DRG
assignment for the predecessor code to determine the most appropriate
MS-DRG assignment. We reviewed the predecessor code and MS-DRG
assignment most closely associated with the new procedure codes, and in
the absence of claims data, we considered other factors that may be
relevant to the MS-DRG assignment, including the severity of illness,
treatment difficulty, complexity of service and the resources utilized
in the diagnosis and/or treatment of the condition. ICD-10-PCS
procedure code 03HY0YZ (Insertion of other device into upper artery,
open approach) is the predecessor code that we utilized to inform this
analysis.
The MS-DRG assignment for the predecessor code 03HY0YZ and the new
procedure codes describing the insertion of a short-term external heart
assist system using a conduit attached to the right axillary artery or
to the ascending aorta under MDC 05 are identified as follows.
[GRAPHIC] [TIFF OMITTED] TR28AU23.044
While the new procedure codes are being assigned to the same MS-DRG
as the predecessor code in this instance, as we have noted in prior
rulemaking, and earlier in this section, this process does not
automatically result in the new procedure code being assigned to the
same MS-DRG or to have the same designation (O.R. versus Non-O.R.) as
the predecessor code.
We also note that the finalized procedure codes describing the
Impella 5.5[supreg] with SmartAssist[supreg] System identify the
insertion of short-term external heart assist system using a conduit
attached to the right axillary artery or to the ascending aorta. To
fully describe the procedure, a separate code will continue to be
reported for the insertion of the external heart assist system. In
addition to the MDC and MS-DRG assignments as reflected in the previous
table and in Table 6B.--New Procedure Codes, in association with this
final rule, we note the procedure code combinations reflected in the
table that follows are assigned to MS-DRGs 001 and 002, for FY 2024.
This assignment is also reflected in the final Version 41 ICD-10 MS-DRG
GROUPER logic.
[[Page 58696]]
[GRAPHIC] [TIFF OMITTED] TR28AU23.045
The public may provide feedback on these MS-DRG assignments for FY
2024, which will then be taken into consideration for the following
fiscal year.
c. Ultrasound Accelerated Thrombolysis for Deep Venous Thrombosis
As discussed in the FY 2024 IPPS/LTCH PPS proposed rule (88 FR
27000 through 26706), we received a request to reassign cases reporting
ultrasound accelerated thrombolysis (USAT) of peripheral vascular
structures procedures with the administration of thrombolytic(s) for
deep venous thrombosis from MS-DRGs 252, 253, and 254 (Other Vascular
Procedures with MCC, with CC, and without CC/MCC, respectively) to MS-
DRGs 270, 271, and 272 (Other Major Cardiovascular Procedures with MCC,
with CC, and without CC/MCC, respectively).
Deep venous thrombosis (DVT) is caused when a blood clot (or
thrombus) forms in a vein, primarily in large veins of the lower leg
and thigh, but may also occur in the deep veins of the pelvis and less
commonly, in the upper extremities. Risk factors for DVT are similar to
those of pulmonary embolism as discussed in section II.C.4.a. of the
proposed rule and this final rule, and include prolonged immobilization
from any cause, obesity, cancer, fractured hip or leg, use of certain
medications such as oral contraceptives, and the presence of certain
medical conditions such as heart failure. Common symptoms of DVT
include leg (or arm) swelling, pain, cramping, or heaviness, skin
discoloration, the feeling of warmth in the affected area, or there may
not be any noticeable symptoms.
Thrombolysis is a type of treatment where the infusion of
thrombolytics (fibrinolytic or ``clot-busting'' drugs) is used to
dissolve blood clots that form in the arteries or veins with the goal
of improving blood flow and preventing long-term damage to tissues and
organs. Conventional catheter-directed thrombolysis (CDT) procedures
generally rely on a multi-sidehole catheter placed adjacent to the
thrombus through which thrombolytics are delivered directly to the
thrombus, however, the EKOSTM EkoSonic[supreg] Endovascular
System (EKOSTM System) employs ultrasound to assist in
thrombolysis. The ultrasound does not itself dissolve the thrombus, but
pulses of ultrasonic energy temporarily make the fibrin in the thrombus
more porous and increase fluid flow within the thrombus. High
frequency, low-intensity ultrasonic waves create a pressure gradient
that drives the thrombolytic into the thrombus and keeps it in close
proximity to the binding sites. USAT is also referred to as ultrasound-
assisted thrombolysis or ultrasound-enhanced thrombolysis.
We stated in the proposed rule that, according to the requestor
(the manufacturer of the EKOSTM device), USAT of peripheral
vascular structures with the administration of thrombolytic(s) for the
treatment of DVT performed using the EKOSTM device utilizes
more resources in comparison to other procedures that are currently
assigned to MS-DRGs 252, 253, and 254 and is not clinically coherent
with the other procedures assigned to those MS-DRGs. The requestor
stated that the cases reporting USAT of peripheral vascular structures
with the administration of thrombolytic(s) for DVT are more comparable
with and more clinically aligned with the procedures assigned to MS-
DRGs 270, 271, and 272. The requestor stated they performed an analysis
of cases reporting USAT of peripheral vascular structures
[[Page 58697]]
for DVT with the following ICD-10-PCS procedure codes.
[GRAPHIC] [TIFF OMITTED] TR28AU23.046
We noted in the proposed rule that the requestor did not include a
list of diagnosis codes describing DVT or a list of procedure codes
describing the administration of thrombolytic(s) in connection with its
analysis.
In the FY 2021 IPPS/LTCH PPS final rule (85 FR 58561 through 85 FR
58579), we summarized and responded to public comments expressing
concern with the proposed MS-DRG assignments for the newly created
procedure codes describing USAT of several anatomic sites that were
effective with discharges on and after October 1, 2020 (FY 2021).
Similar to the current request for FY 2024, for FY 2021, the commenters
recommended that USAT procedures performed with the EKOSTM
device for the treatment of DVT be assigned to MS-DRGs 270, 271, and
272 instead of MS-DRGs 252, 253, and 254. We refer the reader to the FY
2021 IPPS/LTCH PPS final rule (85 FR
[[Page 58698]]
58561 through 85 FR 58579), available on the CMS website at: https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/AcuteInpatientPPS
for the detailed discussion.
In the proposed rule, we stated that we analyzed claims data from
the September 2022 update of the FY 2022 MedPAR file for MS-DRGs 252,
253, and 254 and cases reporting a principal diagnosis of DVT and USAT
of peripheral vascular structures procedure with and without the
administration of thrombolytic(s). We noted that we identified claims
reporting an USAT of peripheral vascular structures procedure, the
administration of thrombolytic(s), and a diagnosis of DVT with the
listed codes as shown in Table 6P.5a associated with the proposed rule
(and available on the CMS website at: https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/AcuteInpatientPPS). The findings from
our analysis are shown in the following table.
[GRAPHIC] [TIFF OMITTED] TR28AU23.047
As shown in the table, we identified a total of 20,939 cases in MS-
DRG 252 with an average length of stay of 8 days and average costs of
$29,307. Of the 20,939 cases, we found 51 cases reporting a principal
diagnosis of DVT and USAT with thrombolytic(s) with an average length
of stay of 6.4 days and average costs of $36,660 and 10 cases reporting
a principal diagnosis of DVT and USAT without thrombolytic(s) with an
average length of stay of 6.7 days and average costs of $21,538. The
data demonstrate that the cases reporting a principal diagnosis of DVT
and USAT with or without thrombolytic(s) have a shorter average length
of stay compared to the average length of stay of all the cases in MS-
DRG 252 (6.4 days and 6.7 days, respectively versus 8 days). However,
the average costs for the cases reporting a principal diagnosis of DVT
and USAT with thrombolytic(s) are higher than the average costs of all
the cases in MS-DRG 252 ($36,660 versus $29,307) and the average costs
for the cases reporting a principal diagnosis of DVT and USAT without
thrombolytic(s) are lower than the average costs of all the cases in
MS-DRG 252 ($21,538 versus $29,307). The data indicate that the cases
reporting a principal diagnosis of DVT and USAT with thrombolytic(s)
appear to consume more resources in comparison to the other cases in
MS-DRG 252, although it is unclear if the higher resource consumption
is a direct result of the EKOSTM device technology utilized
in the performance of the thrombolysis procedure, or the fact that
these cases also include the reporting of at least one or more
secondary MCC diagnoses, or a combination of both factors. Conversely,
the data indicate that the cases reporting a principal diagnosis of DVT
and USAT without thrombolytic(s) appear to be less resource intensive
with a difference in average costs of $7,769 ($29,307-$21,538 =
$7,769). Accordingly, the data appear to reflect that the cases
reporting use of the EKOSTM device technology with
thrombolytic(s) may have an impact on the consumption of resources when
compared to all the cases in MS-DRG 252.
For MS-DRG 253, we identified a total of 16,650 cases with an
average length of stay of 5.2 days and average costs of $22,685. Of the
16,650 cases, we found 80 cases reporting a principal diagnosis of DVT
and USAT with thrombolytic(s) with an average length of stay of 5.2
days and average costs of $26,471 and 11 cases reporting a principal
diagnosis of DVT and USAT without thrombolytic(s) with an average
length of stay of 3.8 days and average costs of $20,126. The data
demonstrate that the average length of stay for cases reporting a
principal diagnosis of DVT and USAT with thrombolytic(s) is the same as
the average length of stay for all the cases in MS-DRG 253 (5.2 days).
Conversely, the average length of stay for the cases reporting a
principal diagnosis of DVT and USAT without thrombolytic(s) is shorter
than the average length of stay of all the cases in MS-DRG 253 (3.8
days versus 5.2 days). Similar to MS-DRG 252, the average costs for the
cases reporting a principal diagnosis of DVT and USAT with
thrombolytic(s) are higher than the average costs of all the cases in
MS-DRG 253 ($26,471 versus $22,685) and the average costs for the cases
reporting a principal diagnosis of DVT and USAT without thrombolytic(s)
are lower than the average costs of all the cases in MS-DRG 253
($20,126 versus $22,685). The data indicate that the cases reporting a
principal diagnosis of DVT and USAT with thrombolytic(s) appear to
consume more resources in comparison to the other cases in MS-DRG 253,
although it is unclear if the higher resource consumption is a direct
result of the EKOSTM device technology utilized in the
performance of the thrombolysis procedure, or the fact that these cases
also include the reporting of at least one or more secondary CC
diagnoses, or a combination of both factors.
For MS-DRG 254, we identified a total of 6,707 cases with an
average length of stay of 2.4 days and average costs of $15,438. Of the
6,707 cases, we found 22 cases reporting a principal diagnosis of DVT
and USAT with thrombolytic(s) with an average length of stay of 3 days
and average costs of $21,867 and 9 cases reporting a principal
diagnosis of DVT and USAT without thrombolytic(s) with an average
length of stay of 2 days and average costs of $17,750. The data
demonstrate that the cases reporting a principal diagnosis of DVT and
USAT with thrombolytic(s) have a longer average length of stay compared
to the average
[[Page 58699]]
length of stay of all the cases in MS-DRG 254 (3 days versus 2.4 days),
however, the cases reporting a principal diagnosis of DVT and USAT
without thrombolytic(s) have a shorter but comparable average length of
stay compared to the average length of stay of all the cases in MS-DRG
254 (2 days versus 2.4 days). Additionally, the average costs for the
cases reporting a principal diagnosis of DVT and USAT with or without
thrombolytic(s) are higher than the average costs of all the cases in
MS-DRG 254 ($21,867 and $17,750 respectively versus $15,438) with a
corresponding difference in average costs of $6,429 and $2,312
respectively. Similar to our findings for MS-DRGs 252 and 253, the data
for MS-DRG 254 indicate the cases reporting a principal diagnosis of
DVT and USAT with thrombolytic(s) appear to consume more resources in
comparison to the other cases in their respective MS-DRG. In addition,
as noted, for MS-DRG 254, the average costs of cases reporting a
principal diagnosis of DVT and USAT without thrombolytic(s) are also
higher than the average costs of all the cases in MS-DRG 254. However,
it is unclear if the higher resource consumption is a direct result of
the EKOSTM device technology utilized in the performance of
the thrombolysis procedure alone, or if there are other contributing
factors, since cases grouping to MS-DRG 254 do not include the
reporting of at least one or more secondary CC or MCC diagnoses.
We stated in the proposed rule that our review of the data for MS-
DRGs 252, 253, and 254 and our initial analysis for cases reporting a
principal diagnosis of DVT and USAT procedure with and without the
administration of thrombolytic(s) suggests that the administration of
thrombolytic(s) may be considered a factor in the consumption of
resources for these cases in MS-DRGs 252, 253, and 254 where USAT is
performed in the treatment of a DVT. For example, in MS-DRG 252, there
are 51 cases reporting a principal diagnosis of DVT and USAT procedure
with the administration of thrombolytic(s) and 10 cases reporting a
principal diagnosis of DVT and USAT procedure without the
administration of thrombolytic(s), with both subsets of cases showing a
comparable average length of stay of 6.4 and 6.7 days, respectively,
however, the difference in average costs for cases with and without
thrombolytic(s) is $15,122 ($36,660-$21,538 = $15,122). For MS-DRG 253,
there are 80 cases reporting a principal diagnosis of DVT and USAT
procedure with the administration of thrombolytic(s) and 11 cases
reporting a principal diagnosis of DVT and USAT procedure without the
administration of thrombolytic(s), with both subsets of cases showing a
difference in the average length of stay (5.2 days and 3.8 days,
respectively) and a difference in average costs of $6,345 ($26,471-
$20,126 = $6,345). For MS-DRG 254, there are 22 cases reporting a
principal diagnosis of DVT and USAT procedure with the administration
of thrombolytic(s) and 9 cases reporting a principal diagnosis of DVT
and USAT procedure without the administration of thrombolytic(s),
however, both subsets of cases have a similar average length of stay (3
days and 2 days, respectively) with a difference in average costs of
$4,117 ($21,867-$17,750 = $4,117).
In the proposed rule, we noted that since the request we received
was to reassign cases reporting ultrasound accelerated thrombolysis
(USAT) with the administration of thrombolytic(s) for the treatment of
deep venous thrombosis (DVT) from MS-DRGs 252, 253, and 254 to MS-DRGs
270, 271, and 272, based on our approach utilized in our initial
analysis of claims reporting USAT with a principal diagnosis for DVT in
MS-DRGs 252, 253, and 254, we then analyzed claims data from the
September 2022 update of the FY 2022 MedPAR file for all cases in MS-
DRGs 270, 271, and 272 and compared it to the cases reporting a
principal diagnosis of DVT and USAT procedure with or without
thrombolytic(s) in MS-DRGs 252, 253, and 254. The findings from our
analysis are shown in the following tables.
[GRAPHIC] [TIFF OMITTED] TR28AU23.048
[GRAPHIC] [TIFF OMITTED] TR28AU23.049
The claims data show that the 61 cases reporting a principal
diagnosis of DVT and USAT with or without thrombolytic(s) in MS-DRG 252
have average costs that are lower than the average costs of all cases
in MS-DRG 270 ($34,181 versus $42,517) and have a shorter average
length of stay compared to all the cases in MS-DRG 270 (6.4 days versus
9.5 days). The 91 cases reporting a principal diagnosis of DVT and USAT
with or without thrombolytic(s) in MS-DRG 253 have a comparable average
length of stay (5 days versus 5.4 days) in comparison to all the cases
in MS-DRG 271 and lower average costs in comparison to all the cases in
MS-DRG 271 ($25,704 versus $30,030) with a difference of $4,326.
Finally, the 31 cases reporting a principal diagnosis of DVT and USAT
with or without thrombolytic(s) in MS-DRG 254 have an average length of
stay that is comparable to all the cases in the
[[Page 58700]]
MS-DRG 272 (2.7 days versus 2.4 days) and comparable average costs
($20,672 versus $21,556) with a difference of $884.
We stated in the proposed rule that upon analysis of the claims
data and our review of the request, we do not agree with reassigning
cases reporting an USAT procedure with the administration of
thrombolytic(s) and a principal diagnosis of DVT from MS-DRGs 252, 253,
and 254 to MS-DRGs 270, 271, and 272. As stated in the proposed rule,
the data do not support that cases reporting USAT (with or without
thrombolytic(s)) for DVT utilize similar resources when compared to
other procedures currently assigned to MS-DRGs 270, 271, and 272. We do
not agree that cases reporting USAT (with or without thrombolytic(s))
are more comparable with and more clinically aligned with the
procedures assigned to MS-DRGs 270, 271, and 272 because the majority
of procedures in these MS-DRGs describe procedures performed on the
heart and great vessels with either an open or an endoscopic approach
in contrast to the USAT endovascular (percutaneous) procedure performed
on the peripheral vascular structures. In addition, the majority of
procedures in MS-DRGs 270, 271, and 272 are performed on patients who
are not clinically similar to patients who undergo USAT for DVT since
they describe procedures such as bypass, occlusion, and restriction
that are typically performed for patients with conditions other than a
DVT, such as atherosclerosis, aneurysm, and acute myocardial infarction
(AMI). Lastly, a number of procedures in these MS-DRGs also involve the
use of a permanently implanted device while the procedures utilizing
USAT do not. Therefore, we do not consider USAT procedures to be major
cardiovascular procedures, nor do we believe the cases reporting USAT
with (or without thrombolytic(s)) for DVT demonstrate a similar level
of technical complexity when compared to other procedures currently
assigned to MS-DRGs 270, 271, and 272.
As noted in the proposed rule, while the average costs are higher
for cases reporting the administration of a thrombolytic, we questioned
whether the higher average costs may also reflect other factors, such
as the use of the EKOSTM device or the performance of other
O.R. procedures that also group to MS-DRGs 252, 253, and 254.
Consistent with the analysis discussed in section II.C.4.a. of the
proposed rule and this final rule for a similar, but separate request
related to thrombolysis procedures, we believed it would also be
beneficial to examine cases reporting standard CDT procedures with or
without thrombolytic(s) for the treatment of DVT in MS-DRGs 252, 253,
and 254, and compare the findings to the cases reporting USAT with or
without thrombolytic(s) for the treatment of DVT.
Therefore, as discussed in the proposed rule, we conducted
additional analyses to determine if there were significant differences
in resource utilization for cases reporting standard CDT with or
without thrombolytic(s) versus USAT procedures with or without
thrombolytic(s) in the treatment of DVT, since claims data to compare
the two modalities is now available and studies have reported similar
clinical outcomes in reducing DVT regardless of which thrombolysis
modality is utilized.\5\
---------------------------------------------------------------------------
\5\ Engelberger, Rolf & Stuck, Anna K. & Spirk, David &
Willenberg, Torsten & Haine, Axel & P[eacute]riard, Daniel &
Baumgartner, Iris & Kucher, Nils. (2017). Ultrasound-assisted versus
conventional catheter-directed thrombolysis for acute ilio-femoral
deep vein thrombosis: one-year follow-up data of a randomized-
controlled trial. Journal of Thrombosis and Haemostasis. 15.
10.1111/jth.13709.
---------------------------------------------------------------------------
We analyzed claims data from the September 2022 update of the FY
2022 MedPAR file for all cases in MS-DRGs 252, 253, and 254 and cases
reporting a standard CDT procedure with or without the administration
of thrombolytic(s) and a principal diagnosis of DVT. We utilized the
previously listed procedure codes for the administration of
thrombolytic(s) and the previously listed diagnosis codes for a
principal diagnosis of DVT. We identified cases describing standard CDT
procedures performed in the treatment of DVT with the procedure codes
listed in Table 6P.5a. associated with the proposed rule and available
on the CMS website at: https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/AcuteInpatientPPS. The findings from our analysis are
shown in the following table. We note there were no cases found to
report a standard CDT procedure with or without thrombolytic(s) and a
principal diagnosis of DVT in MS-DRGs 253 or 254.
[GRAPHIC] [TIFF OMITTED] TR28AU23.050
The data shows that the 3 cases reporting a principal diagnosis of
DVT and standard CDT with or without thrombolytic(s) in MS-DRG 252 have
a shorter average length of stay compared to all cases in MS-DRG 252
(2.3 days versus 8 days) and lower average costs ($10,603 versus
$29,307).
We noted in the proposed rule that, overall, our analysis of the
claims data for cases reporting a principal diagnosis of DVT and USAT
or standard CDT, with or without thrombolytic(s), demonstrate a low
volume of cases, however, the average costs of the cases reporting USAT
with thrombolytic(s) reflect a significantly higher consumption of
resources than all cases in MS-DRGs 252, 253, and 254. We further noted
that because it is also possible that a patient may be admitted to a
hospital and receive thrombolysis (USAT or CDT) with a principal
diagnosis other than a DVT or the DVT condition may be reported as a
secondary diagnosis, we believed additional analysis for cases
reporting either USAT or CDT, regardless of the principal diagnosis,
would provide us with more beneficial information in our review of
these cases.
Therefore, using the September 2022 update of the FY 2022 MedPAR
file, we conducted an analysis of MS-DRGs 252, 253, and 254 for cases
reporting either USAT or CDT with and without thrombolytic(s) with any
principal diagnosis from MDC 5. Our findings are shown in the following
table.
[[Page 58701]]
[GRAPHIC] [TIFF OMITTED] TR28AU23.051
The findings from our analysis show a larger volume of cases for
each respective MS-DRG (252, 253, and 254) for cases reporting USAT or
CDT procedures with any MDC 05 principal diagnosis versus the findings
from our earlier analysis involving cases specifically reporting a
principal diagnosis of DVT. The claims data also show that the 468
cases reporting any principal diagnosis from MDC 05 and USAT or CDT
with or without thrombolytic(s) in MS-DRG 252 have average costs that
are higher than the average costs of all cases in MS-DRG 252 ($39,181
versus $29,307) and have a comparable average length of stay (8.6 days
versus 8.0 days). The 722 cases reporting any principal diagnosis from
MDC 05 and USAT or CDT with or without thrombolytic(s) in MS-DRG 253
have a shorter average length of stay (4.9 days versus 5.2 days) in
comparison to all the cases in MS-DRG 253 and higher average costs
($29,663 versus $22,685) with a difference of $6,978. Finally, the 195
cases reporting any principal diagnosis from MDC 05 and USAT or CDT
with or without thrombolytic(s) in MS-DRG 254 have an average length of
stay that is comparable to all the cases in the MS-DRG 272 (2.6 days
versus 2.4 days) and higher average costs ($22,487 versus $15,438) with
a difference of $7,049.
As discussed in the proposed rule, based on our review and the
claims data analysis for cases in MS-DRGs 252, 253, and 254 and MS-DRGs
270, 271, and 272, and for cases reporting standard CDT or USAT with or
without thrombolytic(s) regardless of the principal diagnosis reported
from MDC 05, we believe that while the subset of cases for patients
undergoing a thrombolysis (CDT or USAT) procedure for DVT does not
clinically align with patients undergoing surgery for acute myocardial
infarction (AMI) and does not involve the same level of complexity as
cases grouping to MS-DRGs 270, 271, and 272, the differences in
resource consumption warrant reassignment of these cases. Specifically,
we believed the clinical and data analyses support creating a new base
MS-DRG to distinguish cases reporting USAT or standard CDT procedure of
peripheral vascular structures with or without thrombolytic(s) from
other cases currently grouping to MS-DRGs 252, 253, and 254. We stated
we believe a new MS-DRG would reflect more appropriate payment for USAT
and standard CDT procedures of peripheral vascular structures.
In the proposed rule, we also noted that to compare and analyze the
impact of our suggested modifications, we ran a simulation using the
most recent claims data from the December 2022 update of the FY 2022
MedPAR file. The following table illustrates our findings for all 1,487
cases reporting procedure codes describing an USAT or CDT procedure
with any principal diagnosis from MDC 05.
[GRAPHIC] [TIFF OMITTED] TR28AU23.052
Consistent with our established process as discussed in section
II.C.1.b. of the preamble of the proposed rule and this final rule,
once the decision has been made to propose to make further
modifications to the MS-DRGs, such as creating a new base MS-DRG, all
five criteria to create subgroups must be met for the base MS-DRG to be
split (or subdivided) by a CC subgroup. Therefore, we applied the
criteria to create subgroups in a base MS-DRG. We noted in the proposed
rule that, as shown in the table that follows, a three-way split of
this base MS-DRG failed to meet the criterion that there be at least
500 cases in the NonCC (without CC/MCC) subgroup.
[GRAPHIC] [TIFF OMITTED] TR28AU23.053
As discussed in section II.C.1.b. of the preamble of the proposed
rule and this final rule, if the criteria for a three-way split fail,
the next step is to determine if the criteria are satisfied for a two-
way split. We applied the criteria for a two-way split for the ``with
MCC and without MCC'' subgroups. We noted that, as shown in the table
that follows, a two-way split of this base MS-DRG met all five
criteria. For the proposed MS-DRGs, there is at least (1) 500 or more
cases in the MCC group and in the without MCC subgroup; (2) 5 percent
or more of the cases in the MCC group and
[[Page 58702]]
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. The following
table illustrates our findings for the suggested MS-DRGs with a two-way
severity level split.
[GRAPHIC] [TIFF OMITTED] TR28AU23.054
Accordingly, because the criteria for the two-way split were met,
we stated we believed a split (or CC subgroup) is warranted for the
proposed new base MS-DRG. As a result, for FY 2024, we proposed to
create new MS-DRG 278 (Ultrasound Accelerated and Other Thrombolysis of
Peripheral Vascular Structures with MCC) and new MS-DRG 279 (Ultrasound
Accelerated and Other Thrombolysis of Peripheral Vascular Structures
without MCC).
We proposed to define the logic for the proposed new MS-DRGs using
the previously listed procedure codes for USAT and CDT, as identified
and discussed in our analysis of the claims data in Table 6P.5a
associated with the proposed rule.
Comment: Commenters supported the proposal to create new MS-DRGs
278 and 279 (Ultrasound Accelerated and Other Thrombolysis of
Peripheral Vascular Structures with and without MCC, respectively)
given the data and information provided. A commenter stated the new MS-
DRGs will generate more appropriate payment for cases reporting these
procedures.
Response: We thank the commenters for their support.
Comment: A couple commenters suggested that the proposal to create
the two new MS-DRGs should be delayed until more data can be collected.
The commenters stated their belief that it is premature to create these
new MS-DRGs at this time and that in developing these proposed MS-DRGs,
CMS relied on recently implemented ICD-10-PCS data. According to the
commenters, due to the lengthy processes for hospitals to adopt and
accurately implement new coding, and conflicting coding advice for
utilization of the ICD-10-PCS procedure codes for CDT and USAT, the
number of cases is currently insufficient to support development of new
MS-DRGs. The commenter stated that the low volume of cases and related
data selected by CMS for analysis, CDT for the treatment of DVT, cannot
adequately compare to the costs, complexity, and utilization of USAT
with a high confidence interval.
Response: We appreciate the commenters' feedback. We disagree with
the commenters that it is premature to propose the creation of new MS-
DRGs 278 and 279 based on our review and claims data analysis as
discussed in the proposed rule. In response to the commenters'
statement that CMS relied on recently implemented ICD-10-PCS data, it
is not clear to us what specific ICD-10-PCS data the commenters are
referring to since a specific list was not provided, however, we
believe the commenters may be suggesting the codes for USAT that were
finalized October 1, 2020 (FY 2021), and listed previously in
connection with the analysis discussed in the proposed rule. As
discussed in the proposed rule and prior rulemaking, our goal is always
to use the best available data. We noted in the proposed rule that our
initial MS-DRG analysis was based on ICD-10 claims data from the
September 2022 update of the FY 2022 MedPAR file, which contains
hospital bills received from October 1, 2021, through September 30,
2022, and where otherwise indicated, additional analysis was based on
ICD-10 claims data from the December 2022 update of the FY 2022 MedPAR
file, which contains hospital bills received by CMS through December
31, 2022, for discharges occurring from October 1, 2021, through
September 30, 2022. Therefore, we believe our analysis of claims data
in consideration of the MS-DRG request to reassign cases reporting USAT
of peripheral vascular structures procedures with the administration of
thrombolytic(s) for DVT is consistent with our standard process,
regardless of the effective date of the coded claims data. We also do
not agree with the commenters' assertion that it is a lengthy process
for hospitals to adopt and accurately implement new coding. We note
that procedure code proposals discussed at the September ICD-10
Coordination and Maintenance Committee meeting and subsequently
finalized are typically included in Table 6B.--New Procedure Codes in
association with the proposed rule that is made publicly available on
the CMS website at: https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/AcuteInpatientPPS. This table (Table 6B) lists the new
procedure codes that have been approved to date that will be effective
with discharges on and after October 1 of the upcoming fiscal year.
Therefore, information regarding the finalized codes from the September
meeting is made publicly available approximately 4-5 months in advance
of the implementation date, affording the ability for users of the code
set to gain familiarity with the updates. In addition, there are
extensive industry-sponsored educational opportunities through various
professional associations that introduce and discuss the annual code
updates. For example, the American Hospital Association (AHA), American
Health Information Management Association (AHIMA), and the American
Academy of Professional Coders (AAPC) generally take lead roles in
developing detailed technical training materials for coders and other
users of the ICD-10 code set. The AHA also includes updates to ICD-10
in its Coding Clinic[supreg] for ICD-10-CM/ICD-10-PCS publication.
Because the codes describing USAT were finalized for implementation
October 1, 2020 (FY 2021), we believe sufficient time has elapsed and
that providers are successfully coding and reporting the procedure as
demonstrated in our claims analysis.
It is also not clear what conflicting coding advice for utilization
of the ICD-10-PCS procedure codes for CDT and USAT the commenters are
referring to since the commenters did not provide examples or
supplemental information for what they believed to be conflicting
advice to enable further evaluation.
Comment: A couple commenters expressed concern that the inclusion
of both conventional CDT, also known as
[[Page 58703]]
``standard infusion catheters,'' and USAT in the proposed new MS-DRGs
disregards fundamental clinical differences between the procedures.
According to the commenters, CDT generally relies on a multi-sidehole
infusion catheter placed adjacent to the thrombus through which
thrombolytics are delivered, typically over the course of 24 hours with
the catheter in-dwelling, whereas USAT employs ultrasound to assist in
thrombolysis, and the pulses of ultrasonic energy temporarily make the
fibrin in the thrombus more porous and increase fluid flow within the
thrombus. The commenters stated standard CDT is the simple infusion of
liquids into the vessel and should not map to the same root operation
fragmentation codes as does USAT. The commenters also stated CDT
procedures are generally less complex clinically and consume
significantly lower level of hospital resources as a result. The
commenters recommended CMS should delay implementation, not finalize
the proposed MS-DRGs at this time and reconsider at a later date when
utilization volumes reach a threshold of significance.
A commenter also indicated that an analysis of cost data was being
submitted to CMS to demonstrate that USAT DVT cases have total costs
that are more than three times the cost of CDT procedures for the
sickest patients.
Response: We disagree with the commenters that inclusion of both
conventional CDT and USAT in the proposed new MS-DRGs disregards
fundamental clinical differences between the procedures. We note that
while USAT procedures performed utilizing the EKOSTM device
employ ultrasound, the objective of both CDT and USAT procedures is to
effectuate thrombolysis and reduce clot burden. In response to the
commenters' statement that standard CDT is the simple infusion of
liquids into the vessel and should not map to the same root operation
fragmentation codes as does USAT, we note that under ICD-10-PCS, both
USAT and CDT are reported with the root operation fragmentation,
defined as breaking solid matter in a body part into pieces. The
procedure may be accomplished by physical force (e.g., manual,
ultrasonic) applied directly or indirectly that is used to break the
solid matter into pieces. The solid matter may be an abnormal byproduct
of a biological function or a foreign body. The pieces of solid matter
are not taken out. With respect to the commenters' statement that CDT
procedures are generally less complex clinically and consume
significantly lower level of hospital resources, we note that any
procedure that places a catheter inside a blood vessel carries certain
risks, including damage to the blood vessel, bruising or bleeding at
the puncture site, and infection. In response to the commenters'
recommendation that CMS should delay finalization for the proposed MS-
DRGs and reconsider in the future when utilization volumes reach a
threshold of significance, as discussed in the proposed rule, once the
decision was made to propose a new base MS-DRG, we applied the criteria
to create subgroups and the criteria for a two-way split was met,
therefore, we believe sufficient volume does exist for the proposed new
MS-DRGs.
Finally, in response to the cost data that was submitted by a
commenter, we note that it was the same data analysis as reflected and
discussed in the proposed rule, therefore we refer readers to that
prior discussion.
Comment: A commenter stated they agreed that fragmentation
procedures with or without USAT do not belong in the requested MS-DRGs
270, 271, and 272, and suggested they remain in their current MS-DRGs
252, 253, and 254 based on clinical coherence and resource utilization.
Response: We appreciate the commenter's feedback and agree that
fragmentation procedures with or without USAT do not belong in the
requested MS-DRGs 270, 271, and 272. However, for reasons discussed in
the proposed rule, we believe our review of these procedures and data
analysis findings support the proposal to create new MS-DRGs 278 and
279 for grouping cases reporting the performance of USAT or CDT with
any principal diagnosis from MDC 05.
Comment: A couple commenters disagreed with the proposal to create
new MS-DRGs 278 and 279. A commenter stated USAT procedures have been
receiving appropriate payment since FY 2021 and the proposed new MS-
DRGs would create unnecessary administrative burden for established
procedure codes that already have appropriate payment. Another
commenter stated that fragmentation procedures, with or without
ultrasonic assistance to break up blood clots in the peripheral
vasculature, should stay assigned to the current MS-DRGs 252, 253, and
254, respectively. The commenter stated that the costs and resources
for these procedures are consistent with current payment levels when
compared to the rest of the procedures assigned to the current MS-DRGs,
that the change is not needed or necessary, and that over time may
result in overall reduced payment, given that such a low number of
procedures would be assigned to their own MS-DRGs.
Response: We appreciate the commenters' feedback, however, based on
our review of the procedures and claims data analysis as discussed in
the proposed rule, we believe that USAT and CDT procedures performed on
peripheral vascular structures are clinically distinct and utilize a
different pattern of resources than other procedures in MS-DRGs 252,
253, and 254. We stated in the proposed rule that while we did not
agree with the request to reassign cases reporting USAT or CDT for
peripheral vascular structures from MS-DRGs 252, 253, and 254 to MS-
DRGs 270, 271, and 272, we believed the findings from our analysis
warranted proposed reassignment of these cases. While we described the
findings from our review of the procedures currently assigned to MS-
DRGs 270, 271, and 272 to specifically address the MS-DRG request (88
FR 26704), we note that in our review of cases assigned to MS-DRGs 252,
253, and 254 we identified the majority of procedures reported are for
procedures that involve a bypass or dilation procedure that alters the
diameter or route of a tubular body part with either an open or
percutaneous endoscopic approach in contrast to the USAT endovascular
(percutaneous) procedure performed on the peripheral vascular
structures. In addition, a number of procedures in these MS-DRGs also
involve the use of a permanently implanted device while the procedures
utilizing USAT or CDT do not. We also do not agree that the proposed
new MS-DRGs would create an unnecessary administrative burden for the
established procedure codes since providers are accustomed to proposed
and finalized changes to the MS-DRG classifications each fiscal year
and software vendors incorporate the finalized changes into their
products. With respect to the commenter's assertion that a low volume
of procedures would be assigned to their own MS-DRGs based on the
proposal, as previously discussed, once the decision was made to
propose a new base MS-DRG, we applied the criteria to create subgroups
and the criteria for a two-way split was met, therefore, we believe
sufficient volume does exist for the proposed new MS-DRGs.
After consideration of the public comments we received, we are
finalizing our proposal to create new MS-DRG 278 (Ultrasound
Accelerated and Other Thrombolysis of Peripheral Vascular Structures
with MCC) and new MS-DRG 279 (Ultrasound Accelerated
[[Page 58704]]
and Other Thrombolysis of Peripheral Vascular Structures without MCC),
without modification, for FY 2024. We are also finalizing our proposal
to define the logic for the new MS-DRGs using the previously listed
procedure codes for USAT and CDT, as identified and discussed in our
analysis of the claims data in Table 6P.5a associated with the proposed
rule. We will continue to monitor the claims data for these new MS-DRGs
after implementation to determine if additional refinements are
warranted.
d. Coronary Intravascular Lithotripsy
In the FY 2024 IPPS/LTCH PPS proposed rule (88 FR 26706 through
26712), we discussed a request we received to review the MS-DRG
assignment of cases describing percutaneous coronary intravascular
lithotripsy (IVL) involving the insertion of a coronary drug-eluting
stent. Coronary IVL is utilized in a subset of percutaneous coronary
interventions (PCI) procedures when the artery is severely calcified.
The presence of calcium can create various challenges in PCI procedures
as it can prevent the optimal deployment of coronary stents and can
negatively impact patient outcomes. To fully optimize the PCI for
severely calcified arteries, advanced techniques, such as coronary IVL,
that utilize specialty devices are often required. In coronary IVL, a
lithotripsy device catheter is delivered from a small incision in the
patient's arm or leg through to the coronary arterial system of the
heart to reach the site of a severely calcified lesion. The lithotripsy
emitters at the end of the catheter create acoustic pressure waves that
are intended to break up the calcification that is restricting the
blood flow in the vessels of the heart to help open the blood vessels
when an angioplasty balloon is inflated. After the lithotripsy is
performed, the provider can implant an intraluminal device, also called
a stent, to keep the vessel open.
According to the requestor, PCIs involving coronary IVL are
clinically more complex because coronary IVL is a therapy deployed
exclusively in severely calcified coronary lesions, and these lesion
types are associated with longer procedure times and increased
utilization of hospital resources. The requestor performed its own
analysis of claims data for cases reporting procedure codes describing
coronary IVL in MS-DRGs 246 and 247 (Percutaneous Cardiovascular
Procedures with Drug-Eluting Stent with MCC or 4+ Arteries or Stents
and without MCC, respectively) and stated that their findings showed a
significant disparity in total standardized costs for cases in MS-DRG
247. Therefore, according to the requestor, the reassignment of all
cases reporting procedure codes describing percutaneous coronary IVL
involving the insertion of a drug-eluting intraluminal device from the
lower severity level MS-DRG 247 to the higher severity level MS-DRG 246
would be reasonable. The requestor also asked that CMS analyze the
cases reporting procedure codes describing percutaneous coronary IVL
involving the insertion of a non-drug-eluting intraluminal device to
determine if reclassifying cases from the lower severity level MS-DRG
249 (Percutaneous Cardiovascular Procedures with Non-Drug-Eluting Stent
without MCC) to the higher severity level MS-DRG 248 (Percutaneous
Cardiovascular Procedures with Non-Drug-Eluting Stent with MCC or 4+
Arteries or Stents) would be warranted.
The four ICD-10-PCS procedure codes that describe percutaneous
coronary IVL are shown in the following table.
[GRAPHIC] [TIFF OMITTED] TR28AU23.055
We stated in the proposed rule that the Shockwave C2 Intravascular
Lithotripsy System, indicated for lithotripsy-enabled, low-pressure
dilation of calcified, stenotic de novo coronary arteries prior to
stenting, is identified by the reporting of an ICD-10-PCS code that
describes percutaneous coronary IVL shown in the previous table. The
Shockwave C2 Intravascular Lithotripsy System was approved for new
technology add-on payments for FY 2022 (86 FR 45151 through 45153) and
FY 2023 (87 FR 48913). We refer readers to section II.E.5 of the
preamble of the proposed rule and this final rule for a discussion
regarding the FY 2024 status of technologies approved for FY 2023 new
technology add-on payments, including the Shockwave C2 Intravascular
Lithotripsy System.
We stated in the proposed rule that the requestor is correct that
cases reporting procedure codes that describe percutaneous coronary IVL
involving the insertion of a drug-eluting intraluminal device group to
MS-DRGs 246 and 247. We also stated the requestor is correct that cases
reporting procedure codes that describe percutaneous coronary IVL
involving the insertion of a non-drug-eluting intraluminal device group
to MS-DRGs 248 and 249. We referred the reader to the ICD-10 MS-DRG
Definitions Manual Version 40.1, which is available on the CMS website
at: https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/AcuteInpatientPPS/MS-DRG-Classifications-and-Software for complete
documentation of the GROUPER logic for MS-DRGs 246, 247, 248, and 249.
In analyzing this request, we noted in the proposed rule that
coronary IVL is a vessel preparation technique and that there may be
instances where an intraluminal device is unable to be inserted after
the application of the IVL pulses. Therefore, in our analysis of cases
reporting procedure codes describing percutaneous coronary IVL
involving the insertion of a drug-eluting intraluminal device and non-
drug-eluting intraluminal device that group to MS-DRGs 246, 247, 248,
and 249, we stated that we included cases reporting percutaneous
coronary IVL without procedure codes describing the insertion of a
intraluminal device that group to MS-DRGs 250 and 251 (Percutaneous
Cardiovascular Procedures without Coronary Artery Stent with MCC and
without MCC, respectively) in our examination of claims data from the
September 2022
[[Page 58705]]
update of the FY 2022 MedPAR file for cases reporting percutaneous
coronary IVL and compared the results to all cases in their respective
MS-DRG.
The following table shows our findings:
[GRAPHIC] [TIFF OMITTED] TR28AU23.056
As shown by the table, in MS-DRG 246, we identified a total of
40,647 cases, with an average length of stay of 5.2 days and average
costs of $25,630. Of those 40,647 cases, there were 2,359 cases
reporting percutaneous coronary IVL, with higher average costs as
compared to all cases in MS-DRG 246 ($35,503 compared to $25,630), and
a longer average length of stay (5.7 days compared to 5.2 days). In MS-
DRG 247, we identified a total of 54,671 cases with an average length
of stay of 2.4 days and average costs of $16,241. Of those 54,671
cases, there were 1,505 cases reporting percutaneous coronary IVL, with
higher average costs as compared to all cases in MS-DRG 247 ($24,141
compared to $16,241), and a longer average length of stay (2.7 days
compared to 2.4 days). In MS-DRG 248, we identified a total of 555
cases with an average length of stay of 5.9 days and average costs of
$25,740. Of those 555 cases, there were 13 cases reporting percutaneous
coronary IVL, with higher average costs as compared to all cases in MS-
DRG 248 ($34,492 compared to $25,740), and a longer average length of
stay (7.2 days compared to 5.9 days). In MS-DRG 249, we identified a
total of 604 cases with an average length of stay of 2.5 days and
average costs of $14,909. Of those 604 cases, there were 11 cases
reporting percutaneous coronary IVL, with higher average costs as
compared to all cases in MS-DRG 249 ($18,648 compared to $14,909), and
a longer average length of stay (2.8 days compared to 2.5 days). In MS-
DRG 250, we identified a total of 3,483 cases with an average length of
stay of 4.8 days and average costs of $20,634. Of those 3,483 cases,
there were 201 cases reporting percutaneous coronary IVL, with higher
average costs as compared to all cases in MS-DRG 250 ($25,628 compared
to $20,634), and a shorter average length of stay (4.4 days compared to
4.8 days). In MS-DRG 251, we identified a total of 3,199 cases with an
average length of stay of 2.5 days and average costs of $14,273. Of
those 3,199 cases, there were 185 cases reporting percutaneous coronary
IVL, with higher average costs as compared to all cases in MS-DRG 251
($20,289 compared to $14,273), and a shorter average length of stay
(2.4 days compared to 2.5 days). We stated in the proposed rule that
the data analysis shows that the average costs of cases reporting
percutaneous coronary IVL, with or without involving the insertion of
intraluminal device, are higher than for all cases in their respective
MS-DRG.
We also stated that the data analysis also shows that when the
insertion of an intraluminal device was reported with percutaneous
coronary IVL, average costs are generally similar without regard as to
whether a drug-eluting or a non-drug-eluting intraluminal device was
placed. In MS-DRG 246, there were 2,359 cases reporting percutaneous
coronary IVL involving the insertion of a drug-eluting intraluminal
device with average costs of $35,503 compared to 13 cases reporting
percutaneous coronary IVL involving the insertion of a non-drug-eluting
intraluminal device with average costs of $34,492 in MS-DRG 248. In MS-
DRG 247, there were 1,505 cases reporting percutaneous coronary IVL
involving the insertion of a drug-eluting intraluminal device with
average costs of $24,141 compared to 11 cases reporting percutaneous
coronary IVL involving the insertion of a non-drug-eluting intraluminal
device with average costs of $18,648 in MS-DRG 249.
In the proposed rule, we stated we reviewed this data analysis and
agreed
[[Page 58706]]
that the performance of percutaneous coronary IVL contributes to
increased resource consumption for these PCI procedures. We also stated
that we agreed that clinically, the presence of severe calcification
can increase the treatment difficulty and complexity of service. The
data analysis clearly shows that cases reporting percutaneous coronary
IVL, with or without involving the insertion of intraluminal device,
have higher average costs and generally longer lengths of stay compared
to all the cases in their assigned MS-DRG. For these reasons, we
proposed to create new MS-DRGs for percutaneous coronary IVL involving
the insertion of an intraluminal device. While there is not a large
number of cases reporting percutaneous coronary IVL without the
insertion of an intraluminal device represented in the Medicare data,
and we generally prefer not to create a new MS-DRG unless it would
include a substantial number of cases, we stated in the proposed rule
that we believed creating a separate MS-DRG for these cases as well
would appropriately address the differential in resource consumption.
Therefore, we also proposed to create a new MS-DRG for cases describing
percutaneous coronary IVL without the insertion of an intraluminal
device.
To compare and analyze the impact of our suggested modifications,
we noted that we ran a simulation using the most recent claims data
from the December 2022 update of the FY 2022 MedPAR file. The following
table illustrates our findings for all 4,238 cases reporting procedure
codes describing percutaneous coronary IVL involving the insertion of
an intraluminal device.
[GRAPHIC] [TIFF OMITTED] TR28AU23.057
We stated we applied the criteria to create subgroups in a base MS-
DRG as discussed in section II.C.1.b. of the proposed rule and this FY
2024 IPPS/LTCH PPS final rule. As shown, a three-way split of the
proposed new MS-DRG failed to meet the criterion that there be at least
a 20% difference in average costs between the CC and NonCC subgroup and
also failed to meet the criterion that there be at least a $2,000
difference in average costs between the CC and NonCC subgroup.
[GRAPHIC] [TIFF OMITTED] TR28AU23.058
We then applied the criteria for a two-way split for the ``with
MCC'' and ``without MCC'' subgroups and found that all five criteria
were met. The following table illustrates our findings.
[GRAPHIC] [TIFF OMITTED] TR28AU23.059
BILLING CODE 4120-01-C
As discussed in the proposed rule, for the proposed new MS-DRGs for
cases reporting procedure codes describing percutaneous coronary IVL
involving the insertion of an intraluminal device, there is at least
(1) 500 cases in the MCC subgroup and 500 cases in the without MCC
subgroup; (2) 5 percent of the cases in the MCC group and 5 percent 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.
For the cases describing coronary intravascular lithotripsy without
the insertion of an intraluminal device, we identified a total of 404
cases using the most recent claims data from the December 2022 update
of the FY 2022 MedPAR file, so the criterion that there are at least
500 or more cases in each subgroup could not be met. Therefore, for FY
2024, we did not propose to subdivide the proposed new MS-DRG for
coronary intravascular lithotripsy
[[Page 58707]]
without an intraluminal device into severity levels.
In summary, for FY 2024, taking into consideration that it
clinically requires greater resources to perform coronary intravascular
lithotripsy, we proposed to create two new MS-DRGs with a two-way
severity level split for cases describing coronary intravascular
lithotripsy involving the insertion of an intraluminal device in MDC
05. We also proposed to create a new MS-DRG for cases describing
coronary intravascular lithotripsy without an intraluminal device.
These proposed new MS-DRGs are proposed new MS-DRG 323 (Coronary
Intravascular Lithotripsy with Intraluminal Device with MCC), proposed
new MS-DRG 324 (Coronary Intravascular Lithotripsy with Intraluminal
Device without MCC) and proposed new MS-DRG 325 (Coronary Intravascular
Lithotripsy without Intraluminal Device). We refer the reader to Table
6P.6a associated with the proposed rule (which is available on the CMS
website at: https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/AcuteInpatientPPS/index for the list of procedure codes we
proposed to define in the logic for each of the proposed new MS-DRGs.
We refer the reader to section II.C.15. of the preamble of this final
rule for the discussion of the surgical hierarchy and the complete list
of our proposed modifications to the surgical hierarchy as well as our
finalization of those proposals.
Comment: Many commenters expressed support for CMS' proposal to
create new MS-DRGs for cases describing coronary intravascular
lithotripsy. A commenter stated that CMS' proposal highlights the
resources consumed when performing the procedure with or without the
insertion of an intraluminal device. This commenter further stated the
proposal also takes into consideration the challenges associated with
coronary arteries that are severely calcified while simultaneously
providing better outcomes with the optimal deployment of intraluminal
devices, when necessary. A commenter stated they appreciate CMS'
willingness to periodically review hospital resources associated with
the MS-DRGs for percutaneous coronary intervention procedures. Another
commenter applauded CMS' proposal and stated this adjustment should
provide for greater access to this new technology and should contribute
to better outcomes for Medicare patients with severely calcified
arteries.
Response: We appreciate the commenters' support.
Comment: While supporting the proposal, some commenters suggested
that proposed new MS-DRG 325 (Coronary Intravascular Lithotripsy
without Intraluminal Device) be split into two severity levels (with
and without MCC) to recognize the increased resource utilization when a
secondary diagnosis designated as an MCC is present. Another commenter
stated that CMS proposed to delay application of the NonCC subgroup
criteria to existing MS-DRGs with a three-way severity level split for
FY 2024 and questioned CMS' application of the methodology to the
proposed new MS-DRGs. This commenter stated that the presence of a
secondary diagnosis designated as CC and a MCC impacts the length of
stay and costs and therefore distinct tiers within these proposed MS-
DRGs are necessary to reflect the differences in resource utilization.
Response: We thank the commenters for their feedback.
In response to the suggestion that proposed new MS-DRG 325 for
cases describing coronary intravascular lithotripsy without
intraluminal device be subdivided with a two-way severity level split,
as discussed in the proposed rule and earlier in this section, in the
analysis of the cases describing coronary intravascular lithotripsy
without the insertion of an intraluminal device, we note we identified
a total of 404 cases using the most recent claims data from the
December 2022 update of the FY 2022 MedPAR file. Therefore, the
criterion that there are at least 500 or more cases in each subgroup
could not be met so we did not propose to subdivide the proposed new
MS-DRG for coronary intravascular lithotripsy without an intraluminal
device into severity levels for FY 2024.
In response to the concern regarding the application of the NonCC
subgroup criteria to the proposed new MS-DRGs, we note in the FY 2021
IPPS/LTCH PPS final rule (85 FR 58448), we finalized our proposal to
expand our existing criteria to create a new CC or MCC subgroup within
a base MS-DRG. Specifically, we finalized the expansion of the criteria
to include the NonCC subgroup for a three-way severity level split. In
the FY 2022 IPPS/LTCH PPS final rule (86 FR 44798) and FY 2023 IPPS/
LTCH PPS final rule (87 FR 48803), we finalized a delay in applying
this technical criterion to existing MS-DRGs in light of the PHE. We
note that this delay relates to applying this technical criterion to
existing MS-DRGs with a three-way severity level split. As discussed in
prior rulemaking, in general, once the decision has been made to
propose to make further modifications to the MS-DRGs, such as creating
a new base MS-DRG, all five criteria must be met for the base MS-DRG to
be split (or subdivided) by a CC subgroup. We note that we have applied
the criteria to create subgroups, including application of the NonCC
subgroup criteria, in our annual analysis of the MS-DRG classification
requests effective FY 2021 (85 FR 58446 through 58448). For example, we
applied the criteria to create subgroups, including application of the
NonCC subgroup criteria, for a proposed new base MS-DRG as discussed in
our finalization of new base MS-DRG 018 (Chimeric Antigen Receptor
(CAR) T-cell Immunotherapy), new base MS-DRG 019 (Simultaneous Pancreas
and Kidney Transplant with Hemodialysis), new base MS-DRG 140 (Major
Head and Neck Procedures), new base MS-DRG 143 (Other Ear, Nose, Mouth
and Throat O.R. Procedures), new base MS-DRG 521 (Hip Replacement with
Principal Diagnosis of Hip Fracture) and new base MS-DRG 650 (Kidney
Transplant with Hemodialysis) for FY 2021. Similarly, we applied the
criteria to create subgroups including application of the NonCC
subgroup criteria for MS-DRG classification requests for FY 2022 that
we received by November 1, 2020 (86 FR 44796 through 44798), for MS-DRG
classification requests for FY 2023 that we received by November 1,
2021 (87 FR 48801 through 48804), and for MS-DRG classification
requests for FY 2024 that we received by October 20, 2022 (88 FR 26673
through 26676), as well as any additional analyses that were conducted
in connection with those requests. We refer the reader to section
II.C.1.b. of the preamble of this final rule for related discussion
regarding our finalization of the expansion of the criteria to include
the NonCC subgroup in the FY 2021 final rule and our finalization of
the proposal to continue to delay application of the NonCC subgroup
criteria to existing MS-DRGs with a three-way severity level split for
FY 2024.
Comment: Some commenters expressed concern with CMS' proposal and
stated that the proposed MS-DRGs may not reflect the full range of
treatment options for severely calcified coronary lesions that may
demonstrate similar increased costs and acuity. These commenters stated
that the presence of severe calcification can increase treatment
difficulty and complexity of service, which lead to higher average
costs and generally longer lengths of stay. These commenters stated
that CMS should
[[Page 58708]]
consider other well-established advanced vessel preparation techniques,
such as percutaneous coronary rotational and orbital atherectomy, that
also use specialty devices to fully optimize PCI for severely calcified
arteries. A commenter stated that they agreed that there is a subset of
clinically complex PCI cases with higher average costs however, they do
not believe it serves the integrity of the IPPS to create new MS-DRGs
for a single technology serving a relatively low volume of patient
cases and suggested that CMS refine the proposed new MS-DRGs 323, 324
and 325 to include coronary atherectomy procedures. Another commenter
stated that its own analysis demonstrated that resource requirements
for orbital atherectomy are virtually the same as those for coronary
IVL. This commenter noted CMS proposed to create MS-DRG 325 for cases
describing coronary intravascular lithotripsy without intraluminal
device and stated that this is inconsistent with the labeled
indications for use of these high-resource devices. The commenter
stated that coronary IVL and other complex vessel preparation
technologies focus on treating severe calcium to facilitate placement
and technical success of intraluminal devices and expressed concern
with the precedent of establishing a device-specific MS-DRG that is
inconsistent with a technology's indications for use.
Other commenters opposed these recommendations and stated they
believed that CMS' proposal correctly differentiates coronary IVL from
other PCI procedures, given the significant resource variance when IVL
is utilized, and the more clinically complex patients being treated. A
commenter stated that atherectomy is distinct from coronary IVL in
terms of mechanism of action and technique, and further noted that, the
clinical utilization is different in that atherectomy is not a therapy
that is exclusively utilized in heavily calcified lesions. This
commenter stated that in its own analysis of the claims data, the costs
of atherectomy cases are half the costs of coronary IVL cases.
These commenters all encouraged CMS to evaluate these and any other
PCI-related procedures in future rulemaking to allow for all options to
be considered appropriately.
Response: We thank the commenters for their feedback. Although we
note that the initial request was to review the MS-DRG assignment of
cases describing percutaneous coronary intravascular lithotripsy, and
not cases describing other PCI techniques, the commenters are correct
in that there are different types of treatment options available in the
treatment of calcified coronary lesions. Under the ICD-10-PCS procedure
classification system there are two root operations, Extirpation and
Fragmentation, specifically defined as:
Extirpation: Taking or cutting out solid matter from a body part;
and
Fragmentation: Breaking solid matter in a body part into pieces
that are reported to describe the respective procedure that was
performed.
In coronary IVL, emitters at the end of the catheter create
acoustic pressure waves that are intended to break up the calcification
that is restricting the blood flow in the vessels of the heart to help
open the blood vessels when an angioplasty balloon is inflated. Because
the technique fragments matter, procedures performed utilizing devices
such as the Shockwave C2 Intravascular Lithotripsy System are
identified and described by the root operation Fragmentation. In
contrast, procedures such as rotational and orbital atherectomy are
reported with the root operation Extirpation because both techniques
cut up the calcified material into small particles that are removed
from the blood stream by the normal hemofiltration process.
In response to the commenter's statement that both coronary IVL and
coronary atherectomy are procedures intended to treat calcified
coronary arteries, we agree, however, as shown, each of these
procedures are defined by clinically distinct definitions and
objectives, and there are separate and unique ICD-10-PCS procedure
codes within the classification for reporting purposes. We do not
believe it is appropriate to specifically compare the devices being
utilized in the performance of these distinct procedures in
consideration of MS-DRG assignment, rather, the emphasis is on the
fragmentation and extirpation procedures performed and evaluating the
treatment difficulty, resource utilization, and complexity of service.
In response to the commenter's statement regarding the labeled
indications for coronary IVL, as discussed in the proposed rule, there
may be instances where an intraluminal device is unable to be inserted
after the application of the IVL pulses. Accordingly, we identified a
total of 386 cases describing coronary intravascular lithotripsy
without the insertion of an intraluminal device using the September
2022 update of the FY 2022 MedPAR file and 404 cases describing
coronary intravascular lithotripsy without the insertion of an
intraluminal device using the more recent claims data from the December
2022 update of the FY 2022 MedPAR file. We continue to we believe
creating a MS-DRG for these cases as well would appropriately address
the differential in resource consumption.
As discussed in the proposed rule, the data analysis clearly shows
that cases reporting percutaneous coronary IVL, with or without
involving the insertion of intraluminal device, have higher average
costs and generally longer lengths of stay compared to all the cases in
their assigned MS-DRG. We appreciate the commenters' feedback and
suggestions, however, we believe that continued monitoring of the data
and further analysis is needed prior to proposing any modifications to
the proposed new MS-DRGs for percutaneous coronary IVL. We will
continue to evaluate the claims data to determine if further
modifications to the MS-DRG assignment of cases reporting percutaneous
coronary intervention procedures are warranted and address any proposed
modifications to the existing logic in future rulemaking.
Therefore, after consideration of the public comments we received,
and for the reasons discussed, we are finalizing our proposal to create
new MS-DRG 323 (Coronary Intravascular Lithotripsy with Intraluminal
Device with MCC), new MS-DRG 324 (Coronary Intravascular Lithotripsy
with Intraluminal Device without MCC) and new MS-DRG 325 (Coronary
Intravascular Lithotripsy without Intraluminal Device) in MDC 05,
without modification, effective October 1, 2023 for FY 2024. We are
also finalizing the list of procedure codes to define the logic for
each of the new MS-DRGs as displayed in Table 6P.6a associated with the
proposed rule (which is available on the CMS website at: https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/AcuteInpatientPPS/index.
In reviewing this issue, we noted in the FY 2024 proposed rule that
we received a separate but related request in FY 2022 rulemaking. In
the FY 2022 IPPS/LTCH PPS final rule (86 FR 44848 through 44850), we
discussed a request to review the MS-DRG assignments of claims
involving the insertion of coronary stents in PCIs. The requestor
suggested that CMS eliminate the distinction between drug-eluting and
bare-metal coronary stents in the MS-DRG classification. According to
the requestor, coated stents have a clinical performance comparable to
drug-eluting stents, however, they are grouped with bare-metal stents
because they do not contain a drug. The requestor asserted that this
comingling muddies the clinical coherence of the MS-DRG structure, as
one cannot infer distinctions in clinical performance or
[[Page 58709]]
benefits among the groups and potentially creates a barrier (based on
hospital decision-making) to patient access to modern coated stents. In
response, we stated that based on a review of the procedure codes that
are currently assigned to MS-DRGs 246, 247, 248, and 249, our clinical
advisors agreed that further refinement of these MS-DRGs may be
warranted. We noted that in the FY 2003 IPPS/LTCH PPS final rule (67 FR
50003 through 50005), although the FDA had not yet approved the
technology for use, we created two new temporary CMS DRGs to reflect
cases involving the insertion of a drug-eluting coronary artery stent
as signified by the presence of ICD-9-CM procedure code 36.07
(Insertion of drug-eluting coronary artery stent) in recognition of the
potentially significant impact this technology may conceivably have on
the treatment of coronary artery blockages, the predictions of its
rapid, widespread use, and that the higher costs of this technology
could create undue financial hardships for hospitals due to the high
volume of stent cases. In the FY 2022 final rule, we noted that the
distinction between drug-eluting and non-drug-eluting stents is found
elsewhere in the ICD-10-PCS procedure code classification and stated
evaluating this request required a more extensive analysis to assess
potential impacts across the MS-DRGs. We also stated that we believed
it would be more appropriate to consider this request further in future
rulemaking.
As discussed in the proposed rule and this section of the final
rule, our analysis of claims data from the September 2022 update of the
FY 2022 MedPAR file indicates that in cases reporting percutaneous
coronary IVL involving the insertion of an intraluminal device, average
costs are generally similar without regard as to whether a drug-eluting
or non-drug-eluting intraluminal device was inserted. Therefore, in
consideration of the prior request discussed in FY 2022 rulemaking and
to further explore this current finding, we stated we examined claims
data from the September 2022 update of the FY 2022 MedPAR file for MS-
DRGs 246, 247, 248, and 249 for ``all other cases'' assigned to MS-DRGs
246, 247, 248, and 249 that did not report percutaneous coronary IVL as
reflected in the previous table.
In the proposed rule, we again noted that the data analysis shows
that in percutaneous cardiovascular procedures involving the insertion
of an intraluminal device, the average costs are generally similar
without regard as to whether a drug-eluting or non-drug-eluting
intraluminal device(s) was inserted. In MS-DRG 246, there were 38,288
cases reporting percutaneous cardiovascular procedures involving the
insertion of a drug-eluting intraluminal device with an MCC or
procedures involving four or more arteries or intraluminal devices with
average costs of $25,022 compared to 542 cases reporting percutaneous
cardiovascular procedures involving the insertion of a non-drug-eluting
intraluminal device with an MCC or procedures involving four or more
arteries or intraluminal devices with average costs of $25,530 in MS-
DRG 248. In MS-DRG 247, there were 53,166 cases reporting percutaneous
cardiovascular procedures involving the insertion of a drug-eluting
intraluminal device without an MCC with average costs of $16,017
compared to 593 cases reporting percutaneous coronary IVL involving the
insertion of a non-drug-eluting intraluminal device without an MCC with
average costs of $14,840 in MS-DRG 249.
We stated we reviewed these findings and believed that it may no
longer be necessary to subdivide the MS-DRGs based on the type of
coronary intraluminal device inserted. Drug-eluting intraluminal
devices consist of a standard metallic stent, a polymer coating, and an
anti-restenotic drug that is mixed within the polymer and released over
time. In current practice, drug-eluting intraluminal devices are
generally viewed as the default type of intraluminal device considered
for patients undergoing PCI, although non-drug-eluting stents such as
bare-metal coronary artery stents can also be used in PCI procedures
for a range of indications, including stable and unstable angina, acute
myocardial infarction (MI), and multiple-vessel disease. We noted the
related data analysis clearly showed that in the years since the MS-
DRGs for cases involving the insertion of a drug-eluting coronary
artery stent were created, cases reporting percutaneous cardiovascular
procedures involving the insertion of a drug-eluting intraluminal
device now demonstrate average costs and lengths of stays comparable to
cases reporting percutaneous cardiovascular procedures involving the
insertion of a non-drug-eluting intraluminal device. For these reasons,
we proposed the deletion of MS-DRGs 246, 247, 248, and 249, and the
creation of new MS-DRGs.
We noted that in the FY 2008 IPPS/LTCH PPS final rule (72 FR 47259
through 47260) we stated we found that percutaneous transluminal
coronary angioplasties (PTCAs) with four or more vessels or four or
more stents were more comparable in average charges to the higher
weighted DRG in the group and made changes to the GROUPER logic. Claims
containing ICD-9-CM procedure code 00.66 for PTCA, and code 36.07
(Insertion of drug-eluting coronary artery stent(s)), and code 00.43
(Procedure on four or more vessels) or code 00.48 (Insertion of four or
more vascular stents) were assigned to MS-DRG 246. In addition, claims
containing ICD-9-CM procedure code 00.66 for PTCA, and code 36.06
(Insertion of non-drug-eluting coronary artery stent(s)), and code
00.43 or code 00.48 were assigned to MS-DRG 248. We also made
conforming changes to the MS-DRG titles as follows: MS-DRG 246 was
titled ``Percutaneous Cardiovascular Procedures with Drug-Eluting
Stent(s) with MCC or 4 or more Vessels/Stents''. MS-DRG 248 was titled
``Percutaneous Cardiovascular Procedures with Non-Drug-Eluting Stent(s)
with MCC or 4 or more Vessels/Stents''. In FY 2018 IPPS/LTCH PPS final
rule (82 FR 38024), we finalized our proposal to revise the title of
MS-DRG 246 to ``Percutaneous Cardiovascular Procedures with Drug-
Eluting Stent with MCC or 4+ Arteries or Stents'' and the title of MS-
DRG 248 to ``Percutaneous Cardiovascular Procedures with Non-Drug-
Eluting Stent with MCC or 4+ Arteries or Stents'' to better reflect the
ICD-10-PCS terminology of ``arteries'' versus ``vessels'' as used in
the procedure code titles within the classification.
Recognizing that the current GROUPER logic for case assignment to
MS-DRGs 246 or 248 continues to require at least one secondary
diagnosis designated as an MCC or procedures involving four or more
arteries or intraluminal devices, we examined claims data from the
September 2022 update of the FY 2022 MedPAR file for cases reporting
percutaneous cardiovascular procedures involving four or more arteries
or intraluminal devices and compared these data to all cases in MS-DRGs
246 and 248.
[[Page 58710]]
[GRAPHIC] [TIFF OMITTED] TR28AU23.060
As discussed in the proposed rule, in MS-DRG 246, we identified a
total of 40,647 cases with an average length of stay of 5.2 days and
average costs of $25,630. Of those 40,647 cases, there were 3,430 cases
reporting percutaneous cardiovascular procedures involving four or more
arteries or intraluminal devices, with higher average costs as compared
to all cases in MS-DRG 246 ($27,397 compared to $25,630), and a shorter
average length of stay (3.2 days compared to 5.2 days). In MS-DRG 248,
we identified a total of 555 cases with an average length of stay of
5.9 days and average costs of $25,740. Of those 555 cases, there were
21 cases reporting percutaneous cardiovascular procedures involving
four or more arteries or intraluminal devices, with higher average
costs as compared to all cases in MS-DRG 248 ($28,251 compared to
$25,740), and a shorter average length of stay (3.4 days compared to
5.9 days). We stated this analysis demonstrates that cases reporting
percutaneous procedures involving four or more arteries or intraluminal
devices continue to be more comparable in average costs and resource
consumption to the cases in the higher weighted MS-DRG in the group and
indicates that maintaining the logic that recognizes the performance of
percutaneous cardiovascular procedures involving four or more arteries
or intraluminal devices that exists currently in MS-DRGs 246 and 248 in
the proposed new MS-DRGs was warranted.
We noted presently, MS-DRGs 246 and 248 are defined as base MS-
DRGs, each of which is split by a two-way severity level subgroup. Our
proposal includes the creation of one base MS-DRG split also by a two-
way severity level subgroup. To compare and analyze the impact of our
suggested modifications, we stated we ran a simulation using the most
recent claims data from the December 2022 update of the FY 2022 MedPAR
file. The following table illustrates our findings for all 97,338 cases
reporting percutaneous cardiovascular procedures involving intraluminal
devices.
[GRAPHIC] [TIFF OMITTED] TR28AU23.061
We applied the criteria to create subgroups in a base MS-DRG as
discussed in section II.C.1.b. of the proposed rule and this FY 2024
IPPS/LTCH PPS final rule. As shown in the table that follows, a three-
way split of the proposed new MS-DRGs failed to meet the criterion that
there be at least a 20% difference in average costs between the CC and
NonCC subgroup and also failed to meet the criterion that there be at
least a $2,000 difference in average costs between the CC and NonCC
subgroup.
[GRAPHIC] [TIFF OMITTED] TR28AU23.062
We then applied the criteria for a two-way split for the ``with
MCC'' and ``without MCC'' subgroups for the proposed new MS-DRGs and
found that all five criteria were met. The following table illustrates
our findings.
[[Page 58711]]
[GRAPHIC] [TIFF OMITTED] TR28AU23.063
For the proposed new MS-DRGs, there is (1) at least 500 cases in
the MCC subgroup and in the without MCC subgroup; (2) at least 5
percent of the cases are in the MCC subgroup and in the without MCC
subgroup; (3) at least a 20 percent difference in average costs between
the MCC subgroup and the without MCC subgroup; (4) at least a $2,000
difference in average costs between the MCC subgroup and the without
MCC subgroup; and (5) at least 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.
We noted in that proposed rule that proposed refinements for cases
reporting percutaneous cardiovascular procedures with intraluminal
devices represented the first step in investigating how we may evaluate
the distinctions between drug-eluting and non-drug-eluting intraluminal
devices found elsewhere in the ICD-10-PCS procedure code
classification. We stated we are making concerted efforts to continue
refining the ICD-10 MS-DRGs and we believed the resulting MS-DRG
assignments in our current proposal would be more clinically
homogeneous, coherent and better reflect current trends and hospital
resource use.
In summary, for FY 2024, taking into consideration it appears to no
longer be necessary to subdivide the MS-DRGs for percutaneous
cardiovascular procedures based on the type of coronary intraluminal
device inserted, we proposed to delete MS-DRGs 246, 247, 248, and 249,
and create a new base MS-DRG with a two-way severity level split for
cases describing percutaneous cardiovascular procedures with
intraluminal device in MDC 05. These proposed new MS-DRGs are proposed
new MS-DRG 321 (Percutaneous Cardiovascular Procedures with
Intraluminal Device with MCC or 4+ Arteries/Intraluminal Devices) and
proposed new MS-DRG 322 (Percutaneous Cardiovascular Procedures with
Intraluminal Device without MCC). We proposed to add the procedure
codes from current MS-DRGs 246, 247, 248, and 249 to the proposed new
MS-DRGs 321 and 322. We also proposed to revise the titles for MS-DRGs
250 and 251 from ``Percutaneous Cardiovascular Procedures without
Coronary Artery Stent with MCC, and without MCC, respectively'' to
``Percutaneous Cardiovascular Procedures without Intraluminal Device
with MCC, and without MCC, respectively'' to better reflect the ICD-10-
PCS terminology of ``intraluminal devices'' versus ``stents'' as used
in the procedure code titles within the classification.
We refer the reader to section II.C.15. of the preamble of this
final rule for the discussion of the surgical hierarchy and the
complete list of our proposed modifications to the surgical hierarchy
as well as our finalization of those proposals.
Comment: Commenters supported CMS' proposals. These commenters
stated that they agreed with CMS that the distinction between drug-
eluting and bare metal stents is no longer required given the evolution
of these technologies. A commenter stated they appreciated the
simplification of MS-DRGs involving percutaneous intraluminal devices
by omitting the distinction between drug-eluting versus non-drug-
eluting devices with the proposed creation of MS-DRGs 321 and 322.
Another commenter stated that they appreciate CMS periodically
reviewing the MS-DRGs for percutaneous coronary interventions to ensure
they appropriately reflect current clinical practice and appropriately
reflect the hospital resources associated with these procedures. A
commenter supported the proposal, but suggested that there be
consideration to split the new base MS-DRG for cases describing
percutaneous cardiovascular procedures with intraluminal device with a
three-way severity level split, instead of a two-way severity level
split as proposed.
Response: We appreciate the commenters' support. In response to the
suggestion to split the new base MS-DRG for cases describing
percutaneous cardiovascular procedures with intraluminal device with a
three-way severity level split, as discussed in the proposed rule and
earlier in this section, we note we applied the criteria to create
subgroups in a base MS-DRG as discussed in section II.C.1.b. of the
proposed rule and this FY 2024 IPPS/LTCH PPS final rule. We note that a
three-way split of the proposed new MS-DRGs failed to meet the
criterion that there be at least a 20% difference in average costs
between the CC and NonCC subgroup and also failed to meet the criterion
that there be at least a $2,000 difference in average costs between the
CC and NonCC subgroup.
Comment: Other commenters stated that while they agreed with CMS'
rationale that it is no longer necessary to subdivide the MS-DRGs based
on the type of coronary intraluminal device inserted and supported the
proposal to delete MS-DRGs 246, 247, 248, and 249 and create a new base
MS-DRG with a two-way severity level split for cases describing
percutaneous cardiovascular procedures with intraluminal device in MDC
05, they did not agree with the proposed relative weights for these new
MS-DRGs and requested that CMS review the proposed weights for these
MS-DRGs with the weight decline to ensure it adequately captures the
resources for the complex treatment of these patients. These commenters
stated a decrease in the relative weight for the proposed new MS-DRGs
would cause inadequate payment for the medical care and treatment
provided to the patient.
Response: We appreciate the commenters' feedback and concern. We
note that each year, we calculate the relative weights by dividing the
average cost for cases within each MS-DRG by the average cost for cases
across all MS-DRGs. It is to be expected that when MS-DRGs are
restructured, such as when procedure codes are reassigned or the
hierarchy within an MDC is revised, resulting in a different case-mix
within the MS-DRGs, the relative weights of the MS-DRGs will change as
a result. As discussed in the FY 2024 IPPS/LTCH PPS proposed rule, and
earlier in this section, upon application of the criteria to create
subgroups, we proposed to create a base MS-DRG split by a two-way
severity level subgroup for cases describing coronary intravascular
lithotripsy involving the insertion of an intraluminal device in MDC 05
for FY
[[Page 58712]]
2024. Therefore, the data appear to reflect that the difference in the
relative weights reflected in Table 5.--List of Medicare Severity
Diagnosis-Related Groups (MS-DRGs), Relative Weighting Factors, and
Geometric and Arithmetic Mean Length of Stay--FY 2024, associated with
the proposed rule, can be attributed to the fact that these proposals
resulted in a different case-mix within the MS-DRGs which is then being
reflected in the relative weights. We refer the reader to section II.D.
of the preamble of this FY 2024 IPPS/LTCH PPS final rule for a complete
discussion of the relative weight calculations.
After consideration of the public comments we received, and for the
reasons discussed, we are finalizing our proposal, without
modification, to delete MS-DRGs 246, 247, 248, and 249 for FY 2024. We
are also finalizing our proposal to create new MS-DRG 321 (Percutaneous
Cardiovascular Procedures with Intraluminal Device with MCC or 4+
Arteries/Intraluminal Devices) and new MS-DRG 322 (Percutaneous
Cardiovascular Procedures with Intraluminal Device without MCC).
Accordingly, we are finalizing our proposal to reassign the procedure
codes from current MS-DRGs 246, 247, 248, and 249 to the new MS-DRGs
321 and 322. Lastly, we are also finalizing our proposal to revise the
titles of MS-DRGs 250 and 251 from ``Percutaneous Cardiovascular
Procedures without Coronary Artery Stent with MCC, and without MCC,
respectively'' to ``Percutaneous Cardiovascular Procedures without
Intraluminal Device with MCC, and without MCC, respectively'' effective
October 1, 2023 for FY 2024.
e. Shock
In the FY 2022 IPPS/LTCH PPS final rule (86 FR 44831 through
44833), we discussed a request we received to review the MS-DRG
assignment of ICD-10-CM diagnosis code I21.A1 (Myocardial infarction
type 2). The requestor stated that when a type 2 myocardial infarction
is documented, per coding guidelines, it is to be coded as a secondary
diagnosis since it is due to an underlying cause. This requestor also
noted that when a type 2 myocardial infarction is coded with a
principal diagnosis in MDC 05 (Diseases and Disorders of the
Circulatory System), the GROUPER logic assigns MS-DRGs 280 through 282
(Acute Myocardial Infarction, Discharged Alive with MCC, with CC, and
without CC/MCC, respectively). The requestor questioned if this GROUPER
logic was correct or if the logic should be changed so that a type 2
myocardial infarction, coded as a secondary diagnosis, does not result
in the assignment of a MS-DRG that describes an acute myocardial
infarction. During our review of this issue, we also noted that ICD-10-
CM diagnosis code I21.A1 (Myocardial infarction type 2) was one of the
listed principal diagnoses in the GROUPER logic for MS-DRGs 222 and 223
(Cardiac Defibrillator Implant with Cardiac Catheterization with Acute
Myocardial Infarction (AMI), Heart Failure (HF), or Shock with and
without MCC, respectively). However, code I21.A1 was not recognized in
these same MS-DRGs when coded as a secondary diagnosis. Acknowledging
that coding guidelines instruct to code I21.A1 after the diagnosis code
that describes the underlying cause, we indicated our clinical advisors
recommended adding special logic in MS-DRGs 222 and 223 to have code
I21.A1 also qualify when coded as a secondary diagnosis in combination
with a principal diagnosis in MDC 05 since these diagnosis code
combinations also describe acute myocardial infarctions. In the FY 2022
final rule, after consideration of the public comments, we finalized
our proposal to maintain the structure of MS-DRGs 280 through 285,
without modification, for FY 2022. We also finalized our proposal to
modify the GROUPER logic to allow cases reporting diagnosis code I21.A1
(Myocardial infarction type 2) as a secondary diagnosis to group to MS-
DRGs 222 and 223 when reported with qualifying procedures, effective
October 1, 2021. Under this finalization, code I21.A1, as a secondary
diagnosis, is used in the definition of the logic for assignment to MS-
DRGs 222 and 223, and therefore does not act as an MCC in these MS-
DRGs.
In response to this final policy, in the FY 2024 IPPS/LTCH PPS
proposed rule (88 FR 26712 through 26717), we discussed a related
request we received to also add ICD-10-CM diagnosis code R57.0
(Cardiogenic shock) to the list of ``secondary diagnoses'' that group
to MS-DRGs 222 and 223. Cardiogenic shock occurs when the heart cannot
pump enough oxygen-rich blood to the brain and other vital organs
resulting in inadequate tissue perfusion. The most common cause of
cardiogenic shock is acute myocardial infarction. Other causes include
myocarditis, endocarditis, papillary muscle rupture, left ventricular
free wall rupture, acute ventricular septal defect, severe congestive
heart failure, end-stage cardiomyopathy, severe valvular dysfunction,
acute cardiac tamponade, cardiac contusion, massive pulmonary embolus,
or the overdose of drugs such as beta blockers or calcium channel
blockers.
As discussed in the proposed rule, since the MS-DRG titles contain
the word ``shock'', the requestor indicated that it seemed reasonable
for the GROUPER logic to recognize cardiogenic shock when coded as a
secondary diagnosis because, according to the requestor, the specific
underlying cardiac condition responsible for causing the cardiogenic
shock must always be sequenced first. The requestor further asserted
that ICD-10-CM coding guidelines require codes from Chapter 18
(Symptoms, Signs, and Abnormal Clinical and Laboratory Findings) to be
sequenced first, therefore when coding guidelines are followed, this
code can never be an appropriate principal diagnosis. The requestor
acknowledged that if code R57.0 were to be added to the list of
``secondary diagnoses'' that group to MS-DRGs 222 and 223, and
therefore used in the definition of the logic for assignment, the code
would no longer act as an MCC in MS-DRGs 222 and 223.
To begin our analysis, we stated we reviewed the GROUPER logic. In
the proposed rule, we noted that ICD-10-CM diagnosis code R57.0
(Cardiogenic shock) is currently one of the listed principal diagnoses
in the GROUPER logic for MS-DRGs 222 and 223. We stated that requestor
was correct that diagnosis code R57.0 is not currently recognized in
these same MS-DRGs when coded as a secondary diagnosis. We refer the
reader to the ICD-10 MS-DRG Definitions Manual Version 40.1, which is
available on the CMS website at: https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/AcuteInpatientPPS/MS-DRG-Classifications-and-Software for complete documentation of the GROUPER logic for MS-DRGs
222 and 223.
We also stated that the requestor was also correct that the
diagnosis code R57.0 is found in Chapter 18 (Symptoms, Signs and
Abnormal Clinical and Laboratory Findings) of ICD-10-CM and that
diagnosis code R57.0 has a current severity designation of MCC when
reported as a secondary diagnosis. We disagreed, however, that this
code can never be an appropriate principal diagnosis. We noted that
according to the ICD-10-CM Official Guidelines for Coding and
Reporting, diagnoses described by codes from Chapter 18 of ICD-10-CM,
such as R57.0, are acceptable for reporting when a related definitive
diagnosis has not been established (confirmed) by the provider. We also
pointed out that a
[[Page 58713]]
``code first'' note appears at ICD-10-CM diagnosis code I21.A1
(Myocardial infarction type 2). The ``code first'' note is an etiology/
manifestation coding convention (additional detail can be found in the
ICD-10-CM Official Guidelines for Coding and Reporting), indicating
that the condition has both an underlying etiology and manifestation
due to the underlying etiology. No such ``code first'' notes appear at
ICD-10-CM diagnosis code R57.0 (Cardiogenic shock). If providers have
cases involving cardiogenic shock which they need ICD-10 coding
assistance, we encourage them to submit their questions to the American
Hospital Association's Central Office on ICD-10 at https://www.codingclinicadvisor.com/.
As discussed in the proposed rule, we then examined claims data
from the September 2022 update of the FY 2022 MedPAR file for all cases
in MS-DRGs 222 and 223 (Cardiac Defibrillator Implant with Cardiac
Catheterization with AMI, HF or Shock, with and without MCC,
respectively) and compared the results to cases that had a principal
diagnosis or a secondary diagnosis of cardiogenic shock in these MS-
DRGs. We also included MS-DRGs 224 and 225 (Cardiac Defibrillator
Implant with Cardiac Catheterization without AMI, HF or Shock with and
without MCC, respectively) and MS-DRGs 226 and 227 (Cardiac
Defibrillator Implant without Cardiac Catheterization with and without
MCC, respectively) in our analysis as the logic for these MS-DRGs is
similar, differing only in the reporting of a diagnosis that describes
acute myocardial infarction, heart failure or shock, or the performance
of cardiac catheterization. The following table shows our findings:
[GRAPHIC] [TIFF OMITTED] TR28AU23.064
In MS-DRG 222, we identified a total of 1,488 cases with an average
length of stay of 11 days and average costs of $64,794. Of those 1,488
cases, there were six cases reporting a principal diagnosis of R57.0,
with higher average costs as compared to all cases in MS-DRG 222
($88,486 compared to $64,794), and a longer average length of stay
(13.5 days compared to 11 days). There were 322 cases reporting a
secondary diagnosis of R57.0, with higher average costs as compared to
all cases in MS-DRG 222 ($77,451 compared to $64,794), and a longer
average length of stay (15.1 days compared to 11 days). In MS-DRG 224,
we identified a total of 1,606 cases with an average length of stay of
9.4 days and average costs of $60,583. Of those 1,606 cases, there were
zero cases reporting a principal diagnosis of R57.0. There were 268
cases reporting a secondary diagnosis of R57.0, with higher average
costs as compared to all cases in MS-DRG 224 ($77,334 compared to
$60,583), and a longer average length of stay (12.9 days compared to
9.4 days). In MS-DRG 226, we identified a total of 3,595 cases with an
average length of stay of 8.3 days and average costs of $53,706. Of
those 3,595 cases, there were four cases reporting a principal
diagnosis of R57.0, with higher average costs as compared to all cases
in MS-DRG 226 ($72,349 compared to $53,706), and a longer average
length of stay (14.3 days compared to 8.3 days). There were 325 cases
reporting a secondary diagnosis of R57.0, with higher average costs as
compared to all cases in MS-DRG 226 ($65,266 compared to $53,706), and
a longer average length of stay (12.5 days compared to 8.3 days). We
found zero cases across MS-DRGs 223, 225, and 227 reporting R57.0 as
principal or as a secondary diagnosis. Our analysis
[[Page 58714]]
clearly shows that the cases reporting a secondary diagnosis of
cardiogenic shock in MS-DRGs 222, 224 and 226 had higher average costs
and longer average length of stay compared to all cases in their
respective MS-DRGs.
We stated in the proposed rule that we reviewed these data and did
not recommend modifying the GROUPER logic to allow cases reporting
diagnosis code R57.0 (Cardiogenic shock) as a secondary diagnosis to
group to MS-DRGs 222 and 223 when reported with qualifying procedures.
As noted by the requestor, and as discussed in FY 2022 IPPS/LTCH PPS
final rule, (86 FR 44831 through 44833), a diagnosis code may define
the logic for a specific MS-DRG assignment in three different ways.
Whenever there is a secondary diagnosis component to the MS-DRG logic,
the diagnosis code can either be used in the logic for assignment to
the MS-DRG or to act as a CC/MCC.
We stated we believed that patients with cardiogenic shock as a
secondary diagnosis tend to be more severely ill and these inpatient
admissions are associated with greater resource utilization.
Cardiogenic shock represents a life-threatening emergency that requires
urgent treatment that focuses on getting blood flowing properly to
prevent, and protect against, organ failure, brain injury or death. For
clinical consistency, we stated it was more appropriate for ICD-10-CM
diagnosis code R57.0 to act as an MCC when cardiogenic shock is
documented in the medical record and coded as a secondary diagnosis.
Therefore, we did not propose to modify the GROUPER logic to allow
cases reporting diagnosis code R57.0 (Cardiogenic shock) as a secondary
diagnosis to group to MS-DRGs 222 and 223 when reported with qualifying
procedures.
Comment: Commenters expressed support for CMS' proposal to not
modify the GROUPER logic to allow cases reporting diagnosis code R57.0
(Cardiogenic shock) as a secondary diagnosis to group to MS-DRGs 222
and 223 when reported with qualifying procedures.
Response: We thank the commenters for their support.
During our review of this issue, we noted in the proposed rule that
the data analysis showed that in procedures involving a cardiac
defibrillator implant, the average costs and length of stay are
generally similar without regard to the presence of diagnosis codes
describing AMI, HF or shock. In MS-DRG 222, there were 1,488 cases
reporting cardiac defibrillator implant with cardiac catheterization
with AMI, HF, or Shock with an MCC with average costs of $64,794 and an
average length of stay of 11 days compared to 1,606 cases reporting
cardiac defibrillator implant with cardiac catheterization without AMI,
HF, or Shock with an MCC with average costs of $60,583 and an average
length of stay of 9.4 days in MS-DRG 224. In MS-DRG 223, there were 270
cases reporting cardiac defibrillator implant with cardiac
catheterization with AMI, HF or Shock without an MCC with average costs
of $43,500 and an average length of stay of 5.7 days compared to 1,167
cases reporting cardiac defibrillator implant with cardiac
catheterization without AMI, HF, or Shock without an MCC with average
costs of $42,442 and an average length of stay of 4.6 days in MS-DRG
225.
We stated that the analysis of MS-DRGs 222, 223, 224, 225, 226, and
227 further demonstrated that the average length of stay and average
costs for all cases are similar for each of the ``without MCC''
subgroups. As stated previously, for all of the cases in MS-DRG 223, we
found that the average length of stay was 5.7 days with average costs
of $43,500, and for all of the cases in MS-DRG 225, the average length
of stay was 4.6 days with average costs of $42,442. Likewise, for all
of the cases in MS-DRG 227, we found that the average length of stay
was 3.9 days with average costs of $41,636.
We reviewed these findings and stated we believed that it may no
longer be necessary to subdivide these MS-DRGs based on the diagnosis
codes reported. We noted that in the FY 2004 IPPS/LTCH PPS final rule
(68 FR 45356 through 45358) we stated we found that patients who are
admitted with acute myocardial infarction, heart failure, or shock and
have a cardiac catheterization are generally acute patients who require
emergency implantation of the defibrillator. Thus, we stated there were
very high costs associated with these patients. Therefore, we finalized
the creation of new DRGs for patients receiving a cardiac defibrillator
implant with cardiac catheterization and with a principal diagnosis of
acute myocardial infarction, heart failure, or shock.
As discussed in the proposed rule, our analysis of claims data from
the September 2022 update of the FY 2022 MedPAR file clearly shows that
in the 20 years since the DRGs for cases involving a cardiac
defibrillator implant with cardiac catheterization split based on the
presence or absence of diagnosis codes describing acute myocardial
infarction, heart failure, or shock were created, cases reporting a
cardiac defibrillator implant with cardiac catheterization continue to
demonstrate higher average costs and longer lengths of stays, however
these increased costs appear to be more related to the procedures
performed than to the diagnoses reported on the claim, and therefore we
stated that we believed it was time to restructure these MS-DRGs
accordingly.
In the proposed rule, we did note that when reviewing consumption
of hospital resources for the cases reporting cardiac defibrillator
implant with cardiac catheterization during a hospital stay, the claims
data clearly shows that the cases reporting secondary diagnoses
designated as MCCs are more resource intensive as compared to other
cases reporting cardiac defibrillator implant. As noted previously, in
MS-DRG 222, there were 1,488 cases reporting cardiac defibrillator
implant with cardiac catheterization with AMI, HF, or Shock with an MCC
with average costs of $64,794 and an average length of stay of 11 days.
Similarly, in MS-DRG 224, there were 1,606 cases reporting cardiac
defibrillator implant with cardiac catheterization without AMI, HF, or
Shock with an MCC with average costs of $60,583 and an average length
of stay of 9.4 days in MS-DRG 224. In comparison, there were 270 cases
reporting cardiac defibrillator implant with cardiac catheterization
with AMI, HF, or Shock without an MCC with average costs of $43,500 and
an average length of stay of 5.7 days in MS-DRG 223, 1,167 cases
reporting cardiac defibrillator implant with cardiac catheterization
without AMI, HF, or Shock without an MCC with average costs of $42,442
and an average length of stay of 4.6 days in MS-DRG 225, 3,595 cases
reporting cardiac defibrillator implant without cardiac catheterization
with an MCC with average costs of $53,706 and an average length of stay
of 8.3 days in MS-DRG 226, and 2,522 cases reporting cardiac
defibrillator implant without cardiac catheterization without an MCC
with average costs of $41,636 and an average length of stay of 3.9 days
in MS-DRG 227.
Therefore, we stated we supported the removal of the special logic
defined as ``Principal Diagnosis AMI/HF/SHOCK'' from the definition for
assignment to any proposed modifications to the MS-DRGs, noting the
cases can be appropriately grouped along with cases reporting any MDC
05 diagnosis when reported with qualifying procedures, in any
restructured proposed MS-DRGs. For these reasons, we proposed the
deletion of MS-DRGs 222, 223, 224, 225, 226, and 227, and the creation
of three new MS-DRGs. Our proposal
[[Page 58715]]
included the creation of one new base MS-DRG for cases reporting a
cardiac defibrillator implant with cardiac catheterization and a
secondary diagnosis designated as an MCC and another new base MS-DRG
split by a two-way severity level subgroup for cases reporting a
cardiac defibrillator implant without cardiac catheterization.
We stated in the proposed rule that to compare and analyze the
impact of our suggested modifications, we ran a simulation using the
most recent claims data from the December 2022 update of the FY 2022
MedPAR file. The following table illustrates our findings for all 3,467
cases reporting a cardiac defibrillator implant with cardiac
catheterization and a secondary diagnosis designated as an MCC. We note
that as discussed in prior rulemaking (86 FR 44831 through 44833), a
diagnosis code may define the logic for a specific MS-DRG assignment in
three different ways. The diagnosis code may be listed as principal or
as any one of the secondary diagnoses, as a secondary diagnosis, or
only as a secondary diagnosis. For this specific scenario, we proposed
that secondary diagnosis codes with a severity designation of MCC be
used in the definition of the logic for assignment to the proposed base
MS-DRG for cases reporting a cardiac defibrillator implant with cardiac
catheterization and a secondary diagnosis designated as an MCC.
Therefore, we did not apply the criteria to create further subgroups in
a base MS-DRG for cases reporting a cardiac defibrillator implant with
cardiac catheterization and a secondary diagnosis designated as an MCC
as discussed in section II.C.1.b. of the FY 2024 IPPS/LTCH PPS proposed
rule. We stated that we believed the resulting proposed MS-DRG
assignment is more clinically homogeneous, coherent and better reflects
hospital resource use.
[GRAPHIC] [TIFF OMITTED] TR28AU23.065
To further compare and analyze the impact of our suggested
modifications, we stated we then ran a simulation using the most recent
claims data from the December 2022 update of the FY 2022 MedPAR file
for cases reporting a cardiac defibrillator implant without
additionally reporting both a cardiac catheterization and a secondary
diagnosis designated as an MCC. The following table illustrates our
findings for all 7,935 cases.
[GRAPHIC] [TIFF OMITTED] TR28AU23.066
We applied the criteria to create subgroups in a base MS-DRG as
discussed in section II.C.1.b. of the FY 2024 IPPS/LTCH PPS proposed
rule. As shown in the table that follows, a three-way split of the
proposed new MS-DRGs failed the criterion that there be at least 500
cases for each subgroup due to low volume. Specifically, for the
``without CC/MCC'' (NonCC) split, there were only 452 cases in the
subgroup. The criterion that there be at least a 20% difference in
average costs between the CC and NonCC subgroup also failed to be met.
[GRAPHIC] [TIFF OMITTED] TR28AU23.067
We then applied the criteria for a two-way split for the ``with
MCC'' and ``without MCC'' subgroups for the proposed new MS-DRGs and
found that all five criteria were met. The following table illustrates
our findings.
[GRAPHIC] [TIFF OMITTED] TR28AU23.068
[[Page 58716]]
For the proposed new MS-DRGs, there is (1) at least 500 cases in
the MCC subgroup and in the without MCC subgroup; (2) at least 5
percent of the cases are in the MCC subgroup and in the without MCC
subgroup; (3) at least a 20 percent difference in average costs between
the MCC subgroup and the without MCC subgroup; (4) at least a $2,000
difference in average costs between the MCC subgroup and the without
MCC subgroup; and (5) at least 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.
In summary, for FY 2024, taking into consideration that it appears
to no longer be necessary to subdivide the MS-DRGs for cases reporting
a cardiac defibrillator implant based on the diagnosis code reported,
we proposed to delete MS-DRGs 222, 223, 224, 225, 226, and 227, and
create a new MS-DRG for cases reporting a cardiac defibrillator implant
with cardiac catheterization and a secondary diagnosis designated as an
MCC in MDC 05. We also proposed to create two new MS-DRGs with a two-
way severity level split for cases reporting a cardiac defibrillator
implant without additionally reporting both a cardiac catheterization
and a secondary diagnosis designated as an MCC. These proposed new MS-
DRGs are proposed new MS-DRG 275 (Cardiac Defibrillator Implant with
Cardiac Catheterization and MCC), proposed new MS-DRG 276 (Cardiac
Defibrillator Implant with MCC) and proposed new MS-DRG 277 (Cardiac
Defibrillator Implant without MCC).
In the proposed rule, we noted that the procedure codes describing
cardiac catheterization are designated as non-O.R. procedures,
therefore, as part of the logic for MS-DRG 275, we also proposed to
designate these codes as non-O.R. procedures affecting the MS-DRG. We
referred the reader to Table 6P.7a and Table 6P.7b associated with the
proposed rule (which is available on the CMS website at: https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/AcuteInpatientPPS/index) for the list of procedure codes we proposed to
define in the logic for each of the proposed new MS-DRGs. We refer the
reader to section II.C.15. of the preamble of this final rule for the
discussion of the surgical hierarchy and the complete list of our
proposed modifications to the surgical hierarchy as well as our
finalization of those proposals.
Comment: Most commenters supported the proposal to delete MS-DRGs
222, 223, 224, 225, 226, and 227, and to create three new MS-DRGs in
MDC 05. These commenters stated that they agreed with CMS that it is no
longer necessary to subdivide the MS-DRGs for cases reporting a cardiac
defibrillator implant based on the diagnosis code reported. A few
commenters stated that while they found the proposal reasonable based
on the data and rationale provided, they urged CMS to monitor for any
unintended consequences. However, a commenter opposed the proposal.
This commenter stated that the proposed change will have a notable
negative impact based on its own analysis of claims data at its
organization. The commenter further noted claims at its organization
demonstrate significant length of stay and cost variations across the
current MS-DRGs which they asserted further supports that revising the
MS-DRGs is not appropriate from a resource utilization perspective.
Response: We appreciate the commenters' support and appreciate the
additional feedback. With regard to the commenter's concern that the
proposal might have a negative impact based on its own analysis of
claims data at its organization, the examination of claims data from
the September 2022 update of the FY 2022 MedPAR file for MS-DRGs 222,
223, 224, 225, 226, and 227 showed that in procedures involving a
cardiac defibrillator implant, the average costs and length of stay are
generally similar without regard to the presence of diagnosis codes
describing AMI, HF or shock. We note that the commenter did not provide
any clinical rationale as to why the distinction based on the presence
of diagnosis codes should be maintained in these MS-DRGs. As noted in
prior rulemaking, the goals of reviewing the MS-DRG assignments of
particular procedures are to better clinically represent the resources
involved in caring for these patients and to enhance the overall
accuracy of the system. Our analysis of the claims data demonstrated
that for cases involving a cardiac defibrillator implant the increased
costs appear to be more related to the procedures performed than to the
diagnoses reported on the claim, and we continue to believe it is time
to restructure these MS-DRGs accordingly, noting that cases reporting
any MDC 05 diagnosis when reported with qualifying procedures will
group to the proposed new MS-DRGs. CMS will continue to monitor the
claims data for these procedures for unintended consequences as a
result of the deletion of the six MS-DRGs from the GROUPER logic as we
continue our comprehensive analysis in future rulemaking.
Comment: While supporting the proposal, other commenters noted that
CMS proposed to create new MS-DRG 275 (Cardiac Defibrillator Implant
with Cardiac Catheterization and MCC) for cases reporting a cardiac
defibrillator implant with cardiac catheterization and a secondary
diagnosis designated as an MCC in MDC 05. These commenters recommended
that an additional MS-DRG be created for cardiac defibrillator implant
with cardiac catheterization without MCC. A few commenters stated that
it was not clear where cases reporting a cardiac defibrillator implant
with a cardiac catheterization without MCC would be assigned. A
commenter noted that the draft HTML version of the ICD-10 MS-DRG
Definitions Manual for Version 41 available on the CMS website does not
show ``MCC'' as part of the logic for MS-DRGs 275 and 276. Another
commenter noted that CMS proposed to delay application of the NonCC
subgroup criteria to existing MS-DRGs with a three-way severity level
split for FY 2024 and questioned CMS' application of the methodology to
the proposed new MS-DRGs.
Response: We thank the commenters for their feedback. We note to
commenters that when reviewing consumption of hospital resources for
the cases reporting cardiac defibrillator implant with cardiac
catheterization during a hospital stay, as discussed earlier in this
section, the claims data clearly showed that the cases reporting
secondary diagnoses designated as MCCs are more resource intensive as
compared to other cases reporting cardiac defibrillator implant.
Accordingly, our proposal included the creation of one base MS-DRG for
cases reporting a cardiac defibrillator implant with cardiac
catheterization and a secondary diagnosis designated as an MCC and
another base MS-DRG split by a two-way severity level subgroup for
cases reporting a cardiac defibrillator implant without cardiac
catheterization.
As discussed in the proposed rule, we examined claims data from the
September 2022 update of the FY 2022 MedPAR file for all cases in MS-
DRGs 222, 223, 224, 225, 226, and 227. In MS-DRGs 222 and 224, there
were 3,094 cases reporting cardiac defibrillator implant with cardiac
catheterization, with or without a diagnosis of AMI, HF, or Shock, and
a secondary diagnosis designated as an MCC with average costs of
$62,608 and an average length of stay of 10.2 days. In comparison,
there were 3,959 cases reporting cardiac
[[Page 58717]]
defibrillator implant, with or without cardiac catheterization, with or
without a diagnosis of AMI, HF, or Shock, without an MCC with average
costs of $42,001 and an average length of stay of 4.2 days in MS-DRG
223, 225 and 227. We did not propose to subdivide the proposed new base
MS-DRG 275 for cases reporting a cardiac defibrillator implant with
cardiac catheterization and a secondary diagnosis designated as an MCC
into severity levels as the cases reporting a cardiac defibrillator
implant with cardiac catheterization without a secondary diagnosis
designated as an MCC (that are currently assigned to MS-DRGs 223 and
225) have average costs and an average lengths of stay comparable to
other cases reporting cardiac defibrillator implant, without cardiac
catheterization, with or without a diagnosis of AMI, HF, or Shock, also
without a secondary diagnosis designated as an MCC. Instead, for this
specific scenario, we proposed that secondary diagnosis codes with a
severity designation of MCC be used in the definition of the logic for
assignment to the proposed base MS-DRG for cases reporting a cardiac
defibrillator implant with cardiac catheterization and a secondary
diagnosis designated as an MCC. We continue to believe the resulting
proposed MS-DRG assignment is more clinically homogeneous, coherent and
better reflects hospital resource use.
In response to commenters who stated that it was not clear where
cases reporting a cardiac defibrillator implant with a cardiac
catheterization without a secondary diagnosis designated as an MCC
would be assigned, we note that these cases would be assigned to
proposed new MS-DRG 277 (Cardiac Defibrillator Implant without MCC), as
reflected in the test version of the ICD-10 MS-DRG GROUPER Software,
Version 41.
In response to the comment regarding the draft version of the ICD-
10 MS-DRG Definitions Manual, Version 41, available at https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/AcuteInpatientPPS/MS-DRG-Classifications-and-Software, we agree there
was an inadvertent error in the logic table for MS-DRGs 275, 276 and
277. We are correcting the display as reflected in the following logic
table:
[GRAPHIC] [TIFF OMITTED] TR28AU23.069
This correction will also be reflected in the final ICD-10 MS-DRG
Definitions Manual, Version 41.
In response to the concern regarding the application of the NonCC
subgroup criteria to the proposed new MS-DRGs, we note that in the FY
2021 IPPS/LTCH PPS final rule (85 FR 58448), we finalized our proposal
to expand our existing criteria to create a new complication or
comorbidity (CC) or major complication or comorbidity (MCC) subgroup
within a base MS-DRG. Specifically, we finalized the expansion of the
criteria to include the NonCC subgroup for a three-way severity level
split. In the FY 2022 IPPS/LTCH PPS final rule (86 FR 44798) and FY
2023 IPPS/LTCH PPS final rule (87 FR 48803), we finalized a delay in
applying this technical criterion to existing MS-DRGs in light of the
PHE. We note that this delay relates to applying this technical
criterion to existing MS-DRGs with a three-way severity level split. As
discussed in prior rulemaking, in general, once the decision has been
made to propose to make further modifications to the MS-DRGs, such as
creating a new base MS-DRG, all five criteria must be met for the base
MS-DRG to be split (or subdivided) by a CC subgroup. We note that we
have applied the criteria to create subgroups, including application of
the NonCC subgroup criteria, in our annual analysis of the MS-DRG
classification requests effective FY 2021 (85 FR 58446 through 58448).
For example, we applied the criteria to create subgroups, including
application of the NonCC subgroup criteria, for a proposed new base MS-
DRG as discussed in our finalization of new base MS-DRG 018 (Chimeric
Antigen Receptor (CAR) T-cell Immunotherapy), new base MS-DRG 019
(Simultaneous Pancreas and Kidney Transplant with Hemodialysis), new
base MS-DRG 140 (Major Head and Neck Procedures), new base MS-DRG 143
(Other Ear, Nose, Mouth and Throat O.R. Procedures), new base MS-DRG
521 (Hip Replacement with Principal Diagnosis of Hip Fracture), and new
base MS-DRG 650 (Kidney Transplant with Hemodialysis) for FY 2021.
Similarly, we applied the criteria to create subgroups including
application of the NonCC subgroup criteria for MS-DRG classification
requests for FY 2022 that we received by November 1, 2020 (86 FR 44796
through 44798), for MS-DRG classification requests for FY 2023 (87 FR
48801 through 48804) that we received by November 1, 2021, and for MS-
DRG classification requests for FY 2024 that we received by October 20,
2022 (88 FR 26673 through 26676), as well as any additional analyses
that were conducted in connection with those requests. We refer the
reader to section II.C.1.b. of the preamble of this final rule for
related discussion regarding our finalization of the expansion of the
criteria to include the NonCC subgroup in the FY 2021 final rule and
our finalization of the proposal to continue to delay application of
the NonCC subgroup criteria to existing MS-DRGs with a three-way
severity level split for FY 2024.
Comment: A commenter stated that while they agreed that it appears
to no longer be necessary to subdivide the MS-DRGs for cases reporting
a cardiac defibrillator implant based on the diagnosis code reported,
they did not think it was necessary to delete MS-DRGs 226 and 227
(Cardiac Defibrillator Implant without Cardiac Catheterization with and
without MCC, respectively) and create new MS-DRGs 276 and 277 (Cardiac
Defibrillator Implant with and without MCC, respectively). This
commenter stated that the proposed new MS-DRG 276 has the same GROUPER
logic as the existing MS-DRG 226 and therefore will capture the same
cases. This commenter further stated they believed that the current
title of MS-DRG 226 better identifies the cases assigned. This
commenter also suggested keeping existing MS-DRG 227 and revising the
title to ``Cardiac Defibrillator Implant with or without Cardiac
Catheterization without MCC'' instead of creating new MS-DRG 277.
Response: We appreciate the commenter's feedback. The commenter is
correct that proposed new MS-DRG 276 has the same GROUPER logic as
current MS-DRG 226. In response to the
[[Page 58718]]
commenter's concern regarding why new MS-DRG numbers would be
considered, as discussed in prior rulemaking (87 FR 48804), we note
that new MS-DRG numbers are preferred because we anticipate that
individuals, payers, and organizations conducting analysis would need
to be aware if proposed changes to base DRG concepts are made to allow
them time to adjust their programs, analyses, or queries that may have
hard coded the DRG numbers. To minimize confusion for those who rely on
MS-DRG concepts year to year and to avoid unintended consequences from
maintaining the existing MS-DRG number, we believe it is appropriate to
finalize the revision to both the MS-DRG number and corresponding
description for cases reporting a cardiac defibrillator implant without
cardiac catheterization with a secondary diagnosis designated as an
MCC.
Therefore, after consideration of the public comments received, and
for the reasons previously stated, we are finalizing our proposal to
delete MS-DRGs 222, 223, 224, 225, 226, and 227. We are also finalizing
our proposal to create new MS-DRG 275 (Cardiac Defibrillator Implant
with Cardiac Catheterization and MCC), new MS-DRG 276 (Cardiac
Defibrillator Implant with MCC), and new MS-DRG 277 (Cardiac
Defibrillator Implant without MCC) in MDC 05, without modification,
effective October 1, 2023, for FY 2024. Accordingly, we are also
finalizing our proposal to designate the procedure codes describing
cardiac catheterization as non-O.R. procedures affecting the MS-DRG.
Comment: Another commenter stated that a code proposal requesting
new procedure codes to describe the implantation, removal and revision
of extravascular implantable defibrillator (EV ICD) leads was presented
and discussed at the March 7-8, 2023 ICD-10 Coordination and
Maintenance Committee meeting. The commenter further stated that CMS
has proposed to create new MS-DRGs 275, 276, and 277 for cases
reporting cardiac defibrillator implant procedures, which includes
procedures describing the insertion of implantable cardioverter-
defibrillators (ICDs) for FY 2024, while cases reporting cardiac
defibrillator lead removal and revision procedures are assigned to MS-
DRG 265 (AICD Lead Procedures). This commenter suggested that any new
procedure codes finalized after the March 7-8, 2023 ICD-10 Coordination
and Maintenance Committee meeting that describe EV ICD procedures
should be assigned to MS-DRG 265 and MS-DRGs 275-277 as well and stated
that alignment of these new ICD-10-PCS codes with existing
defibrillator procedure codes in terms of MS-DRG assignment will ensure
clinical coherence and facilitate patient access and provider choice
among ICD technologies.
Response: We thank the commenter for their feedback. We note that
the proposal requesting new procedure codes to identify procedures
involving extravascular implantable defibrillator leads that was
discussed at the March 7-8, 2023 ICD-10 Coordination and Maintenance
Committee meeting was approved and 11 new procedure codes to identify
procedures involving EV ICD leads were finalized as reflected in the FY
2024 ICD-10-PCS Code Update files that were made publicly available on
the CMS website at https://www.cms.gov/Medicare/Coding/ICD10 on June 6,
2023. We also note that the new procedure codes are also reflected in
Table 6B.--New Procedure Codes, in association with this final rule and
available on the CMS website at https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/AcuteInpatientPPS, including the MS-DRG
assignments for these new codes for FY 2024. We refer the reader to
section II.C.13. of the preamble of this final rule for further
information regarding the table.
As we have noted in prior rulemaking (86 FR 44805), we used our
established process to determine the most appropriate MS-DRG assignment
for the new procedure codes approved after March 7-8, 2023 ICD-10
Coordination and Maintenance Committee meeting to identify procedures
involving EV ICD leads. Specifically, we reviewed the predecessor codes
and MS-DRG assignments most closely associated with the new procedure
codes, and in the absence of claims data, we considered other factors
that may be relevant to the MS-DRG assignment, including the severity
of illness, treatment difficulty, complexity of service and the
resources utilized in the diagnosis and/or treatment of the condition.
The MS-DRG assignments for the predecessor codes that we utilized to
inform this analysis and the new procedure codes to identify procedures
involving extravascular implantable defibrillator leads under MDC 05
are identified as follows.
BILLING CODE 4120-01-P
[[Page 58719]]
[GRAPHIC] [TIFF OMITTED] TR28AU23.070
While the new procedure codes are being assigned to the same MS-DRG
as the predecessor codes in this instance, as we have noted in prior
rulemaking, and earlier in this section, this process does not
automatically result in the new procedure code being assigned to the
same MS-DRG or to have the same designation (O.R. versus Non-O.R.) as
the predecessor code.
In addition to the MDC and MS-DRG assignments as reflected in Table
6B.--
[[Page 58720]]
New Procedure Codes, in association with this final rule, we note that
the procedure code combinations describing the insertion of an EV ICD
lead with the insertion of a defibrillator generator, are assigned to
new MS-DRGs 275, 276, and 277 for FY 2024. This assignment is reflected
in the final V41 GROUPER logic. The public may provide feedback on the
MS-DRG assignments for FY 2024, which will then be taken into
consideration for the following fiscal year.
6. MDC 06 (Diseases and Disorders of the Digestive System):
Appendicitis
In the FY 2023 IPPS/LTCH PPS proposed rule (87 FR 28163 through 87
FR 28165) and final rule (87 FR 48849 through 87 FR 48850), we
discussed a request related to the MS-DRG assignment of diagnosis codes
describing acute appendicitis with generalized peritonitis, with and
without perforation or abscess when reported with an appendectomy
procedure. In that discussion, we stated that any future proposed
changes to the MS-DRGs for appendectomy procedures would be dependent
on the diagnosis code revisions that are finalized by the CDC/National
Center for Health Statistics (NCHS) since the CDC/NCHS staff presented
a proposal for further revisions to the diagnosis codes describing
acute appendicitis with generalized peritonitis at the March 8-9, 2022
ICD-10 Coordination and Maintenance Committee meeting. Specifically,
the CDC/NCHS staff proposed to expand diagnosis codes K35.20 (Acute
appendicitis with generalized peritonitis, without abscess) and K35.21
(Acute appendicitis with generalized peritonitis, with abscess), making
them sub-categories and creating new diagnosis codes to identify and
describe acute appendicitis with generalized peritonitis, with
perforation and without perforation, and unspecified as to perforation.
We noted that the deadline for submitting public comments on the
diagnosis code proposals discussed at the March 8-9, 2022 ICD-10
Coordination and Maintenance Committee meeting was May 9, 2022, and
according to the CDC/NCHS staff, the diagnosis code proposals were
being considered for an October 1, 2023, implementation (FY 2024). We
refer the reader to the CDC website at https://www.cdc.gov/nchs/icd/icd10cm_maintenance.htm for additional detailed information regarding
the proposal, including a recording of the discussion and the related
meeting materials.
In the FY 2024 IPPS/LTCH PPS proposed rule (88 FR 26717), we stated
that, as shown in Appendix B--Diagnosis Code/MDC/MS-DRG Index of the
ICD-10 MS-DRG Definitions Manual V40.1 (available at: https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/AcuteInpatientPPS/MS-DRG-Classifications-and-Software), diagnosis codes
K35.20 and K35.21 are currently assigned to medical MS-DRGs 371, 372,
and 373 (Major Gastrointestinal Disorders and Peritoneal Infections
with MCC, with CC, and without CC/MCC, respectively) in MDC 06.
Diagnosis code K35.21 is also assigned to surgical MS-DRGs 338, 339,
and 340 (Appendectomy with Complicated Principal Diagnosis with MCC,
with CC, and without CC/MCC, respectively) in MDC 06 because diagnosis
code K35.21 is defined as a complicated diagnosis in the GROUPER logic.
Therefore, when a procedure code describing an appendectomy is reported
with principal diagnosis code K35.21, the logic for case assignment to
MS-DRGs 338, 339, or 340 is satisfied.
As discussed in section II.C.13. of the preamble of the proposed
rule, Table 6C--Invalid Diagnosis Codes (available on the CMS website
at: https://www.cms.gov/medicare/medicare-fee-for-service-payment/
acuteinpatientpps) lists the diagnosis codes that are no longer
effective starting October 1, 2023. Included in this table are
diagnosis codes K35.20 and K35.21. In addition, we noted that as shown
in the following table and in Table 6A--New Diagnosis Codes associated
with the proposed rule (and available on the CMS website at: https://
www.cms.gov/medicare/medicare-fee-for-service-payment/
acuteinpatientpps), six new diagnosis codes describing acute
appendicitis with generalized peritonitis, with and without perforation
or abscess were finalized and are effective with discharges on and
after October 1, 2023. We stated in the proposed rule that consistent
with our established process for assigning new diagnosis and procedure
codes, we reviewed the predecessor codes (K35.20 and K35.21) to
determine the MS-DRG assignment most closely associated with the new
diagnosis codes. In addition, we noted that the proposed severity level
designations for the new diagnosis codes are set forth in Table 6A. As
shown, the new codes are proposed for assignment to medical MS-DRGs
371, 372, and 373 (Major Gastrointestinal Disorders and Peritoneal
Infections with MCC, with CC, and without CC/MCC, respectively), in
accordance with the assignment of predecessor codes K35.20 and K35.21.
[GRAPHIC] [TIFF OMITTED] TR28AU23.071
We stated in the proposed rule that because the acute appendicitis
diagnosis code revisions have been finalized by the CDC/NCHS, we
believed it is now appropriate to address the MS-DRG request for
diagnosis code K35.20 describing acute appendicitis with generalized
peritonitis when an appendectomy procedure is performed. We referred
the reader to the ICD-10 MS-DRG Definitions Manual Version 40.1, which
is available on the CMS website at: https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/AcuteInpatientPPS/MS-DRG-Classifications-and-Software for complete documentation of the GROUPER
logic for MS-DRGs 338, 339, and 340 (Appendectomy with Complicated
Principal Diagnosis with MCC, with CC, and without CC/MCC,
respectively) and MS-DRGs 341, 342, and 343 (Appendectomy without
Complicated Principal Diagnosis with MCC, with CC, and without CC/MCC,
respectively) that includes the procedure codes defined in the logic
for an appendectomy.
As stated in the proposed rule, we first analyzed claims data from
the September 2022 update of the FY 2022 MedPAR file for MS-DRGs 338,
339, and 340 and cases reporting any one of
[[Page 58721]]
the following diagnosis codes currently defined in the logic as a
complicated principal diagnosis when reported as a principal diagnosis.
[GRAPHIC] [TIFF OMITTED] TR28AU23.072
Our findings are shown in the following table. We note that if a
diagnosis is not listed it is because there were no cases found.
[GRAPHIC] [TIFF OMITTED] TR28AU23.073
The data shows that overall, each of the ``complicated'' diagnoses
appears to have a comparable average length of stay and similar average
costs when compared to the average length of stay and average costs of
all the cases in the respective MS-DRG, as well as, to each other.
Next, we analyzed claims data from the September 2022 update of the
FY 2022 MedPAR file for MS-DRGs 341, 342, and 343 and cases reporting
any one of the following diagnosis codes describing acute appendicitis.
[[Page 58722]]
[GRAPHIC] [TIFF OMITTED] TR28AU23.074
Our findings are shown in the following table.
[GRAPHIC] [TIFF OMITTED] TR28AU23.075
Similar to the findings for the ``complicated'' diagnoses, the
``uncomplicated'' diagnoses also have a comparable average length of
stay and similar average costs when compared to the average length of
stay and average costs of all the cases in the respective MS-DRG.
We stated in the proposed rule that based on our analysis for both
the ``complicated'' and ``uncomplicated'' diagnoses combined with our
review of all the cases in the MS-DRGs, we believed the findings
support a prior comment, as summarized in the FY 2023 IPPS/LTCH PPS
final rule (87 FR 48849), that clinically, both localized and
generalized peritonitis in association with an appendectomy require the
same level of patient care, including extensive intraoperative
irrigation at the surgical site, direct inspection or imaging of the
abdomen to identify possible abscess, use of intravenous antibiotics,
and prolonged monitoring. In addition, localized peritonitis progresses
to generalized peritonitis. In our direct comparison of the
``complicated'' versus ``uncomplicated'' MS-DRGs, we believe the
distinction is no longer meaningful with regard to resource
consumption. As shown in the following table, we
[[Page 58723]]
found the ``with MCC'' MS-DRGs, the ``with CC'' MS-DRGs, and the
``without CC/MCC'' MS-DRGs all have a comparable average length of stay
and similar average costs. For example, MS-DRG 338 has an average
length of stay of 7 days with average costs of $20,311 and MS-DRG 341
has an average length of stay of 5.8 days and average costs of $19,080.
The volume of cases for this MS-DRG pair is also similar with 579 cases
in MS-DRG 338 and 533 cases in MS-DRG 341.
[GRAPHIC] [TIFF OMITTED] TR28AU23.076
As a result of our analysis and review of this issue, we stated in
the proposed rule that we believed the findings support eliminating the
logic for ``complicated'' and ``uncomplicated'' diagnoses and
restructuring the six MS-DRGs. We also noted that in our review of the
logic for the appendectomy procedures, we identified procedures listed
in the current logic that we did not agree reflect an actual
appendectomy as suggested in the title of the current MS-DRGs, rather
the logic describes various procedures performed on the appendix.
To compare and analyze the impact of our suggested modifications,
we ran a simulation using the most recent claims data from the December
2022 update of the FY 2022 MedPAR file. The following table illustrates
our findings for all 8,060 cases reporting procedure codes describing a
procedure performed on the appendix.
[GRAPHIC] [TIFF OMITTED] TR28AU23.077
Consistent with our established process as discussed in section
II.C.1.b. of the preamble of the proposed rule, once the decision has
been made to propose to make further modifications to the MS-DRGs, all
five criteria to create subgroups must be met for the base MS-DRG to be
split (or subdivided) by a CC subgroup. Therefore, we applied the
criteria to create subgroups in a base MS-DRG. We noted that, as shown
in the table that follows, a three-way split of this proposed new base
MS-DRG was met. The following table illustrates our findings.
[GRAPHIC] [TIFF OMITTED] TR28AU23.078
For the proposed new MS-DRGs, there is (1) at least 500 cases in
the MCC subgroup, the CC subgroup, and the without CC/MCC subgroup; (2)
at least 5 percent of the cases are in the MCC subgroup, the CC
subgroup, and the without CC/MCC subgroup; (3) at least a 20 percent
difference in average costs between the MCC subgroup and the CC
subgroup and between the CC group and NonCC subgroup; (4) at least a
$2,000 difference in average costs between the MCC subgroup and the CC
subgroup and between the CC subgroup and NonCC subgroup; and (5) at
least a 3-percent reduction in cost variance, indicating that the
proposed severity level splits increase the explanatory
[[Page 58724]]
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.
Therefore, we proposed to delete MS-DRGs 338, 339, 340, 341, 342,
and 343 and proposed to create new MS-DRG 397 Appendix Procedures with
MCC, MS-DRG 398 Appendix Procedures with CC, and MS-DRG 399 Appendix
Procedures without CC/MCC for FY 2024. These proposed new MS-DRGs would
no longer require a diagnosis in the definition of the logic for case
assignment. We also proposed to include the current list of
appendectomy procedures in the logic for case assignment of appendix
procedures for the proposed new MS-DRGs.
Comment: Several commenters expressed support for the proposed
changes to the MS-DRGs for appendectomy with and without a complicated
principal diagnosis. A commenter who agreed with CMS that the average
length of stay and average costs were comparable among the appendectomy
MS-DRGs with and without a complicated principal diagnosis stated that
the data for diagnosis code K35.21 (Acute appendicitis with generalized
peritonitis, with abscess) specifically reflected a longer length of
stay and higher average costs among all the MS-DRGs for appendectomy
with complicated principal diagnosis (MS-DRGs 338, 339, and 340). The
commenter requested that CMS continue to monitor this diagnosis code.
Response: We appreciate the commenters' support and feedback. CMS
will continue to monitor and analyze the claims data for diagnosis code
K35.21.
Comment: A commenter expressed concerns about the proposed new MS-
DRGs 397, 398, and 399 no longer reflecting the differences in
complexity and costs associated with treating appendicitis, including
concerns about the potential decrease in case weight. The commenter
stated tertiary care centers may have up to 30% of patients with
complicated appendicitis and that the treatment of appendicitis with a
complicated principal diagnosis utilizes substantially more resources.
This commenter also stated specifically, patients with more complicated
disease frequently have perforated disease which contaminates the
peritoneal cavity and wounds. According to the commenter, as a result,
these patients face significantly higher risk of surgical site
infections and require longer hospitalizations in order to a receive
longer duration IV antibiotics. Finally, the commenter stated that
operations on complex patients take much longer and suggested there is
little parity with regard to these populations between major referral
centers and smaller centers of care.
Another commenter stated their belief that CMS failed to recognize
clinical best practice for treatment of patients with complicated
disease including perforation. The commenter stated that the proposed
MS-DRG changes demonstrated a lack of understanding about the
complexities of appendectomy procedures and urged CMS to maintain the
existing MS-DRGs and reassign code K35.20 to MS-DRGs 338, 339, and 340,
due to the risk of postoperative abscess formation and extended length
of hospital stay, thereby warranting classification as a complicated
diagnosis.
Another commenter who disagreed with CMS' proposal agreed that
clinically, both localized and generalized peritonitis in association
with an appendectomy requires increased levels of care, inclusive of
extensive intraoperative irrigation at the surgical site, direct
inspection or imaging of the abdomen, use of antibiotics and prolonged
monitoring, however, the commenter stated both localized and general
peritonitis are complicated appendicitis diagnoses and are clinically
different than uncomplicated appendicitis, therefore, complicated
appendicitis diagnoses should group to a complicated appendicitis MS-
DRG. The commenter recommended retaining MS-DRGs 338, 339, and 340.
Additionally, the commenter suggested CMS add four diagnoses currently
considered uncomplicated principal diagnoses: K35.20 (Acute
appendicitis with generalized peritonitis, without abscess); K35.30
(Acute appendicitis with localized peritonitis, without perforation or
gangrene); K35.31 (Acute appendicitis with localized peritonitis and
gangrene, without perforation); and K35.891 (Other acute appendicitis
without perforation, with gangrene) to MS-DRGs 338, 339, and 340 to
reflect the complicated appendectomy. The commenter further suggested
that MS-DRGs 341, 342, and 343 (Appendectomy without Complicated
Principal Diagnosis with MCC, with CC, and without CC/MCC,
respectively) only reflect the principal diagnoses of K35.80
(Unspecified acute appendicitis), K35.890 (Other acute appendicitis
without perforation or gangrene), and K36 (Other appendicitis) as they
would clinically be considered an uncomplicated appendectomy.
Response: We thank the commenters for their feedback. In response
to the commenter who expressed concerns about the potential decrease in
case weight for the proposed new MS-DRGs, we note that the relative
weights (RW) and geometric mean length of stay (GMLOS) for existing MS-
DRGs 338, 339, 340, 341, 342, and 343 have been trending downward over
the past few years as shown in the following table.
[[Page 58725]]
[GRAPHIC] [TIFF OMITTED] TR28AU23.079
In association with the proposed rule, we made available the
proposed FY 2024 relative weights and GMLOS for proposed new MS-DRGs
397, 398, and 399 as reflected in Table 5--List of Medicare Severity
Diagnosis-Related Groups (MS-DRGs), Relative Weighting Factors, and
Geometric and Arithmetic Mean Length of Stay--FY 2024 Proposed Rule
available on the CMS website at: https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/AcuteInpatientPPS.
[GRAPHIC] [TIFF OMITTED] TR28AU23.080
We believe the proposed relative weight and GMLOS for the proposed
new MS-DRGs appear to be appropriately driven by the underlying data.
While we recognize the commenter's statement that tertiary care
centers may provide treatment for up to 30% of patients with
complicated appendicitis, we note that we do not propose MS-DRG
modifications based on provider type. We also do not agree with the
commenter's statement that complicated appendicitis utilizes
substantially more resources since, as discussed in the proposed rule,
our findings reflect that cases in the complicated appendectomy MS-DRGs
are comparable to cases in the uncomplicated MS-DRGs with regard to
volume, average length of stay, and average costs.
In response to the commenter who indicated that CMS failed to
recognize clinical best practice for treatment of patients with
complicated disease including perforation, we note that our proposed
MS-DRG classification changes are not a reflection of, nor intended to
define, how providers render care for patients diagnosed with acute
appendicitis, rather, our proposals are based on a combination of data
analysis and clinical judgement. With respect to the commenter's
request that CMS reassign diagnosis code K35.20 (Acute appendicitis
with generalized peritonitis, without abscess), we note that, as
discussed in the preamble of the proposed rule and this final rule,
diagnosis code K35.20 has been expanded and is no longer valid
effective October 1, 2023, as reflected in Table 6C.--Invalid Diagnosis
Codes.
In response to the commenter who disagreed with CMS' proposal but
agreed that clinically, both localized and generalized peritonitis in
association with an appendectomy are complicated appendicitis diagnoses
and should group to a complicated appendicitis MS-DRG, we note that our
proposal reflects that both localized and generalized peritonitis in
association with an appendectomy are comparable, clinically coherent
diagnoses and should be grouped together. The MS-DRGs are a
classification system intended to group together those diagnoses and
procedures with similar
[[Page 58726]]
clinical characteristics and utilization of resources. Our proposal
also essentially reflects the commenter's suggestion to group the four
diagnoses (K35.20, K35.30, K35.31, and K35.891) that are currently
assigned to the appendectomy without complicated principal diagnosis
MS-DRGs (MS-DRGs 341, 342, and 342) together with the diagnoses that
are currently assigned to the appendectomy with complicated principal
diagnosis MS-DRGs (MS-DRGs 338, 338, and 340). Additionally, as
previously discussed, we believe our data findings and clinical review
no longer support the distinction of complicated versus uncomplicated
MS-DRGs with respect to resource utilization for acute appendicitis and
therefore, disagree with the commenter's suggestion to retain the
existing MS-DRGs and to only reflect diagnosis codes K35.80, K35.890,
and K36 in an uncomplicated MS-DRG. We note that diagnosis code K36
(Other appendicitis) is currently assigned to MS-DRGs 393, 394, and 395
(Other Digestive System Diagnoses with MCC, with CC, and without CC/
MCC, respectively), and was not specifically included or addressed in
our analysis, nor our proposal.
After consideration of the public comments we received, and for the
reasons discussed, we are finalizing our proposal to delete MS-DRGs
338, 339, 340, 341, 342, and 343 and to create MS-DRGs 397, 398, and
399 (Appendix Procedures with MCC, with CC, and without CC/MCCC,
respectively), without modification, for FY 2024. These finalized new
MS-DRGs no longer require a diagnosis in the definition of the logic
for case assignment. We are also finalizing our proposal to include the
current list of appendectomy procedures in the logic for case
assignment of appendix procedures for the finalized new MS-DRGs.
7. MDC 07 (Diseases and Disorders of the Hepatobiliary System and
Pancreas): Alcoholic Hepatitis
As stated in the FY 2024 IPPS/LTCH PPS proposed rule (88 FR 26721
through 26726), we received a request to create new MS-DRGs with a two-
way split (with MCC and without MCC) for cases reporting alcoholic
hepatitis. Alcoholic hepatitis is identified with ICD-10-CM diagnosis
codes K70.10 (Alcoholic hepatitis without ascites) and K70.11
(Alcoholic hepatitis with ascites) which are currently assigned to MS-
DRGs 432, 433, and 434 (Cirrhosis and Alcoholic Hepatitis with MCC,
with CC, and without CC/MCC, respectively) when reported as a principal
diagnosis.
Alcoholic hepatitis is characterized as an inflammatory condition
due to chronic, excessive alcohol use and is considered an acute form
of alcohol-associated liver disease (ALD). Data suggests that ALD was
responsible for over 100,000 hospitalizations in 2017 and admissions
for ALD continued to increase during the COVID-19 public health
emergency.\6\ Data also suggest that ALD may be one of the leading
causes of liver transplants in the U.S.
---------------------------------------------------------------------------
\6\ Gonzalez HC, Zhou Y, Nimri FM, Rupp LB, Trudeau S, Gordon
SC. Alcohol-related hepatitis admissions increased 50% in the first
months of the COVID-19 pandemic in the USA. Liver Int. 2022
Apr;42(4):762-764.
---------------------------------------------------------------------------
As discussed in the proposed rule, the requestor stated that
currently there are no effective therapies available to treat alcoholic
hepatitis and current treatment guidelines suggest corticosteroids,
despite increased risk of infection and minimal impact on survival
beyond 28 days. However, the requestor (manufacturer of Larsucosterol)
also indicated that epigenetic therapy is currently being studied to
address various types of acute and chronic organ injury and provided
information related to its AHFIRM (Alcohol-associated Hepatitis to
evaluate saFety and effIcacy of LaRsucosterol (DUR-928) treatMent)
Phase 2b study for patients diagnosed with alcoholic hepatitis. The FDA
granted Fast Track Designation to DUR-928 for the treatment of
alcoholic hepatitis in 2020.
The requestor stated it performed its own analysis using 2 years of
claims data, (calendar years 2018 and 2019), and its findings showed
that the patients with alcoholic hepatitis are distinct from the
typical Medicare beneficiary and that the condition disproportionately
affects younger patients that represent a small proportion of the cases
currently grouping to MS-DRGs 432, 433, and 434. According to the
requestor, the low volume of cases reporting alcoholic hepatitis have
little to no impact on the annual recalibration of the MS-DRG relative
payment weights for MS-DRGs 432, 433, and 434, resulting in
underpayments. The requestor stated its analysis of cases reporting
alcoholic hepatitis showed higher resource utilization and a longer
length of stay when compared to all cases in MS-DRGs 432, 433, and 434.
The requestor stated it applied the criteria to create subgroups for
the cases reporting alcoholic hepatitis currently grouping to MS-DRGs
432, 433, and 434 and found that the criteria for a two-way split (with
MCC and without MCC) was met. The requestor further stated that
splitting out the cases reporting alcoholic hepatitis from MS-DRGs 432,
433, and 434 would enable more accurate payment of these cases and
support research that is specific to alcoholic hepatitis distinct from
cirrhosis.
The logic for case assignment to MS-DRGs 432, 433, and 434 is
comprised of the following diagnosis codes.
[[Page 58727]]
[GRAPHIC] [TIFF OMITTED] TR28AU23.081
As stated in the proposed rule, we analyzed claims data from the
September 2022 update of the FY 2022 MedPAR file for MS-DRGs 432, 433,
and 434 and cases reporting any one of the listed diagnoses as a
principal diagnosis. We noted that if a diagnosis code is not listed it
is because there were no cases found reporting that code in the
respective MS-DRG. The findings from our analysis are shown in the
following table.
[GRAPHIC] [TIFF OMITTED] TR28AU23.082
[[Page 58728]]
[GRAPHIC] [TIFF OMITTED] TR28AU23.083
[[Page 58729]]
[GRAPHIC] [TIFF OMITTED] TR28AU23.084
Based on our initial analysis for cases in MS-DRGs 432, 433, and
434, the data clearly demonstrate that there are several diagnoses,
other than the two diagnoses identified by the requestor (codes K70.10
and K70.11) with increased resource utilization when compared to the
average length of stay and average costs of all cases in MS-DRGs 432,
433, and 434.
We stated in the proposed rule that the data show cases in MS-DRG
432 reporting diagnosis codes K70.11, K70.31, K70.40, K70.41, K74.3, or
K74.5 as a principal diagnosis have a longer average length of stay
(9.1 days, 7.5 days, 8.1 days, 8.7 days, 7.3 days, and 8.2 days,
respectively versus 6.8 days) and higher average costs ($20,727,
$17,694, $19,277, $22,530, $18,020, and $16,569, respectively versus
$16,532) compared to the average length of stay and the average costs
for all the cases in MS-DRG 432. We noted that the cases reporting
diagnosis codes K70.10, K74.4, or K74.69 as a principal diagnosis also
have a longer average length of stay (7.4 days, 7.5 days, and 6.9 days,
respectively versus 6.8 days) compared to all the cases in MS-DRG 432,
however, the average costs of these cases are lower ($14,710, $15,324
and $16,501, respectively versus $16,532) compared to the average costs
for all the cases.
For MS-DRG 433, the cases reporting diagnosis codes K70.11, K70.30,
K70.31, K70.40, or K70.9 as a principal diagnosis have a longer average
length of stay (5.0 days, 4.5 days, 4.4 days, 4.6 days, and 4.8 days,
respectively versus 4.3 days) and comparable average costs ($10,085,
$9,343, $9,548, $9,066, and $11,893, respectively versus $9,007)
compared to the average length of stay and the average costs for all
the cases in MS-DRG 433. We noted that the cases reporting diagnosis
code K70.10 as a principal diagnosis also have a longer average length
of stay (4.8 days versus 4.3 days) compared to all the cases in MS-DRG
433, however, the average costs of these cases are lower ($8,436 versus
$9,007) compared to the average costs for all the cases in the MS-DRG.
Lastly, for MS-DRG 434, the cases reporting diagnosis codes K70.31,
K74.3, or K74.60 as a principal diagnosis have a longer average length
of stay (3 days, 4.2 days, and 2.6 days, respectively versus 2.8 days)
and higher average costs ($6,348, $8,485, and $5,862, respectively
versus $5,825) compared to the average length of stay and the average
costs for all the cases in MS-DRG 434.
The data also show that there is significantly more case volume for
several of the other diagnoses compared to the case volume of the two
diagnoses (K70.10 and K70.11) associated with the request to create new
MS-DRGs. We identified diagnosis code K70.31 (Alcoholic cirrhosis of
liver with ascites) to be the most prevalent diagnosis with respect to
case volume reported across MS-DRGs 432, 433, and 434. For example, as
shown in the table, we found 5,687 cases in MS-DRG 432 reporting
diagnosis code K70.31 as a principal diagnosis compared to 269 cases
reporting diagnosis code K70.10 and 244 cases reporting diagnosis code
K70.11. For MS-DRG 433, we found 2,825 cases reporting diagnosis code
K70.31 as a principal diagnosis compared to 309 cases reporting
diagnosis code K70.10 and 173 cases reporting diagnosis code K70.11.
Lastly, for MS-DRG 434, we found 179 cases reporting diagnosis code
K70.31 as a principal diagnosis compared to 41 cases reporting
diagnosis code K70.10 and 8 cases reporting diagnosis code K70.11.
As discussed in the proposed rule, following our initial review of
the claims data for the cases reporting any one of the listed diagnoses
as a principal diagnosis that are included in the logic for case
assignment to MS-DRGs 432, 433, and 434, we performed additional
analyses to focus on the cases specifically reporting diagnosis code
K70.10 or K70.11 as a principal diagnosis in response to the request to
create new MS-DRGs with a two-way split (with and without MCC,
respectively). The findings from our analysis are shown in the
following table.
[[Page 58730]]
[GRAPHIC] [TIFF OMITTED] TR28AU23.085
The data show that the 513 cases reporting alcoholic hepatitis
without or with ascites in MS-DRG 432 have a longer average length of
stay (8.2 days versus 6.8 days) and higher average costs ($17,572
versus $16,532). For MS-DRG 433, the data show that the 482 cases
reporting alcoholic hepatitis without or with ascites have a longer
average length of stay (4.9 days versus 4.3 days) and a difference in
average costs of $21 ($9,028 versus $9,007). For MS-DRG 434, the 49
cases reporting alcoholic hepatitis without or with ascites have a
shorter length of stay (2.4 days versus 2.8 days) and lower average
costs ($5,544 versus $5,825).
We stated in the proposed rule that, based on the results of our
review and our analysis of the claims data for cases reporting a
principal diagnosis of alcoholic hepatitis without or with ascites
(codes K70.10 or K70.11), we believe the cases demonstrate similar
patterns of resource intensity in comparison to the other cases in MS-
DRGs 432, 433, and 434. We also stated we believed that these diagnoses
are clinically coherent with the other diagnoses currently assigned to
MS-DRGs 432, 433, and 434. In addition, we stated that while we
recognize the concerns expressed by the requestor for this subset of
patients with respect to the younger population and the lower volume of
cases, we noted that the logic for case assignment to MS-DRGs 432, 433,
and 434 includes clinically related diagnoses that differ in severity
and resource intensity with alcoholic hepatitis being at the lowest end
of the severity spectrum. Therefore, we proposed to maintain the
structure of MS-DRGs 432, 433, and 434 for FY 2024.
Comment: The majority of commenters agreed with the proposal to
maintain the structure of MS-DRGs 432, 433, and 434 for FY 2024 given
the data and information provided.
Response: We thank the commenters for their support.
Comment: A commenter (the requestor) who disagreed with the
proposal stated that alcoholic hepatitis (AH) is a distinct clinical
pathological entity that is different from common forms of
alcoholic[hyphen]liver disease (ALD) and that liver failure in severe
AH is driven by loss of hepatocyte nuclear factor 4 alpha (HNF4[alpha])
function and liver[hyphen]specific changes distinct from those seen in
other forms of ALD. The commenter expressed concerns regarding both the
analysis conducted by CMS and the interpretation of the findings.
Specifically, the commenter stated that analyses by principal diagnoses
comparing average length of stay and average costs should not be used
as the primary determinant in assessing resource use differences,
although the commenter acknowledged some principal diagnoses findings
will be above, and some will be below, when compared to an average.
According to the commenter, the CMS analyses also did not account for
the differences between AH and non-AH cases and masked resource use
differences. Using data from calendar years 2018 through 2022, the
commenter provided an updated analysis for MS-DRG 432 while combining
its analyses for MS-DRGs 433 and 434, separating AH cases from non-AH
and comparing average length of stay among the cases.
Response: The MS-DRGs were developed as a patient classification
scheme consisting of patients who are similar clinically and with
regard to their consumption of hospital resources. The concept of
clinical coherence requires that the patient characteristics included
in the definition of each MS-DRG relate to a common organ system or
etiology and that a specific medical specialty should typically provide
care to the patients in the MS-DRG. While all patients are unique,
groups of patients have diagnostic and therapeutic attributes in common
that determine their level of resource intensity. Similar resource
intensity means that the resources used are relatively consistent
across the patients in each MS-DRG. However, some variation in resource
intensity will remain among the patients in each MS-DRG. In other
words, the definition of a MS-DRG will not be so specific that every
patient is identical, rather the level of variation is relatively
understood and predictable. We continue to believe, as stated
previously, that AH diagnoses are clinically coherent with the other
diagnoses currently assigned to MS-DRGs 432, 433, and 434.
With respect to the updated analyses that was submitted, we
appreciate the commenter's feedback. However, we note that the
commenter did not uniquely identify and distinguish the AH cases from
non-AH cases with specific ICD-10-CM codes that it was considering
under its analyses, nor did the analysis include any case counts. As
such, it was not clear specifically what diagnoses were included in the
commenter's data analysis.
With respect to the commenter's assertion that the CMS analyses by
principal diagnoses comparing average length of stay and average costs
was used as the primary determinant in assessing resource use
differences, we note that while the logic for case assignment to MS-
DRGs 432, 433, and 434 is driven by the reporting of any one of the
listed diagnoses as a principal diagnosis, we also consider other
factors in deciding whether to propose to make further modifications to
the MS-DRGs for particular circumstances brought to
[[Page 58731]]
our attention, as described in the preamble of the proposed rule (88 FR
26673) and discussed in prior rulemaking (for example, severity of
illness, treatment difficulty, complexity of service, etc.).
In response to the commenter's statement that the CMS analyses did
not account for the differences between AH and non-AH cases masking
resource use differences, we note that the analysis we performed and
made available in the proposed rule to address the MS-DRG request
listed the number of cases (volume), average length of stay and average
costs of all cases, as well as detailed data for each diagnosis code
defined in the logic for case assignment to MS-DRGs 432, 433, and 434
when reported as the principal diagnosis. Therefore, the data findings
for what we believe the commenter is referring to as non-AH cases were
reflected and the ability to perform a comparison between AH and non-AH
was made available. Specifically, in review of the findings for MS-DRG
432, as displayed in the proposed rule and this final rule, the number
of non-AH cases (e.g., cases reporting a principal diagnosis other than
diagnosis code K70.10 or K70.11) can be calculated by subtracting the
total number of cases reporting AH from the total number of all cases
in the MS-DRG. For example, the total number of cases found in MS-DRG
432 is 16,836 and the total number of cases reporting AH is 513,
therefore, the number of non-AH cases is 16,323 (16,836-513 = 16,323),
with an average length of stay of 6.8 days and average costs of
$16,499, resulting in a difference of 1.4 days for the average length
of stay and a difference in average costs of $1,073 for AH and non-AH
cases. For MS-DRG 433, the number of non-AH cases can be calculated as
7,954 (8,436-482 = 7,954) with an average length of stay of 4.3 days
and average costs of $9,006, resulting in a difference of .6 days for
the average length of stay and a difference in average costs of $22 for
AH and non-AH cases. Lastly, for MS-DRG 434, the number of non-AH cases
can be calculated as 309 (358-49 = 309) with an average length of stay
of 2.9 days and average costs of $5,870, resulting in a difference of
.5 days for the average length of stay and a difference in average
costs of $326 for AH and non-AH cases. We illustrate these findings in
the following table.
[GRAPHIC] [TIFF OMITTED] TR28AU23.086
After consideration of the public comments we received, and for the
reasons discussed, we are finalizing our proposal to maintain the
structure of MS-DRGs 432, 433, and 434, without modification, for FY
2024.
We also note, as discussed in section II.C.1.b. of the preamble of
proposed rule, using the December 2022 update of the FY 2022 MedPAR
file, we analyzed how applying the NonCC subgroup criteria to all MS-
DRGs currently split into three severity levels would affect the MS-DRG
structure beginning in FY 2024. Findings from our analysis indicated
that MS-DRGs 432, 433, and 434, as well as approximately 44 other base
MS-DRGs, would potentially be subject to change based on the three-way
severity level split criterion finalized in FY 2021. We referred the
reader to Table 6P.10b associated with the proposed rule (which is
available on the CMS website at: https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/AcuteInpatientPPS) for the list of the 135 MS-
DRGs that would potentially be subject to deletion and the list of the
86 new MS-DRGs that would potentially be created under this policy if
the NonCC subgroup criteria was applied.
Comment: A commenter expressed support for the analysis CMS
performed to determine how applying the NonCC subgroup criteria would
potentially impact MS-DRGs currently split into three severity levels.
Specifically, the commenter stated application of the NonCC subgroup
criteria for MS-DRGs 432, 433, and 434 is reflective of the MS-DRG
structure that was requested for AH.
Response: We thank the commenter for their support. We refer the
reader to section II.C.1.b. of the preamble of this final rule for
related discussion regarding our finalization of the expansion of the
criteria to include the NonCC subgroup and our finalization of the
proposal to continue to delay application of the NonCC subgroup
criteria to existing MS-DRGs with a three-way severity level split for
FY 2024.
8. MDC 08 (Diseases and Disorders of the Musculoskeletal System and
Connective Tissue): Spinal Fusion
As discussed in the FY 2024 IPPS/LTCH PPS proposed rule (88 FR
26726 through 26729), we received a request to
[[Page 58732]]
reassign cases reporting spinal fusion procedures utilizing an
aprevoTM customized interbody fusion device from the lower
severity MS-DRG 455 (Combined Anterior and Posterior Spinal Fusion
without CC/MCC) to the higher severity MS-DRG 453 (Combined Anterior
and Posterior Spinal Fusion with MCC), from the lower severity MS-DRG
458 (Spinal Fusion Except Cervical with Spinal Curvature, Malignancy,
Infection or Extensive Fusions without CC/MCC) to the higher severity
level MS-DRG 456 (Spinal Fusion Except Cervical with Spinal Curvature,
Malignancy, Infection or Extensive Fusions with MCC) when a diagnosis
of malalignment is reported, and from MS-DRGs 459 and 460 (Spinal
Fusion Except Cervical with MCC and without MCC, respectively) to MS-
DRG 456.
We noted that the AprevoTM Intervertebral Body Fusion
Device technology was discussed in the FY 2022 IPPS/LTCH PPS proposed
(86 FR 25361 through 25365) and final rules (86 FR 45127 through 45133)
with respect to a new technology add-on payment application and was
approved for add-on payments for FY 2022. We also noted that, as
discussed in the FY 2023 IPPS/LTCH PPS final rule (87 FR 49468 through
49469), CMS finalized the continuation of the new technology add-on
payments for this technology for FY 2023.
In support of the new technology add-on payment application that
was submitted for FY 2022 consideration, we received a request and
proposal to create new ICD-10-PCS codes to differentiate spinal fusion
procedures that utilize an aprevoTM customized interbody
fusion device, which was discussed at the March 9-10, 2021 ICD-10
Coordination and Maintenance Committee meeting. As a result, effective
October 1, 2021 (FY 2022), we implemented 12 new ICD-10-PCS procedure
codes to identify and describe spinal fusion procedures utilizing the
aprevoTM customized interbody fusion device as shown in the
following table.
[GRAPHIC] [TIFF OMITTED] TR28AU23.087
Each of the listed procedure codes are assigned to MDC 01 (Diseases
and Disorders of the Nervous System) in MS-DRGs 028, 029, and 030
(Spinal Procedures with MCC, with CC or Spinal Neurostimulators, and
without CC/MCC, respectively) and to MDC 08 (Diseases and Disorders of
the Musculoskeletal System and Connective Tissue) in MS-DRGs 453, 454,
and 455 (Combined Anterior and Posterior Spinal Fusion with MCC, with
CC, and without CC/MCC, respectively), MS-DRGs 456, 457, and 458
(Spinal Fusion Except Cervical With Spinal Curvature, Malignancy,
Infection or Extensive Fusions with MCC, with CC, and without CC/MCC,
respectively), and MS-DRGs 459 and 460 (Spinal Fusion Except Cervical
with MCC and without MCC, respectively).
As stated in the proposed rule, the requestor (the manufacturer of
aprevoTM customized interbody spinal fusion devices)
expressed concerns that findings from its analysis of claims data for
spinal fusion MS-DRGs 453, 454, 455, 456, 457, 458, 459, and 460 from
the first half of FY 2022 indicate there may be unintentional miscoded
claims from providers with whom they do not have an explicit
relationship. Specifically, the requestor stated that a subset of the
facilities identified in its analysis are not customers to whom the
aprevoTM custom-made device was provided. The volume of
cases initially identified by the requestor in its analysis totaled 89
cases, however, upon
[[Page 58733]]
eliminating the provider claims from the facilities that are not a
current client, the resulting volume was 14 cases. The requestor stated
that subsequently, after another quarter's data became available from
current clients for cases reporting the performance of a spinal fusion
procedure utilizing an aprevoTM customized interbody spinal
fusion device, they identified an additional 16 cases for a total of 30
cases, all of which were assigned to MS-DRGs 453, 454, and 455.
Upon further review of the data, the requestor stated it found that
cases reporting the performance of a spinal fusion procedure utilizing
an aprevoTM customized interbody spinal fusion device had
higher average costs in comparison to the average costs of all the
cases in the highest severity level ``with MCC'' MS-DRGs 453 and 456.
According to the requestor, this finding suggested that the use of the
device impacts intensity of resources such that the cases reporting the
performance of a spinal fusion procedure utilizing an
aprevoTM customized interbody spinal fusion device merit
reassignment to the highest severity level ``with MCC'' MS-DRGs (MS-
DRGs 453 and 456). The requestor asserted that while spinal disorders
impact approximately 65 million patients in the U.S., the patients
undergoing spine surgery with an aprevoTM customized
interbody spinal fusion device are those with irreversible,
debilitating conditions. In addition, the requestor stated that since
the cases reporting the performance of a spinal fusion procedure
utilizing an aprevoTM customized interbody spinal fusion
device already appear to map to the most resource intensive MS-DRGs for
spinal procedures, there is no other alternative assignment for these
procedures, with the exception of a new MS-DRG. Lastly, the requestor
maintained that reassigning cases reporting the performance of a spinal
fusion procedure utilizing an aprevoTM customized interbody
spinal fusion device to the ``with MCC'' level aligns with CMS's
factors that are considered in review of MS-DRG classification change
requests, including treatment difficulty, complexity of service, and
utilization of resources.
As discussed in the proposed rule, we analyzed data from the
September 2022 update of the FY 2022 MedPAR file for MS-DRGs 453, 454,
455, 456, 457, 458, 459, and 460 and cases reporting any one of the
previously listed procedure codes describing utilization of an
aprevoTM customized interbody spinal fusion device. Our
findings are shown in the following table.
[GRAPHIC] [TIFF OMITTED] TR28AU23.088
We found the majority of cases reporting the performance of a
spinal fusion procedure utilizing an aprevoTM customized
interbody spinal fusion device in MS-DRGs 453, 454, and 455 with a
total of 159 cases (17 + 75 + 67 = 159) with an average length of stay
of 4.1 days and average costs of $66,847. The 17 cases identified in
MS-DRG 453 appear to have a comparable average length of stay and
comparable average costs compared to all the cases in MS-DRG 453 with a
difference of 1.0 day and a difference in average costs of $1,383 for
the cases reporting the performance of a spinal fusion procedure
utilizing an aprevoTM customized interbody spinal fusion
device. The 75 cases found in MS-DRG 454 have an identical average
length of stay of 4.4 days in comparison to all the cases in MS-DRG
454, however, the difference in average costs is $21,067 ($75,294-
$54,227 = $21,067) for the cases reporting the performance of a spinal
fusion procedure utilizing an aprevoTM customized interbody
spinal fusion device. The 67 cases found in MS-DRG 455 also have an
identical average length of stay of 2.7 days in comparison to all the
cases in MS-DRG 455, however, the difference in average costs is
$13,604 ($54,287-$40,683 = $13,604) for the cases reporting the
performance of a spinal fusion procedure utilizing an
aprevoTM customized interbody spinal fusion device. As shown
in the table, there were no cases found to report utilization of an
aprevoTM customized interbody spinal fusion device in MS-DRG
456. For MS-DRG 457, the 2 cases found to report utilization of an
aprevoTM customized interbody spinal fusion device appear to
be outliers with a difference in average costs of $105,032 ($158,782-
$53,750 = $105,032) and a shorter average length of stay (3.5 days
versus 6.4 days) in comparison to all the cases in MS-DRG 457. For MS-
DRG 458, we found 1 case reporting utilization of an
aprevoTM customized interbody spinal fusion device with an
average length of stay almost three times the average length of stay of
all the cases in MS-DRG 458 (12 days versus 3.5 days) and average costs
that are twice as
[[Page 58734]]
high ($91,672 versus $40,343) compared to the average costs of all the
cases in MS-DRG 458. For MS-DRG 459, the 2 cases reporting utilization
of an aprevoTM customized interbody spinal fusion device had
a shorter average length of stay (5 days versus 9.8 days) compared to
the average length of stay of all the cases in MS-DRG 459 with a
difference in average costs of $3,697 ($57,039-$53,342 = $3,697). For
MS-DRG 460, the 30 cases reporting utilization of an
aprevoTM customized interbody spinal fusion device had a
longer average length of stay (4.5 days versus 3.5 days) compared to
the average length of stay of all the cases in MS-DRG 460 with a
difference in average costs of $14,762 ($46,683-$31,921 = $14,762).
As discussed in the proposed rule, the requestor expressed concerns
that there may be unintentional miscoded claims from providers with
whom they do not have an explicit relationship. In the proposed rule,
we noted that following the submission of the request for the FY 2024
MS-DRG classification change for cases reporting the performance of a
spinal fusion procedure utilizing an aprevoTM customized
interbody spinal fusion device, this same requestor (the manufacturer
of aprevoTM customized interbody spinal fusion devices)
submitted a code proposal requesting a revision to the title of the
current procedure codes that identify and describe a spinal fusion
procedure utilizing an aprevoTM customized interbody spinal
fusion device for consideration as an agenda topic to be discussed at
the March 7-8, 2023 ICD-10 Coordination and Maintenance Committee
meeting. The requestor stated its belief that the term ``customizable''
as currently reflected in each of the 12 procedure code descriptions is
potentially misunderstood by providers to encompass expandable
interbody fusion cages that have been available for several years and
which were not approved for new technology add-on payment as was the
aprevoTM customized interbody spinal fusion device.
According to the requestor, these other interbody fusion devices do not
require the same patient specific surgical plan coordination as the
aprevoTM customized interbody spinal fusion device and do
not offer the personalized fit that matches the topography of a
patient's bone. Therefore, in an effort to encourage appropriate
reporting for cases where an aprevoTM customized interbody
spinal fusion device has been utilized in the performance of a spinal
fusion procedure, the requestor provided alternative terminology for
consideration.
We stated in the proposed rule that the proposal to revise the code
title was presented and discussed as an Addenda item at the March 7-8,
2023 ICD-10 Coordination and Maintenance Committee meeting. We referred
the reader to the CMS website at: https://www.cms.gov/Medicare/Coding/ICD10/C-and-M-Meeting-Materials for additional detailed information
regarding the request, including a recording of the discussion and the
related meeting materials. Public comments in response to the code
proposal were due by April 7, 2023.
We noted in the proposed rule that the diagnosis and procedure code
proposals that are presented at the March ICD-10-CM Coordination and
Maintenance Committee meeting for an October 1 implementation (upcoming
FY) are not finalized in time to include 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 or Table 6F.--Revised Procedure Code Titles in association
with the proposed rule. Accordingly, we stated that any update to the
title of the procedure codes describing utilization of an
aprevoTM customized interbody spinal fusion device, if
finalized following the March meeting, would be reflected in Table
6F.--Revised Procedure Code Titles associated with the final rule for
FY 2024.
As discussed in the proposed rule, based on our review of this
issue and our analysis of the claims data, we agreed that the findings
appear to indicate that cases reporting the performance of a procedure
utilizing an aprevoTM customized interbody spinal fusion
device reflect a higher consumption of resources. However, due to the
concerns expressed with respect to suspected inaccuracies of the coding
and therefore, reliability of the claims data, we stated we believed
further review is warranted. In addition, as previously discussed in
the proposed rule and this final rule, the proposal to revise the
current code descriptions was presented at the March 2023 ICD-10
Coordination and Maintenance Committee meeting and if finalized, the
revised coding may improve the reporting of procedures where an
aprevoTM customized interbody spinal fusion device is
utilized. In the proposed rule, we also stated we believed that because
this technology is currently receiving new technology add-on payments,
it would be advantageous to allow for more claims data to be analyzed
under the application of the policy in consideration of any future
modifications to the MS-DRGs for which the technology is utilized in
the performance of a spinal fusion procedure.
In the proposed rule, we noted that with regard to possible future
action, we will continue to monitor the claims data for resolution of
the potential coding issues identified by the requestor. We also noted
that because the procedure codes that we analyzed and presented
findings for in the FY 2024 IPPS/LTCH PPS proposed rule may be revised
based on the proposal as discussed at the March 2023 ICD-10
Coordination and Maintenance Committee meeting, the claims data that we
examine in the future may change. Additionally, we stated that we will
continue to collaborate with the AHA as one of the four Cooperating
Parties through the AHA's Coding Clinic for ICD-10-CM/PCS and provide
further education on spinal fusion procedures utilizing an
aprevoTM customized interbody spinal fusion device and the
proper reporting of the ICD-10-PCS spinal fusion procedure codes. Until
these potential coding inaccuracies are addressed and additional,
future analysis of the procedures being reported in the claims data can
occur, we stated we believed it would be premature to propose any MS-
DRG modifications for spinal fusion procedures utilizing an
aprevoTM customized interbody spinal fusion device at this
time. For these reasons, we proposed to maintain the current structure
of MS-DRGs 453, 454, 455, 456, 457, 458, 459, and 460 for FY 2024.
Comment: Commenters supported our proposal to maintain the current
structure of MS-DRGs 453, 454, 455, 456, 457, 458, 459, and 460 for FY
2024.
Response: We thank the commenters for their support.
Comment: Several commenters (orthopedic surgeons) who expressed
support for the requested reassignment of cases reporting the
utilization of an aprevoTM customized interbody spinal
fusion device stated how important these devices are for their patients
because it optimizes patient alignment, is patient-specific, and
therefore, beneficial for situations where a patient's normal anatomy
does not allow for traditional implants. These commenters stated that
without reassignment to the higher severity MS-DRGs their facilities
would not allow use of the technology on the population of Medicare
patients they serve.
Response: We appreciate the commenters' feedback. As discussed in
the proposed rule, based on our review
[[Page 58735]]
and analysis of the claims data, we agreed that the findings appear to
indicate that cases reporting the performance of a procedure utilizing
an aprevoTM customized interbody spinal fusion device
reflect a higher consumption of resources. We also note that the
proposal to revise the current code descriptions that was presented at
the March 2023 ICD-10 Coordination and Maintenance Committee meeting
was finalized, as reflected in the FY 2024 ICD-10-PCS Code Update files
available via the CMS website at: https://www.cms.gov/medicare/icd-10/2024-icd-10-pcs as well as in Table 6F.--Revised Procedure Code
Titles--FY 2024 associated with this final rule and available via the
CMS website at: https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/AcuteInpatientPPS.
As also previously discussed, because of the concerns with respect
to suspected inaccuracies of the current coding, we continue to believe
additional review of claims data is warranted and would be informative
as we continue to consider this technology for future rulemaking.
Accurate and complete documentation within the medical record is
important for patient management, outcome measurement, and quality
improvement, as well as payment accuracy. We anticipate that the
revisions to the code title for the aprevoTM customized
interbody spinal fusion device will encourage more accurate reporting
of procedures and improve the quality and reliability of the data. We
also continue to believe that because this technology is currently
receiving new technology add-on payments and will continue to receive
new technology add-on payments, additional claims data analysis of the
cases under the application of the policy in consideration of any
future modifications to the MS-DRGs for which the technology is
utilized in the performance of a spinal fusion procedure would be
beneficial.
As we have stated in prior rulemaking, we rely on providers to
assess the needs of their patients and provide the most appropriate
treatment. It is not appropriate for facilities to deny treatment to
beneficiaries needing a specific type of therapy or treatment that
potentially involves increased costs (86 FR 44847). It would also not
be appropriate to consider modifications to the MS-DRG assignment of
cases reporting the performance of a procedure that identifies and
describes a specific technology solely as an incentive for providers to
purchase and utilize one technology over another.
After consideration of the public comments we received, and for the
reasons discussed, we are finalizing our proposal to maintain the
structure of MS-DRGs 453, 454, 455, 456, 457, 458, 459, and 460,
without modification, for FY 2024.
9. MDC 11 (Diseases and Disorders of the Kidney and Urinary Tract):
Complications of Arteriovenous Fistulas and Shunts
In the FY 2024 IPPS/LTCH PPS proposed rule (88 FR 26729 through
26733), we discussed a request we received to add eight ICD-10-CM
diagnosis codes to the list of principal diagnoses assigned to MS-DRGs
673, 674, and 675 (Other Kidney and Urinary Tract Procedures with MCC,
with CC, and without CC/MCC, respectively) in MDC 11 (Diseases and
Disorders of the Kidney and Urinary Tract) when reported with procedure
codes describing the insertion of totally implantable vascular access
devices (TIVADs) and tunneled vascular access devices. The list of
eight ICD-10-CM diagnosis codes submitted by the requestor, as well as
their current MDC assignments, are found in the table:
[GRAPHIC] [TIFF OMITTED] TR28AU23.089
As noted in the proposed rule, in order to be treated with
dialysis, a procedure that replaces kidney function when the organs
fail, a connection must be established between the dialysis equipment
and the patient's bloodstream. To establish long-term hemodialysis
access, an arteriovenous (AV) fistula or an AV shunt can be surgically
created. An AV fistula is created by suturing an artery directly to a
vein, generally in the wrist, forearm, inner elbow or upper arm. AV
fistulas usually require from 8 to 12 weeks for maturation prior to
initial use. AV shunts, also called AV grafts, are created by
connecting an artery and a vein using a graft made of synthetic
material. AV shunts do not require maturation, as AV fistulas do, and
they can be used for hemodialysis in as little as 24 hours after
creation depending upon the type of graft that is used. The requestor
noted that diagnosis codes that describe complications of dialysis
catheters currently are in the list of qualifying principal diagnoses
in MS-DRGs 673, 674, and 675 when reported with procedure codes
describing the insertion of TIVADs or tunneled vascular access devices;
therefore, according to the requestor, diagnosis codes that describe
complications of arteriovenous fistulas and shunts should reasonably be
added.
We stated in the proposed rule that to begin our analysis, we
reviewed the GROUPER logic for MS-DRGs 673, 674, and 675 including the
special logic in MS-DRGs 673, 674, and 675 for certain MDC 11 diagnoses
reported with procedure codes for the insertion of tunneled or totally
implantable vascular access devices. We refer the reader to the ICD-10
MS-DRG Definitions Manual Version 40.1, which is available on the CMS
website at: https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/AcuteInpatientPPS/MS-DRG-Classifications-and-Software for
complete documentation of the GROUPER logic for MS-DRGs 673, 674, and
675.
As discussed in the FY 2003 IPPS/LTCH PPS final rule (67 FR 49993
through 49994), the procedure code for the insertion of totally
implantable
[[Page 58736]]
vascular access devices was added to the GROUPER logic of DRG 315
(Other Kidney and Urinary Tract O.R. Procedures), the predecessor DRG
of MS-DRGs 673, 674, and 675, when combined with principal diagnoses
specifically describing renal failure, recognizing that inserting these
devices as an inpatient procedure for the purposes of hemodialysis can
lead to higher average charges and longer lengths of stay for those
cases. In the FY 2021 IPPS/LTCH PPS final rule (85 FR 58511 through
58517), we discussed a similar request to add 29 ICD-10-CM diagnosis
codes to the list of principal diagnoses assigned to MS-DRGs 673, 674,
and 675. In the FY 2021 IPPS/LTCH PPS final rule, we finalized the
assignment of diagnosis codes that describe diabetes mellitus with
diabetic chronic kidney disease, codes that describe complications of
kidney transplant and codes that describe mechanical complications of
vascular dialysis catheters to the list of qualifying principal
diagnoses in MS-DRGs 673, 674, and 675 and stated that we believed the
insertion of TIVADs or tunneled vascular access devices for the
purposes of hemodialysis was clinically related to these diagnosis
codes. We stated that for clinical coherence, the cases reporting these
diagnoses should be grouped with the subset of cases that report the
insertion of totally implantable vascular access devices or tunneled
vascular access devices as an inpatient procedure for the purposes of
hemodialysis for renal failure.
As discussed in the FY 2024 IPPS/LTCH proposed rule, we reviewed
the eight diagnosis codes submitted by the requestor. Diagnosis codes
T82.510A, T82.511A, T82.520A, T82.521A, T82.530A, T82.531A, T82.590A,
and T82.591A describe mechanical complications of arteriovenous
fistulas and shunts and are currently assigned to MDC 05 (Diseases and
Disorders of the Circulatory System). The eight diagnosis codes would
require reassignment to MDC 11 in MS-DRGs 673, 674, and 675 to group
with the subset of cases that report the insertion of totally
implantable vascular access devices or tunneled vascular access devices
as an inpatient procedure for the purposes of hemodialysis for renal
failure. We examined claims data from the September 2022 update of the
FY 2022 MedPAR file for all cases reporting procedures describing the
insertion of TIVADs or tunneled vascular access devices with a
principal diagnosis describing mechanical complications of
arteriovenous fistulas and shunts and compared these data to cases in
MS-DRGs 673, 674 and 675. The following table shows our findings:
[GRAPHIC] [TIFF OMITTED] TR28AU23.090
As shown in the table, there were 13,904 cases in MS-DRG 673 with
an average length of stay of 12.1 days and average costs of $31,946.
There were 748 cases reporting a principal diagnosis describing
mechanical complications of arteriovenous fistulas and shunts, with a
secondary diagnosis of MCC, and a procedure code for the insertion of a
TIVAD or tunneled vascular access device with an average length of stay
of 6 days and average costs of $24,467. There were 5,532 cases in MS-
DRG 674 with an average length of stay of 7.8 days and average costs of
$20,702. There was one case reporting a principal diagnosis describing
mechanical complications of arteriovenous fistulas and shunts, with a
secondary diagnosis of CC, and a procedure code for the insertion of a
TIVAD or tunneled vascular access device with a length of stay of 3
days and costs of $6,418. There were 303 cases in MS-DRG 675 with an
average length of stay of 3.6 days and average costs of $13,343. There
were zero cases reporting a principal diagnosis describing mechanical
complications of arteriovenous fistulas and shunts, without a secondary
diagnosis of CC or MCC, and a procedure code for the insertion of a
TIVAD or tunneled vascular access device. We note that the average
length of stay and average costs of cases reporting a principal
diagnosis describing mechanical complications of arteriovenous fistulas
and shunts and the insertion of a TIVAD or a tunneled
[[Page 58737]]
vascular access device are lower than for all cases in MS-DRGs 673 and
674, respectively.
To further examine the impact of moving the eight MDC 05 diagnoses
into MDC 11, in the proposed rule, we stated we analyzed claims data
for cases reporting an O.R. procedure assigned to MDC 05 and a
principal diagnosis describing mechanical complications of
arteriovenous fistulas and shunts. Our findings are reflected in the
following table:
[GRAPHIC] [TIFF OMITTED] TR28AU23.091
We noted in the proposed rule that 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''. As shown in the table, if we were to move
the eight diagnosis codes describing mechanical complications of
arteriovenous fistulas and shunts from MDC 05 to MDC 11, 1,581 cases
would be assigned to the surgical class referred to as ``unrelated
operating room procedures'' as an unintended consequence. We stated
that the data also indicates that there were more cases that reported
an O.R. procedure assigned to MDC 05 with a principal diagnosis
describing mechanical complications of arteriovenous fistulas and
shunts than there were cases reporting a principal diagnosis describing
mechanical complications of arteriovenous fistulas and shunts and a
procedure code for the insertion of a TIVAD or tunneled vascular access
device (1,581 cases versus 749 cases) demonstrating that inpatient
admissions for mechanical complications of arteriovenous fistulas and
shunts more typically have an O.R. procedure assigned to MDC 05
performed.
We further stated we also reviewed the cases reporting an O.R.
procedure assigned to MDC 05 and a principal diagnosis describing
mechanical complications of arteriovenous fistulas and shunts to
identify the top 10 O.R. procedures assigned to MDC 05 that were
reported within the claims data for these cases. Our findings are shown
in the following table:
[[Page 58738]]
[GRAPHIC] [TIFF OMITTED] TR28AU23.092
As noted previously, if we were to move the eight diagnosis codes
describing mechanical complications of arteriovenous fistulas and
shunts to MDC 11, cases reporting one of the O.R. procedures assigned
to MDC 05 shown in the table would be assigned to the surgical class
referred to as ``unrelated operating room procedures'' as an unintended
consequence.
Based on the results of our analysis, we stated we did not support
adding the eight diagnosis codes that describe mechanical complications
of arteriovenous fistulas and shunts to the special logic in MS-DRGs
673, 674, and 675. As discussed previously, these diagnosis codes are
assigned to MDC 05 (Diseases and Disorders of the Circulatory System).
In the proposed rule, we noted that patients can sometimes require the
insertion of tunneled or totally implantable vascular access devices
for hemodialysis while surgically created AV fistulas or AV shunts are
unable to be accessed due to mechanical complications, however more
often these mechanical complications related to AV fistulas or AV
shunts require inpatient admission for vascular surgery to be
effectively treated. We stated we believed that the eight diagnosis
codes describing mechanical complications of arteriovenous fistulas and
shunts are most clinically aligned with the diagnosis codes assigned to
MDC 05 (where they are currently assigned). We also stated we believed
it would not be appropriate to move these diagnoses into MDC 11 because
it would inadvertently cause cases reporting the eight diagnosis codes
that describe mechanical complications of arteriovenous fistulas and
shunts with O.R. procedures assigned to MDC 05 to be assigned to an
unrelated MS-DRG.
Therefore, for the reasons discussed, we did not propose to add the
following eight ICD-10-CM codes to the list of principal diagnosis
codes for MS-DRGs 673, 674, and 675 when reported with a procedure code
describing the insertion of a TIVAD or a tunneled vascular access
device: T82.510A, T82.511A, T82.520A, T82.521A, T82.530A, T82.531A,
T82.590A, and T82.591A.
Comment: Commenters supported the proposal to maintain the current
assignment of the eight diagnosis codes in MDC 05 and expressed
appreciation for CMS' analysis of clinical best practice and claims
data. A commenter stated that while they recognize that the insertion
of TIVADS and tunneled vascular access devices may be performed to
treat renal failure, the resources used for such treatment--including
surgical equipment, interventional radiology services, clinical staff,
among others--are more consistent with vascular disease than the
primary diagnosis (that is, kidney disease) that led to the procedure.
Response: We thank the commenters for their support and appreciate
the feedback. After consideration of the public comments we received,
we are finalizing for FY 2024, without modification, our proposal to
not add the following eight ICD-10-CM codes to the list of principal
diagnosis codes for MS-DRGs 673, 674, and 675 when reported with a
procedure code describing the insertion of a TIVAD or a tunneled
vascular access device: T82.510A, T82.511A, T82.520A, T82.521A,
T82.530A, T82.531A, T82.590A, and T82.591A.
10. Review of Procedure Codes in MS-DRGs 981 Through 983 and 987
Through 989
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 (Non-Extensive 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 2022 update of the FY 2022 MedPAR file of cases found to
group to MS-DRGs 981 through 983 or MS-DRGs 987 through 989, we
proposed to move the cases reporting the procedures and/or principal
diagnosis codes described in
[[Page 58739]]
this section of this rule 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.
a. Percutaneous Endoscopic Resection of Colon
As discussed in the FY 2024 IPPS/LTCH PPS proposed rule (88 FR
26733 through 26735), during our review of the cases that group to MS-
DRGs 981 through 983, we noted that when ICD-10-PCS procedure code
0DTN4ZZ (Resection of sigmoid colon, percutaneous endoscopic 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. We stated in the proposed rule that the principal
diagnosis most frequently reported with ICD-10-PCS procedure code
0DTN4ZZ in MDC 11 is ICD-10-CM code N32.1 (Vesicointestinal fistula).
ICD-10-PCS procedure code 0DTN4ZZ currently groups to several MDCs,
which are listed in the following table.
[GRAPHIC] [TIFF OMITTED] TR28AU23.093
As noted in the proposed rule, we examined claims data from the
September 2022 update of the FY 2022 MedPAR file to identify the
average length of stay and average costs for cases reporting procedure
code 0DTN4ZZ with a principal diagnosis in MDC 11, which are currently
grouping to MS-DRGs 981 through 983, as well as all cases in MS-DRGs
981 through 983. Our findings are shown in the following table.
[GRAPHIC] [TIFF OMITTED] TR28AU23.094
We then examined the MS-DRGs within MDC 11 and determined that the
cases reporting procedure code 0DTN4ZZ 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), which contain procedures performed on structures
other than kidney and urinary tract anatomy.
To determine how the resources for this subset of cases compared to
cases in MS-DRGs 673, 674, and 675 as a whole, we stated in the
proposed rule we examined the average costs and length of stay for
cases in MS-DRGs 673, 674, and 675. Our findings are shown in this
table.
[[Page 58740]]
[GRAPHIC] [TIFF OMITTED] TR28AU23.095
We reviewed the data and noted in the proposed rule that for this
subset of cases, the average costs are higher and the average length of
stays are shorter than for cases in MS-DRGs 673, 674, and 675. However,
we stated we believed that when ICD-10-PCS procedure code 0DTN4ZZ is
reported with a principal diagnosis in MDC 11 (typically
vesicointestinal fistula), the procedure is related to the principal
diagnosis. Because vesicointestinal fistulas involve both the bladder
and the bowel, we stated some procedures in both MDC 06 (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 N32.1).
Therefore, we proposed to add ICD-10-PCS procedure code 0DTN4ZZ to MDC
11. Under this proposal, cases reporting procedure code 0DTN4ZZ with a
principal diagnosis of vesicointestinal fistula (diagnosis code N32.1)
in MDC 11 would group to MS-DRGs 673, 674, and 675.
Comment: Commenters supported the proposal to add ICD-10-PCS
procedure code 0DTN4ZZ (Resection of sigmoid colon, percutaneous
endoscopic approach) to MDC 11 (Diseases and Disorders of the Kidney
and Urinary Tract).
Response: We appreciate the commenters' support.
After consideration of the public comments we received, we are
finalizing our proposal to add ICD-10-PCS procedure code 0DTN4ZZ to MDC
11 (Diseases and Disorders of the Kidney and Urinary Tract), without
modification, effective October 1, 2023 for FY 2024.
b. Open Excision of Muscle
As discussed in the FY 2024 IPPS/LTCH PPS proposed rule (88 FR
26735 through 26737), during the review of the cases that group to MS-
DRGs 981 through 983, we noted that when ICD-10-PCS procedure codes
describing the open excision of muscle are reported in conjunction with
ICD-10-CM diagnosis codes in MDC 05 (Diseases and Disorders of the
Circulatory System), the cases group to MS-DRGs 981 through 983. The
list of 28 ICD-10-CM procedure codes reviewed, as well as their current
MDC assignments, are found in the table:
[[Page 58741]]
[GRAPHIC] [TIFF OMITTED] TR28AU23.096
We refer the reader to Appendix E of the ICD-10 MS-DRG Version 40.1
Definitions Manual (which is available on the CMS website at: https://www.cms.gov/Medicare/Medicare-Feefor-Service-Payment/AcuteInpatientPPS/MS-DRGClassifications-and-Software) for the MS-DRG assignment for each
procedure code listed and further discussion of how each procedure code
may be assigned to multiple MDCs and MS-DRGs under the IPPS.
As discussed in the proposed rule, the principal diagnosis most
frequently reported with the 28 ICD-10-PCS procedure codes describing
the open excision of muscle in MDC 05 is ICD-10-CM code I96 (Gangrene,
not elsewhere classified). Gangrene is a condition in which body tissue
dies from not getting enough blood. It can cause changes in skin color,
numbness or pain, swelling, and other symptoms. The combination of a
procedure code describing the open excision of muscle and ICD-10-CM
diagnosis code I96 indicates open debridement of muscle for gangrene
was performed.
We stated we examined claims data from the September 2022 update of
the FY 2022 MedPAR file to identify the average length of stay and
average costs for cases reporting a procedure code describing the open
excision of muscle with a principal diagnosis in MDC 05, which are
currently grouping to MS-DRGs 981 through 983, as well as all cases in
MS-DRGs 981 through 983. Our findings are shown in the following table.
[[Page 58742]]
[GRAPHIC] [TIFF OMITTED] TR28AU23.097
We then examined the MS-DRGs within MDC 05 and stated we determined
that the cases reporting procedure codes describing the open excision
of muscle with a principal diagnosis in MDC 05 would most suitably
group to MS-DRG 264 (Other Circulatory System O.R. Procedures), which
contains procedures performed on structures other than circulatory
anatomy.
To determine how the resources for this subset of cases compared to
cases in MS-DRG 264 as a whole, we examined the average costs and
length of stay for cases in MS-DRG 264. Our findings are shown in this
table.
[GRAPHIC] [TIFF OMITTED] TR28AU23.098
As discussed in the proposed rule, we reviewed the data and noted
for this subset of cases, in the ``with MCC'' subgroup the average
costs of the cases reporting procedure codes describing the open
excision of muscle with a principal diagnosis in MDC 05 are slightly
higher ($27,392 compared to $27,237) and the average length of stay is
longer (11.7 days compared to 9.9 days) than for all cases in MS-DRGs
264, while the cases in the ``with CC'' and the ``without CC/MCC''
subgroups have lower average costs ($16,989 and $7,140 respectively
compared to $27,237) and a shorter average length of stay (7.9 days and
4.7 days respectively compared to 9.9 days) than for cases in MS-DRG
264. However, we stated we believed that when a procedure code
describing the open excision of muscle is reported with a principal
diagnosis in MDC 05 (typically gangrene, not elsewhere classified), the
procedure is related to the principal diagnosis. Because debridement,
or the cutting away of dead and dying tissue, can be performed to keep
gangrene from spreading, we stated a procedure code describing the open
excision of muscle would be expected to be related to a principal
diagnosis of gangrene, not elsewhere classified (diagnosis code I96),
and it would be clinically appropriate for the procedures to group to
the same MS-DRGs as the principal diagnoses. Therefore, we proposed to
add the 28 procedure codes listed previously to MDC 05. Under this
proposal, cases reporting a procedure code describing the open excision
of muscle with a principal diagnosis of gangrene, not elsewhere
classified (diagnosis code I96) in MDC 05 would group to MS-DRG 264.
Comment: Commenters supported the proposal to add the 28 ICD-10-PCS
codes that describe the open excision of muscle to MDC 05 (Diseases and
Disorders of the Circulatory System).
Response: We appreciate the commenters' support.
After consideration of the public comments we received, we are
finalizing our proposal to add the 28 ICD-10-PCS codes that describe
the open excision of muscle listed previously to MDC 05 (Diseases and
Disorders of the Circulatory System), without modification, effective
October 1, 2023, for FY 2024.
c. Open Replacement of Skull With Synthetic Substitute
As discussed in the FY 2024 IPPS/LTCH PPS proposed rule (88 FR
26737 through 26739), during our review of the cases that group to MS-
DRGs 981 through 983, we noted that when ICD-10-PCS procedure code
0NR00JZ (Replacement of skull with synthetic substitute, open approach)
is reported with a principal diagnosis in MDC 09 (Diseases and
Disorders of the Skin, Subcutaneous Tissue and Breast), the cases group
to MS-DRGs 981 through 983. The principal diagnosis most frequently
reported with ICD-10-PCS procedure code 0NR00JZ in MDC 09 is ICD-10-CM
code Z42.8 (Encounter for other plastic and reconstructive surgery
[[Page 58743]]
following medical procedure or healed injury).
ICD-10-PCS procedure code 0NR00JZ currently groups to several MDCs,
which are listed in the following table.
[GRAPHIC] [TIFF OMITTED] TR28AU23.099
As discussed in the proposed rule, we examined claims data from the
September 2022 update of the FY 2022 MedPAR file to identify the
average length of stay and average costs for cases reporting procedure
code 0NR00JZ with a principal diagnosis in MDC 09, which are currently
grouping to MS-DRGs 981 through 983, as well as all cases in MS-DRGs
981 through 983. Our findings are shown in the following table.
[GRAPHIC] [TIFF OMITTED] TR28AU23.100
We then examined the MS-DRGs within MDC 09 and determined that the
cases reporting procedure code 0NR00JZ with a principal diagnosis in
MDC 09 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) given the nature of the procedure. MS-
DRGs 579, 580, and 581 contain procedures assigned to MDC 09 that do
not fit within the specific surgical MS-DRGs in MDC 09, which are: skin
graft; skin debridement; mastectomy for malignancy; and breast biopsy,
local excision, and other breast procedures.
To determine how the resources for this subset of cases compared to
cases in MS-DRGs 579, 580, and 581 as a whole, we stated we examined
the average costs and length of stay for cases in MS-DRGs 579, 580, and
581. Our findings are shown in this table.
[GRAPHIC] [TIFF OMITTED] TR28AU23.101
We reviewed the data and noted for this subset of cases, the
average costs are higher and the average length of stays are shorter
than for cases in MS-DRGs 579, 580, and 581. However, we stated we
believed that when ICD-10-PCS procedure code 0NR00JZ is reported with a
principal diagnosis in MDC 09 (typically encounter for other plastic
and reconstructive surgery following medical procedure or healed
injury), the
[[Page 58744]]
procedure is related to the principal diagnosis.
We noted in the proposed rule that open brain surgeries that
require removing a portion of the skull, for indications such as brain
tumor resection, hydrocephalus shunt implantation, cerebral aneurysm
clipping, evacuation of a brain hemorrhage, microvascular
decompression, and lobectomy, can sometimes result in a residual
cranial defect. We stated we believed that would be clinically
appropriate for the procedure to group to the same MS-DRGs as the
principal diagnosis as procedure code 0NR00JZ can be used to describe
cranial reconstruction procedures that involve applying a cranial
prosthetic device to address the residual bony void and/or defect to
restore the natural contours of the skull.
Therefore, we proposed to add ICD-10-PCS procedure code 0NR00JZ to
MDC 09. Under this proposal, cases reporting procedure code 0NR00JZ
with a principal diagnosis in MDC 09 (such as encounter for other
plastic and reconstructive surgery following medical procedure or
healed injury) would group to MS-DRGs 579, 580, and 581.
Comment: Most commenters supported the proposal to add ICD-10-PCS
procedure code 0NR00JZ to MDC 09 (Diseases and Disorders of the Skin,
Subcutaneous Tissue and Breast). However, a commenter opposed CMS'
proposal. The commenter stated they did not agree and stated MS-DRGs
579, 580, and 581 are not reflective of the clinical nature of skull
procedures which are more in line with cranial procedures in MDC 01
(Diseases and Disorders of the Nervous System). This commenter further
requested the creation of new MS-DRGs in MDC 01 to reflect the
resources utilized in the performance of these procedures.
Response: We thank the commenters for their support and feedback.
In response to the commenter that opposed the proposal, we note
that ICD-10-PCS procedure code 0NR00JZ currently groups to several
MDCs, which are listed in the previous table. In MDC 01 specifically,
ICD-10-PCS procedure code 0NR00JZ is assigned to MS-DRG 023 (Craniotomy
with Major Device Implant or Acute Complex CNS Principal Diagnosis with
MCC or Chemotherapy Implant or Epilepsy with Neurostimulator), MS-DRG
024 (Craniotomy with Major Device Implant or Acute Complex CNS
Principal Diagnosis without MCC), and MS-DRGs 025, 026, and 027
(Craniotomy and Endovascular Intracranial Procedures with MCC, with CC,
and without CC/MCC, respectively). When ICD-10-PCS procedure code
0NR00JZ is reported with an ICD-10-CM diagnosis code assigned to MDC
01, the cases group MS-DRGs 023 through 027 depending on the
circumstances of the admission. ICD-10-CM diagnosis code Z42.8
(Encounter for other plastic and reconstructive surgery following
medical procedure or healed injury), however, is currently assigned to
MDC 09 and would require reassignment to MDC 01 in order for these
cases to group to MS-DRGs in MDC 01 as suggested by the commenter. We
believe that diagnosis code Z42.8 is appropriately assigned to MDC 09
(Diseases and Disorders of the Circulatory System) as it describes
encounters for other plastic and reconstructive surgery following
medical procedure or healed injury. In reviewing the commenter's
concerns, we note that diagnosis code Z42.8 does not describe a
diagnosis or circumstance limited to affecting the nervous system. It
would not be appropriate to move this diagnosis code into another MDC
because it could inadvertently cause cases reporting this MDC 09
diagnosis with reconstructive procedures to be assigned to an unrelated
MS-DRG. We note that 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 a MS-DRG assignment to
a surgical class referred to as ``unrelated operating room
procedures''.
As discussed in the proposed rule, we note that MS-DRGs 579, 580,
and 581 contain procedures assigned to MDC 09 that do not fit within
the specific surgical MS-DRGs in MDC 09. We continue to believe that
when ICD-10-PCS procedure code 0NR00JZ is reported with a principal
diagnosis in MDC 09 (typically encounter for other plastic and
reconstructive surgery following medical procedure or healed injury),
the procedure is related to the principal diagnosis and that it would
be clinically appropriate for the procedure to group to the same MS-
DRGs as the principal diagnosis. We also continue to believe that cases
reporting procedure code 0NR00JZ with a principal diagnosis in MDC 09
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) given the nature of the procedure.
Therefore, after consideration of the public comments we received,
and for the reasons discussed, we are finalizing our proposal to add
ICD-10-PCS procedure code 0NR00JZ to MDC 09 (Diseases and Disorders of
the Circulatory System), without modification, effective October 1,
2023 for FY 2024.
d. Endoscopic Dilation of Ureters With Intraluminal Device
As discussed in the FY 2024 IPPS/LTCH PPS proposed rule (88 FR
26739 through 26740), during the review of the cases that group to MS-
DRGs 987 through 989, we noted that when ICD-10-PCS procedure codes
describing the endoscopic dilation of ureters with an intraluminal
device are reported in conjunction with ICD-10-CM diagnosis codes in
MDC 05 (Diseases and Disorders of the Circulatory System), the cases
group to MS-DRGs 987 through 989. The principal diagnosis most
frequently reported with ICD-10-PCS procedure codes describing the
endoscopic dilation of ureters with an intraluminal device in MDC 05 is
ICD-10-CM code I13.0 (Hypertensive heart and chronic kidney disease
with heart failure and stage 1 through stage 4 chronic kidney disease,
or unspecified chronic kidney disease).
In the following tables, the ICD-10-PCS procedure codes describing
the endoscopic dilation of ureters with an intraluminal device are
listed, as well as their MDC and MS-DRG assignments.
[GRAPHIC] [TIFF OMITTED] TR28AU23.102
[[Page 58745]]
[GRAPHIC] [TIFF OMITTED] TR28AU23.103
As discussed in the proposed rule, we examined claims data from the
September 2022 update of the FY 2022 MedPAR file to identify the
average length of stay and average costs for cases reporting procedure
code 0T768DZ, 0T778DZ, or 0T788DZ with a principal diagnosis in MDC 05,
which are currently grouping to MS-DRGs 987 through 989, as well as all
cases in MS-DRGs 987 through 989. Our findings are shown in the
following table.
[GRAPHIC] [TIFF OMITTED] TR28AU23.104
We stated we then examined the MS-DRGs within MDC 05 and determined
that the cases reporting procedure codes describing the endoscopic
dilation of ureters with an intraluminal device with a principal
diagnosis in MDC 05 would most suitably group to MS-DRG 264 (Other
Circulatory System O.R. Procedures), which contains procedures
performed on structures other than circulatory anatomy.
To determine how the resources for this subset of cases compared to
cases in MS-DRG 264 as a whole, we stated we examined the average costs
and length of stay for cases in MS-DRG 264. Our findings are shown in
this table.
[GRAPHIC] [TIFF OMITTED] TR28AU23.105
As discussed in the proposed rule, we reviewed these data and noted
that the average costs for this subset of cases, most of which group to
MS-DRG 987, are lower than the average costs than for cases in MS-DRG
264. However, we stated we believed that when a procedure code
describing the endoscopic dilation of ureters with an intraluminal
device is reported with a principal diagnosis in MDC 05 (typically
hypertensive heart and chronic kidney disease with heart failure and
stage 1 through stage 4 chronic kidney disease, or unspecified chronic
kidney disease), the procedure is related to the principal diagnosis.
We noted in the proposed rule that ureteral intraluminal devices are
used to relieve ureteral obstruction by passively dilating the ureter
to allow urine to drain through the center of the hollow intraluminal
device as well as around the device. Indications for endoscopic
[[Page 58746]]
ureteral intraluminal device placement include the uncomplicated
ureteral obstruction due to causes such as nephrolithiasis, tumor, or
retroperitoneal fibrosis, or obstruction complicated by urinary tract
infection, renal insufficiency, or renal failure. As the endoscopic
dilation of ureters with an intraluminal device would be expected to be
related to a principal diagnosis of hypertensive heart and chronic
kidney disease with heart failure and stage 1 through stage 4 chronic
kidney disease, or unspecified chronic kidney disease, not elsewhere
classified (diagnosis code I13.0), we stated it would be clinically
appropriate for the procedures to group to the same MS-DRGs as the
principal diagnoses.
Therefore, we proposed to add ICD-10-PCS procedure codes 0T768DZ,
0T778DZ, and 0T788DZ to MDC 05. Under this proposal, cases reporting
procedure code 0T768DZ, 0T778DZ, or 0T788DZ with a principal diagnosis
of hypertensive heart and chronic kidney disease with heart failure and
stage 1 through stage 4 chronic kidney disease, or unspecified chronic
kidney disease (I13.0) in MDC 05 would group to MS-DRG 264.
Comment: Most commenters supported the proposal to add ICD-10-PCS
procedure codes 0T768DZ, 0T778DZ and 0T788DZ to MDC 05 (Diseases and
Disorders of the Circulatory System). However, a commenter opposed CMS'
proposal. The commenter stated they did not agree and stated these
cases would most appropriately group to MDC 11 (Diseases and Disorders
of the Kidney and Urinary Tract).
Response: We thank the commenters for their support and feedback.
In response to the commenter that opposed the proposal, we note that
ICD-10-CM diagnosis code I13.0 (Hypertensive heart and chronic kidney
disease with heart failure and stage 1 through stage 4 chronic kidney
disease, or unspecified chronic kidney disease) is currently assigned
to MDC 05 and would require reassignment to MDC 11 in order for these
cases to group to MDC 11 as suggested by the commenter. As discussed in
prior rulemaking (85 FR 58504), we believe that this diagnosis code is
appropriately assigned to MDC 05 (Diseases and Disorders of the
Circulatory System) as it describes heart failure. We continue to
believe it would not be appropriate to move this diagnosis into another
MDC because it could inadvertently cause cases reporting this MDC 05
diagnosis with a circulatory system procedure to be assigned to an
unrelated MS-DRG. We note that 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 a MS-DRG
assignment to a surgical class referred to as ``unrelated operating
room procedures''.
Therefore, after consideration of the public comments we received,
and for the reasons discussed, we are finalizing our proposal to add
ICD-10-PCS procedure codes 0T768DZ, 0T778DZ, and 0T788DZ to MDC 05
(Diseases and Disorders of the Circulatory System), without
modification, effective October 1, 2023, for FY 2024.
e. Occlusion of Splenic Artery
As discussed in the FY 2024 IPPS/LTCH PPS proposed rule (88 FR
26740 through 26742), during our review of the cases currently grouping
to MS-DRGs 987 through 989, we noted that when ICD-10-PCS procedure
codes describing the occlusion of the splenic artery are reported in
conjunction with ICD-10-CM diagnosis codes in MDC 16 (Diseases and
Disorders of Blood, Blood Forming Organs and Immunologic Disorders),
the cases group to MS-DRGs 987 through 989. The principal diagnosis
most frequently reported with ICD-10-PCS procedure codes describing the
occlusion of the splenic artery in MDC 16 is ICD-10-CM code S36.032A
(Major laceration of spleen, initial encounter).
In the following tables, the ICD-10-PCS procedure codes describing
the occlusion of the splenic artery are listed, as well as their MDC
and MS-DRG assignments.
[GRAPHIC] [TIFF OMITTED] TR28AU23.106
[GRAPHIC] [TIFF OMITTED] TR28AU23.107
[[Page 58747]]
As discussed in the proposed rule, we examined claims data from the
September 2022 update of the FY 2022 MedPAR file to identify the
average length of stay and average costs for cases reporting procedure
codes describing the occlusion of the splenic artery with a principal
diagnosis in MDC 16, which are currently grouping to MS-DRGs 987
through 989, as well as all cases in MS-DRGs 987 through 989. Our
findings are shown in the following table.
[GRAPHIC] [TIFF OMITTED] TR28AU23.108
We stated we then examined the MS-DRGs within MDC 16 and determined
that the cases reporting a procedure code describing the occlusion of
the splenic artery with a principal diagnosis in MDC 16 would most
suitably group to MS-DRGs 799, 800, and 801 (Splenectomy with MCC, with
CC, and without CC/MCC, respectively) given the nature of the
procedure.
We note, as discussed in section II.C.1.b of the proposed rule and
this final rule, using the December 2022 update of the FY 2022 MedPAR
file, we analyzed how applying the NonCC subgroup criteria to all MS-
DRGs currently split into three severity levels would affect the MS-DRG
structure beginning in FY 2024. Findings from our analysis indicate
that MS-DRGs 799, 800, and 801 as well as approximately 44 other base
MS-DRGs would be subject to change based on the three-way severity
level split criterion finalized in FY 2021. We refer the reader to
Table 6P.10b associated with the proposed rule (which is available on
the CMS website at: https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/AcuteInpatientPPS) for the list of the 135 MS-DRGs that
would potentially be subject to deletion and the list of the 86 new MS-
DRGs that would potentially be created if the NonCC subgroup criteria
was applied.
To determine how the resources for this subset of cases compared to
cases in MS-DRGs 799, 800, and 801 as a whole, we stated we examined
the average costs and length of stay for cases in MS-DRGs 799, 800, and
801. Our findings are shown in this table.
[GRAPHIC] [TIFF OMITTED] TR28AU23.109
BILLING CODE 4120-01-C
We reviewed these data and noted that the average length of stay
and average costs of the subset of cases reporting a procedure code
describing the occlusion of the splenic artery with a principal
diagnosis in MDC 16 are more similar to those of cases in MS-DRGs 799,
800, and 801. In the proposed rule, we also noted that in cases of
splenic injury, the diagnosis and prompt management of potentially
life-threatening hemorrhage is the primary goal. Procedures to occlude
the splenic artery, such as splenic embolization, can be performed for
spleen injuries, such as lacerations, in order to manage bleeding prior
to or instead of more invasive splenic procedures. We stated a
procedure code describing the occlusion of the splenic artery would be
expected to be related to a principal diagnosis of a major laceration
of spleen, initial encounter
[[Page 58748]]
(diagnosis code S36.032A) and would be clinically appropriate for the
procedures to group to the same MS-DRGs as the principal diagnoses.
Given the similarity in resource use between this subset of cases
and cases in MS-DRGs 799, 800, and 801, and that we believed that
procedure codes describing the occlusion of the splenic artery are
related to principal diagnoses in MDC 16 (typically major laceration of
spleen, initial encounter), we stated these cases would be more
appropriately assigned to MS-DRGs 799, 800, and 801 in MDC 16 than
their current assignment in MS-DRGs 987 through 989. Therefore, we
proposed to add the nine procedure codes listed in the previous table
that describe the occlusion of the splenic artery to MDC 16 (Diseases
and Disorders of Blood, Blood Forming Organs and Immunologic Disorders)
in MS-DRGs 799, 800, and 801. Under this proposal, cases reporting a
principal diagnosis of a major laceration of spleen, initial encounter
(S36.032A) with a procedure describing the occlusion of the splenic
artery would group to MS-DRGs 799, 800, and 801.
As discussed in the proposed rule, during the review of this issue,
we noted that a splenectomy is a surgical operation involving removal
of the spleen, however the GROUPER logic list for MS-DRGs 799, 800, and
801 does not exclusively contain procedure codes that describe the
removal of the spleen. We refer the reader to the ICD-10 MS-DRG Version
40.1 Definitions Manual (which is available on the CMS website at:
https://www.cms.gov/Medicare/Medicare-Feefor-Service-Payment/AcuteInpatientPPS/MS-DRGClassifications-and-Software) for complete
documentation of the GROUPER logic for MS-DRGs 799, 800, and 801.
Therefore, we also proposed to revise the titles of MDC 16 MS-DRGs 799,
800, and 801 from ``Splenectomy with MCC, with CC, and without CC/MCC,
respectively'' to ``Splenic Procedures with MCC, with CC, and without
CC/MCC, respectively'' to better reflect the assigned procedures.
Comment: Commenters supported the proposal to add the nine ICD-10-
PCS codes that describe the occlusion of the splenic artery to MDC 16
(Diseases and Disorders of Blood, Blood Forming Organs and Immunologic
Disorders) and to revise the titles of MDC 16 MS-DRGs 799, 800, and
801. A commenter stated they appreciated CMS' analysis and requested
that CMS provide ongoing analysis of other splenic diseases and
disorders that group to MS-DRGs 987, 988, and 989 when reported with
ICD-10-PCS procedure codes.
Response: We appreciate the commenters' support. We note that
consistent with our process as described previously in this section, we
do conduct an annual 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 (Non-Extensive 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.
After consideration of the public comments we received, we are
finalizing our proposal to add the nine procedure codes listed in the
previous table that describe the occlusion of the splenic artery to MDC
16 (Diseases and Disorders of Blood, Blood Forming Organs and
Immunologic Disorders) in MS-DRGs 799, 800, and 801, without
modification, effective October 1, 2023, for FY 2024. We are also
finalizing our proposal to revise the titles of MDC 16 MS-DRGs 799,
800, and 801 from ``Splenectomy with MCC, with CC, and without CC/MCC,
respectively'' to ``Splenic Procedures with MCC, with CC, and without
CC/MCC, respectively'' to better reflect the assigned procedures for FY
2024.
In addition to the internal review of procedures producing
assignment to MS-DRGs 981 through 983 or MS-DRGs 987 through 989, as
discussed in the proposed rule, we also consider requests that we
receive 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. We stated
we did not receive any requests suggesting reassignment.
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.
Additionally, we also consider requests that we receive 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 for the cases to be
reassigned from one of the MS-DRG groups to the other. In the proposed
rule, we stated that based on the results of our review of the claims
data from the September 2022 update of the FY 2022 MedPAR file we did
not identify any cases for reassignment. We also stated we did not
receive any requests suggesting reassignment. Therefore, for FY 2024 we
did not propose to move any cases reporting procedure codes from MS-
DRGs 981 through 983 to MS-DRGs 987 through 989 or vice versa.
Comment: Commenters expressed support for CMS' proposal to not move
any cases reporting procedure codes from MS-DRGs 981 through 983 to MS-
DRGs 987 through 989 or vice versa.
Response: We appreciate the commenters' support.
After consideration of the public comments we received, we are
finalizing, without modification, our proposal to not move any cases
reporting procedure codes from MS-DRGs 981 through 983 to MS-DRGs 987
through 989 or vice versa.
11. Operating Room (O.R.) and Non-O.R. Procedures
a. Background
Under the IPPS MS-DRGs (and former CMS 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
[[Page 58749]]
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 (``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, we 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.C.13 of the preamble of this final rule, we are making Table
6B.--New Procedure Codes--FY 2024 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 40.1 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.
In the FY 2020 IPPS/LTCH PPS proposed rule, we stated that, 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 multiyear
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.
We discussed in the FY 2020 IPPS/LTCH PPS proposed rule that 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 stated 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.
In the FY 2021 IPPS/LTCH PPS final rule (85 FR 58540 through
58541), we provided a summary of the comments we had received in
response to our request for feedback 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. In the FY 2022 IPPS/LTCH PPS proposed rule (86 FR 25158)
and final rule (86 FR 44891), and FY 2023 IPPS/LTCH PPS proposed rule
(87 FR 28174) and final rule (87 FR 48862), we stated that in
consideration of the ongoing PHE, we believed it may be appropriate to
allow additional time for the claims data to stabilize prior to
selecting the timeframe to analyze for this review.
We stated in the FY 2024 IPPS/LTCH PPS proposed rule, we continue
to believe additional time is necessary as we continue to develop our
process and methodology. Therefore, we stated we will provide more
detail on this analysis and the methodology for conducting this review
in future rulemaking.
Comment: Commenters supported CMS' plan to continue to conduct the
comprehensive, systematic review of the ICD-10-PCS codes and to
evaluate their current O.R. and non-O.R. designations. These commenters
expressed that they were supportive of CMS' decision to continue to
develop the processes and methodology over the upcoming years and to
allow the claims data to become more stable. Other commenters stated
they agreed that a restructuring of these designations may be warranted
as a result of the expanded detail in the ICD-10-PCS classification and
changes in medical practice and that they look forward to commenting on
CMS' data analysis and methodology in the future.
Response: We thank the commenters for their support.
Comment: Other commenters stated that designation of O.R. versus
non-O.R. may no longer be the most critical differentiator between
resource-intensive procedures for MS-DRG purposes. These commenters
stated presently, there are increasingly complex and resource-intensive
procedures performed by hospitals that do not involve the use of an
operating room. A commenter stated that the administration of certain
complex biologics or radiotherapies are not surgical procedures at all,
yet these procedures represent significant resource utilization by
hospitals. Another commenter stated that biplane radiology
interventional suites and cardiac catheterization labs used for
procedures such as mechanical thrombectomy or endovascular coiling for
aneurysms can utilize more advanced equipment and supplies than a basic
operating room with minimal installed equipment. This commenter
[[Page 58750]]
encouraged CMS to recognize that the revolution in medical procedures
in recent years may render O.R. vs. non-O.R. a less critical
distinction in driving payment policy.
As part of the broader and continuing conversation about future MS-
DRG assignments and designations for these procedures and therapies, a
commenter encouraged CMS to consider how other factors influence
resource utilization, and recommended CMS consider questions such as
whether:
Certain types of procedures and therapies make up a
substantial percentage of the costs within a particular MS-DRG?
There is an average amount of cost within the relative
weight of a MS-DRG that represents significant resource utilization and
complexity?
Certain types of interventions, such as the administration
of certain complex drugs/biologics or therapies (for example, radiation
therapy), that demonstrate higher costs and resource utilization,
warrant consideration of a designation as an O.R. procedure or another
equivalent designation? Should these therapies be considered for
another type of distinction apart from medical and surgical MS-DRGs--
for example, a third category, or be treated like CCs/MCCs?
What percentage of cases within an MS-DRG receive outlier
payment?
Response: CMS appreciates the commenters' feedback and
recommendations as to what factors to consider in evaluating O.R.
versus non-O.R. designations. As stated previously, we have typically
evaluated procedures on the basis of whether or not they would be
performed in an operating room. We agree with commenters and believe
that there may be other factors to consider with regard to resource
utilization, particularly with the implementation of ICD-10. As
discussed in the proposed rule, we are exploring alternatives on how we
may restructure the current O.R. and non-O.R. designations for
procedures by leveraging the detail that is available in the ICD-10
claims data. As we continue to consider the feedback we have received
to help inform the development of our process and methodology, we will
provide more detail in future rulemaking. We encourage the public to
continue to submit comments on any other factors to consider in our
refinement efforts to recognize and differentiate consumption of
resources for the ICD-10 MS-DRGs for consideration.
As discussed in the FY 2024 IPPS/LTCH PPS proposed rule (88 FR
26744 through 26746), we received the following requests regarding
changing the designation of specific ICD-10-PCS procedure codes from
non-O.R. to O.R. procedures. In this section of this rule, as we did in
the proposed rule, we summarize these requests and address why we are
not considering a change to the designation of these codes at this time
and, further, respond to the public comments we received regarding
these requests.
In the FY 2023 IPPS/LTCH PPS final rule (87 FR 48863), we discussed
a request we received to change the designation of all ICD-10-PCS codes
that describe diagnostic and therapeutic percutaneous endoscopic
procedures performed on thoracic and abdominal organs, from non-O.R. to
O.R. In the FY 2023 final rule, we stated that we believed additional
time was needed to fully examine the numerous ICD-10-PCS codes in the
classification that describe diagnostic and therapeutic percutaneous
endoscopic procedures performed on thoracic and abdominal organs. We
stated that rather than evaluating the procedure codes describing
diagnostic and therapeutic percutaneous endoscopic procedures performed
on thoracic and abdominal organs in isolation, analysis should be
performed for this subset of procedure codes across the MS-DRGs, as
part of the comprehensive procedure code review. We also stated that as
a component of our broader comprehensive procedure code review, we are
also reviewing the process for determining when a procedure is
considered an operating room procedure.
As discussed in the FY 2024 IPPS/LTCH PPS proposed rule, we again
received a request to change the designation of all ICD-10-PCS
procedure codes that describe diagnostic and therapeutic percutaneous
endoscopic procedures performed on thoracic and abdominal organs, from
non-O.R. to O.R from the same requestor. According to the requestor,
diagnostic and therapeutic thoracoscopic and laparoscopic procedures on
thoracic and abdominal organs are always performed in the operating
room under complex general anesthesia. The requestor did not provide a
specific list of the procedure codes that describe diagnostic and
therapeutic percutaneous endoscopic procedures performed on thoracic
and abdominal organs and are currently designated as non-O.R. for CMS
for review, to narrow the scope of this repeat request.
As we have signaled in prior rulemaking, the designation of an O.R.
procedure encompasses more than the physical location of the hospital
in which the procedure may be performed; in other words, the
performance of a procedure in an operating room is not the sole
determining factor we consider as we examine the designation of a
procedure in the ICD-10-PCS classification system. We also examine if,
and in what way, the performance of the procedure affects the resource
expenditure in those admissions in the inpatient setting, in addition
to examining other clinical factors such as procedure complexity, and
need for anesthesia administration as well as other types of sedation.
As also stated in prior rulemaking, we plan to conduct a comprehensive,
systematic review of the ICD-10-PCS procedure codes. We stated in the
proposed rule that rather than evaluating this subset of procedure
codes in isolation, as any potential change to the designation of these
codes requires significant review, we continue to believe that analysis
of the designation of the procedure codes describing diagnostic and
therapeutic percutaneous endoscopic procedures performed on thoracic
and abdominal organs should be performed across the MS-DRGs, as part of
the comprehensive procedure code review. Therefore, for the reasons
discussed, we did not propose any changes to the designation of all
ICD-10-PCS procedure codes that describe diagnostic and therapeutic
percutaneous endoscopic procedures performed on thoracic and abdominal
organs, from non-O.R. to O.R. for FY 2024. As diagnostic and
therapeutic percutaneous endoscopic procedures performed on thoracic
and abdominal organs differ greatly in terms of clinical factors such
as procedure complexity and resource utilization, we invited feedback
on what factors or criteria to consider in determining whether a
procedure should be designated as an O.R. procedure in the ICD-10-PCS
classification system when evaluating this subset of procedure codes as
part of the comprehensive procedure code review. Feedback and other
suggestions may be submitted by October 20, 2023, and directed to the
new electronic intake system, Medicare Electronic Application Request
Information SystemTM (MEARISTM), discussed in
section II.C.1.b of the preamble of the proposed rule at: https://mearis.cms.gov/public/home.
We will provide more detail on the comprehensive procedure code
review and the methodology for conducting this review in future
rulemaking.
Comment: Most commenters agreed with CMS' proposal to maintain the
designation of all ICD-10-PCS procedure codes that describe
[[Page 58751]]
diagnostic and therapeutic percutaneous endoscopic procedures performed
on thoracic and abdominal organs for FY 2024.
Response: We appreciate the commenters' support.
Comment: A commenter stated that while they did not dispute that
there may be numerous ICD-10-PCS codes that describe procedures
performed using a percutaneous endoscopic approach, they believed that
this list could be narrowed down substantially by considering only
codes describing procedures performed on thoracic and abdominal organs.
This commenter stated that even with a smaller list utilizing the
criteria they suggested, they were unable to envision a thoracoscopic
or laparoscopic procedure that would not require general anesthesia and
be performed in an operating room and urged CMS to designate any ICD-
10-PCS procedure code that describes a thoracic or abdominal procedure
using a percutaneous endoscopic approach as an operating room
procedure.
Response: We thank the commenter for their feedback. We also
appreciate the commenter's suggestion, however, as stated in the
proposed rule, and in prior rulemaking, we plan to conduct a
comprehensive, systematic review of the ICD-10-PCS procedure codes. We
continue to believe that rather than evaluating the procedure codes
describing diagnostic and therapeutic percutaneous endoscopic
procedures performed on thoracic and abdominal organs in isolation,
analysis should be performed for this subset of procedure codes across
the MS-DRGs, as part of the comprehensive procedure code review. As a
component of our broader comprehensive procedure code review, we are
also reviewing 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 available in the ICD-10 claims data. Therefore,
after consideration of the public comments we received, and for the
reasons discussed, we are not making changes in this final rule to the
designation of all ICD-10-PCS procedure codes that describe diagnostic
and therapeutic percutaneous endoscopic procedures performed on
thoracic and abdominal organs, from non-O.R. to O.R.
In the FY 2022 IPPS/LTCH PPS final rule (86 FR 44892 through
44895), CMS finalized the proposal to remove the 22 codes that describe
the open drainage of subcutaneous tissue and fascia listed in the
following table from the ICD-10 MS-DRGs Version 39 Definitions Manual
in Appendix E--Operating Room Procedures and Procedure Code/MS-DRG
Index as O.R. procedures. Under this finalization, these procedures no
longer impact MS-DRG assignment.
[GRAPHIC] [TIFF OMITTED] TR28AU23.110
In the FY 2022 final rule, we noted that the designation of the 22
procedure codes that describe the open drainage of subcutaneous tissue
and fascia as O.R. procedures was a result of a replication error in
transitioning to ICD-10. This replication error led to ICD-10-PCS
procedure codes that describe the open drainage of subcutaneous tissue
and fascia being listed as comparable translations for ICD-9-CM code
83.09 (Other incision of soft tissue), which was designated as a non-
extensive O.R. procedure under the ICD-9-CM MS-DRGs Version 32, as
opposed to being listed as comparable translations for ICD-9-CM code
86.04 (Other incision with drainage of skin and subcutaneous tissue),
which was designated as a non-O.R. procedure under the ICD-9-CM MS-DRGs
Version 32. We stated in the FY 2022 final rule that designating the 22
procedure codes that describe the open drainage of subcutaneous tissue
[[Page 58752]]
and fascia as non-O.R. procedures would result in a more accurate
replication of the comparable procedure, under the ICD-9-CM MS-DRGs
Version 32 which was 86.04, not 83.09 and is more aligned with current
shifts in treatment practices.
In the FY 2023 IPPS/LTCH PPS final rule (87 FR 48863 through
48865), we discussed a request we received to re-examine this change in
designation. In the FY 2023 final rule, we did not make changes to the
designation of these codes and stated that procedure codes that
describe the open drainage of subcutaneous tissue and fascia do not
reflect the technical complexity or resource intensity in comparison to
other procedures that are designated as O.R. procedures. We stated that
our analysis of the September 2021 update of the FY 2021 MedPAR file
reflected that when the procedure codes that describe the open drainage
of the subcutaneous tissue and fascia are reported, approximately 70%
of the MS-DRGs assigned are classified as surgical MS-DRGs which
indicated at least one procedure code designated as an O.R. procedure
was also reported in these cases. We also stated that the non-O.R.
designation of the 22 procedure codes that describe the open drainage
of subcutaneous tissue and fascia as finalized in the FY 2022 final
rule better reflects the associated technical complexity and hospital
resource use of these procedures.
As discussed in the FY 2024 IPPS/LTCH PPS proposed rule, we again
received a request to re-examine the designation of the 22 procedure
codes that describe the open drainage of subcutaneous tissue and fascia
as non-O.R. procedures from the same requestor. The requestor stated
that CMS should return the designation of these procedure codes to O.R.
procedures to reflect the operating room resources utilized in the
performance of these procedures and suggested that CMS analyze claims
containing the 22 ICD-10-PCS codes to determine the percentage that
contained timed O.R. charges billed under revenue code 360. The
requestor also indicated there was confusion about the coded claims
data as presented in the FY 2023 final rule. The requestor noted that
the 22 procedure codes that describe the open drainage of subcutaneous
tissue and fascia were designated as O.R. procedures in FY 2021 so it
was unclear to the requestor why the table displayed by CMS associated
with the FY 2023 final rule contained assignment to medical MS-DRGs.
First, in response to the question about the coded claims data as
presented in the FY 2023 final rule, in the proposed rule we noted as
generally stated in the preamble of the proposed rule each year, the
diagnosis and procedure codes from the specified FY MedPAR claims data
are grouped through the applicable version of the proposed FY GROUPER.
The FY 2021 MedPAR claims data presented in the FY 2023 final rule were
regrouped using the proposed FY 2023 MS-DRG classifications. In the
proposed FY 2023 GROUPER, the procedure codes that describe the open
drainage of subcutaneous tissue and fascia no longer impacted MS-DRG
assignment and that is the reason why assignments to medical DRGs were
displayed in Table 6P.1f associated with the FY 2023 final rule.
Next, we referred the reader to Table 6P.8a associated with the
proposed rule (which is available on the CMS website at: https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/AcuteInpatientPPS) for the data analysis of cases reporting the 22
procedure codes that describe the open drainage of subcutaneous tissue
and fascia in the September 2022 update of the FY 2022 MedPAR file. We
noted that within each MDC, the MS-DRGs are divided into medical and
surgical categories. In general, surgical MS-DRGs are further defined
based on the precise surgical procedure performed while the medical MS-
DRGs are further defined based on the precise principal diagnosis for
which a patient was admitted to the hospital. In Table 6P.8a associated
with the proposed rule, column B displays the category of each MS-DRG
in MS-DRG GROUPER Version 40.1. The letter M is used to designate a
medical MS-DRG and the letter P is used to designate a surgical MS-DRG.
In the proposed rule, we stated that overall, the data continues to
indicate that the open drainage of subcutaneous tissue and fascia was
not the underlying reason for, or main driver of, resource utilization
for those cases. As shown in the table, when the procedure codes that
describe the open drainage of the subcutaneous tissue and fascia are
reported, approximately 55% of the MS-DRGs assigned are classified as
surgical MS-DRGs, which indicates at least one procedure code
designated as an O.R. procedure was also reported in these cases. We
referred the reader to the ICD-10 MS-DRG Version 40.1 Definitions
Manual (which is available on the CMS website at: https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/AcuteInpatientPPS/MS-DRGClassifications-and-Software) for complete documentation of the
GROUPER logic for the listed MS-DRGs.
We stated we reviewed these data and continued to believe that
procedure codes that describe the open drainage of subcutaneous tissue
and fascia do not reflect the technical complexity or resource
intensity in comparison to other procedures that are designated as O.R.
procedures. As stated in prior rulemaking, procedures describing the
open drainage of subcutaneous tissue and fascia can now be safely
performed in the outpatient setting and when performed during a
hospitalization, it is typically in conjunction with another O.R.
procedure. In cases where procedures describing open drainage of
subcutaneous tissue and fascia are the only procedures performed in an
admission, the admission is quite likely due to need for IV antibiotics
as opposed to the need for operating room resources in an inpatient
setting.
We also noted that, as stated in prior rulemaking (84 FR 42069), 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
stated 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, we analyzed the cases reporting the
ICD-10-PCS procedure codes that describe the open drainage of
subcutaneous tissue and fascia. We then evaluated patient care costs
using average costs and average lengths of stay (based on the MedPAR
data) to detect if, and in what way, the performance of these
procedures affects the resource expenditure in those admissions in the
inpatient setting, in addition to examining other clinical factors such
as procedure complexity and need for anesthesia administration as well
as other types of sedation.
We stated in the proposed rule, we continue to believe that the
non-O.R. designation of the 22 procedure codes that describe the open
drainage of subcutaneous tissue and fascia as finalized in the FY 2022
final rule better reflects the associated technical complexity and
hospital resource use of these procedures. Therefore, for the reasons
discussed, we did not propose changes to the designation of the 22
[[Page 58753]]
codes that describe the open drainage of subcutaneous tissue and fascia
listed in the previous table for FY 2024.
Comment: Most commenters agreed with CMS' proposal to maintain the
designation of the 22 codes that describe the open drainage of
subcutaneous tissue and fascia for FY 2024.
Response: We appreciate the commenters' support.
Comment: A commenter opposed the non-O.R. designation of the 22
procedure codes that describe the open drainage of subcutaneous tissue
and fascia as finalized in the FY 2022 final rule. This commenter
stated that they disagree that these 22 ICD-10-PCS procedures do not
typically require the resources of an O.R. when occurring in the
inpatient setting and stated they do not believe these procedures can
be safely performed in a non-O.R. setting. The commenter stated in the
FY 2018 IPPS proposed rule, these same 22 ICD-10-PCS codes were
identified, and a commenter opposed the proposal to re-designate these
codes at that time. In response to the issues raised by this commenter,
CMS determined in the FY 2018 IPPS final rule that it was appropriate
to maintain the designation of the 22 procedure codes. This commenter
further stated they find CMS' rulemaking on this issue between FY 2018
and FY 2024 to be contradictory and believe that the rationale to
maintain these 22 codes as O.R. procedures remains the same and that
there is no safe way to effectively drain an infection involving the
subfascial plane without the resources of an operating room.
Response: We thank the commenter for their feedback. We reviewed
the commenters' concerns and continue to state that treatment practices
have continued to shift since FY 2018 rulemaking. As stated in the
proposed rule, and in prior rulemaking, in response to similar
comments, we believe procedures describing the open drainage of
subcutaneous tissue and fascia can now be safely performed in the
outpatient setting and when performed during a hospitalization, it is
typically in conjunction with another O.R. procedure. In cases where
procedures describing open drainage of subcutaneous tissue and fascia
are the only procedures performed in an admission, the admission is
quite likely due to need for IV antibiotics as opposed to the need for
operating room resources in an inpatient setting. As shown in Table
6P.8a associated with the proposed rule (which is available on the CMS
website at: https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/AcuteInpatientPPS), when the procedure codes that describe the
open drainage of the subcutaneous tissue and fascia are reported,
approximately 55% of the MS-DRGs assigned are classified as surgical
MS-DRGs which indicates at least one procedure code designated as an
O.R. procedure was also reported in these cases.
As discussed in the proposed rule and earlier in this section, we
have signaled in prior rulemaking that the designation of an O.R.
procedure encompasses more than the physical location of the hospital
room in which the procedure may be performed; in other words, the
performance of a procedure in an operating room is not the sole
determining factor we consider as we examine the designation of a
procedure in the ICD-10-PCS classification system. We continue to
believe that procedure codes that describe the open drainage of
subcutaneous tissue and fascia do not reflect the technical complexity
or resource intensity in comparison to other procedures that are
designated as O.R. procedures. The non-O.R. designation of the 22
procedure codes that describe the open drainage of subcutaneous tissue
and fascia as finalized in the FY 2022 final rule better reflects the
associated technical complexity and hospital resource use of these
procedures.
Therefore, after consideration of the public comments we received,
and for the reasons discussed, we are not making changes in this final
rule to the designation of the 22 codes that describe the open drainage
of subcutaneous tissue and fascia listed in the previous table for FY
2024.
12. Changes to the MS-DRG Diagnosis Codes for FY 2024
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 (NonCC, 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 a MCC, a CC, or a NonCC 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 the comprehensive analysis was completed for FY 2008,
we have evaluated diagnosis codes individually when assigning severity
levels to new codes and when receiving requests to change the severity
level of specific diagnosis codes.
We noted in the FY 2020 IPPS/LTCH PPS proposed rule (84 FR 19235
through 19246) that with the transition to ICD-10-CM and the
significant changes that have occurred to diagnosis codes since the FY
2008 review, we believed it was necessary to conduct a comprehensive
analysis once again. Based on this analysis, we proposed changes to the
severity level designations for 1,492 ICD-10-CM diagnosis codes and
invited public comments on those proposals. As summarized in the FY
2020 IPPS/LTCH PPS final rule, many commenters expressed concern with
the proposed severity level designation changes overall and recommended
that CMS conduct further analysis prior to finalizing any proposals.
After careful consideration of the public comments we received, as
discussed further in the FY 2020 final rule, we generally did not
finalize our proposed changes to the severity designations for the ICD-
10-CM diagnosis codes, other than the changes to the severity level
designations for the diagnosis codes in category Z16 (Resistance to
antimicrobial drugs) from a NonCC to a CC. We stated that postponing
adoption
[[Page 58754]]
of the proposed comprehensive changes in the severity level
designations would allow further opportunity to provide additional
background to the public on the methodology utilized and clinical
rationale applied across diagnostic categories to assist the public in
its review. We refer readers to the FY 2020 IPPS/LTCH PPS final rule
(84 FR 42150 through 42152) for a complete discussion of our response
to public comments regarding the proposed severity level designation
changes for FY 2020.
As discussed in the FY 2021 IPPS/LTCH PPS proposed rule (85 FR
32550), to provide the public with more information on the CC/MCC
comprehensive analysis discussed in the FY 2020 IPPS/LTCH PPS proposed
and final rules, CMS hosted a listening session on October 8, 2019. The
listening session included a review of this methodology utilized to
mathematically measure the impact on resource use. We refer readers to
https://www.cms.gov/Outreach-and-Education/Outreach/OpenDoorForums/Downloads/10082019ListingSessionTrasncriptandQandAsandAudioFile.zip for
the transcript and audio file of the listening session. We also refer
readers to https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/AcuteInpatientPPS/MS-DRG-Classifications-and-Software.html for
the supplementary file containing the mathematical data generated using
claims from the FY 2018 MedPAR file describing the impact on resource
use of specific ICD-10-CM diagnosis codes when reported as a secondary
diagnosis that was made available for the listening session.
In the FY 2021 IPPS/LTCH PPS final rule (85 FR 58550 through
58554), we discussed our plan to continue a comprehensive CC/MCC
analysis, using a combination of mathematical analysis of claims data
as discussed in the FY 2020 IPPS/LTCH PPS proposed rule (84 FR 19235)
and the application of nine guiding principles and plan to present the
findings and proposals in future rulemaking. The nine guiding
principles are as follows:
Represents end of life/near death or has reached an
advanced stage associated with systemic physiologic decompensation and
debility.
Denotes organ system instability or failure.
Involves a chronic illness with susceptibility to
exacerbations or abrupt decline.
Serves as a marker for advanced disease states across
multiple different comorbid conditions.
Reflects systemic impact.
Post-operative/post-procedure condition/complication
impacting recovery.
Typically requires higher level of care (that is,
intensive monitoring, greater number of caregivers, additional testing,
intensive care unit care, extended length of stay).
Impedes patient cooperation or management of care or both.
Recent (last 10 years) change in best practice, or in
practice guidelines and review of the extent to which these changes
have led to concomitant changes in expected resource use.
We refer readers to the FY 2021 IPPS/LTCH PPS final rule for a
complete discussion of our response to public comments regarding the
nine guiding principles.
In the FY 2022 IPPS/LTCH PPS proposed rule (86 FR 25175 through
25180), as another interval step in our comprehensive review of the
severity designations of ICD-10-CM diagnosis codes, we requested public
comments on a potential change to the severity level designations for
``unspecified'' ICD-10-CM diagnosis codes that we were considering
adopting for FY 2022. Specifically, we noted we were considering
changing the severity level designation of ``unspecified'' diagnosis
codes to a NonCC where there are other codes available in that code
subcategory that further specify the anatomic site. As summarized in
the FY 2022 IPPS/LTCH PPS final rule, many commenters expressed concern
with the potential severity level designation changes overall and
recommended that CMS delay any possible change to the designation of
these codes to give hospitals and their physicians time to prepare.
After careful consideration of the public comments we received, we
maintained the severity level designation of the ``unspecified''
diagnosis codes currently designated as a CC or MCC where there are
other codes available in that code subcategory that further specify the
anatomic site for FY 2022. We refer readers to the FY 2022 IPPS/LTCH
PPS final rule (86 FR 44916 through 44926) for a complete discussion of
our response to public comments regarding the potential severity level
designation changes. Instead, for FY 2022, we finalized a new Medicare
Code Editor (MCE) code edit for ``unspecified'' codes, effective with
discharges on and after April 1, 2022. We stated we believe finalizing
this new edit would provide additional time for providers to be
educated while not affecting the payment the provider is eligible to
receive. We refer the reader to section II.D.14.e. of the FY 2022 IPPS/
LTCH PPS final rule (86 FR 44940 through 44943) for the complete
discussion.
As discussed in the FY 2023 IPPS/LTCH PPS final rule (87 FR 48866),
we stated that as the new unspecified code edit became effective
beginning with discharges on and after April 1, 2022, we believed it
was appropriate to not propose to change the designation of any ICD-10-
CM diagnosis codes, including the unspecified codes that are subject to
the ``Unspecified Code'' edit, as we continue our comprehensive CC/MCC
analysis to allow interested parties the time needed to become
acclimated to the new edit.
In the FY 2023 IPPS/LTCH proposed rule (87 FR 28177 through 28181),
we also requested public comments on how the reporting of diagnosis
codes in categories Z55-Z65 might improve our ability to recognize
severity of illness, complexity of illness, and/or utilization of
resources under the MS-DRGs. Consistent with the Administration's goal
of advancing health equity for all, including members of historically
underserved and under-resourced communities, as described in the
President's January 20, 2021 Executive Order 13985 on ``Advancing
Racial Equity and Support for Underserved Communities Through the
Federal Government,'' \7\ we stated we were also interested in
receiving feedback on how we might otherwise foster the documentation
and reporting of the diagnosis codes describing social and economic
circumstances to more accurately reflect each health care encounter and
improve the reliability and validity of the coded data including in
support of efforts to advance health equity.
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\7\ Available at: https://www.federalregister.gov/documents/2021/01/25/2021-01753/advancing-racial-equity-and-support-for-underserved-communities-through-the-federal-government.
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We noted that social determinants of health (SDOH) are the
conditions in the environments where people are born, live, learn,
work, play, worship, and age that affect a wide range of health,
functioning, and quality-of-life outcomes and risks.\8\ The subset of Z
codes that describe the social determinants of health are found in
categories Z55-Z65 (Persons with potential health hazards related to
socioeconomic and psychosocial circumstances). These codes describe a
range of issues related--but not limited--to education and literacy,
employment, housing, ability to obtain adequate amounts of food or safe
drinking water, and occupational
[[Page 58755]]
exposure to toxic agents, dust, or radiation.
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\8\ Available at: https://health.gov/healthypeople/objectives-and-data/social-determinants-health.
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We received numerous public comments that expressed a variety of
views on our comment solicitation, including many comments that were
supportive, and others that offered specific suggestions for our
consideration in future rulemaking. Many commenters applauded CMS'
efforts to encourage documentation and reporting of SDOH diagnosis
codes given the impact that social risks can have on health outcomes.
These commenters stated that it is critical that physicians, other
health care professionals, and facilities recognize the impact SDOH
have on the health of their patients. Many commenters also stated that
the most immediate and important action CMS could take to increase the
use of SDOH Z codes is to finalize the evidence-based ``Screening for
Social Drivers of Health'' and ``Screen Positive Rate for Social
Drivers of Health'' measures proposed to be adopted in the Hospital
Inpatient Quality Reporting (IQR) Program. In the FY 2023 IPPS/LTCH PPS
final rule (87 FR 49202 through 49220), CMS finalized the ``Screening
for Social Drivers of Health'' and ``Screen Positive Rate for Social
Drivers of Health'' measures in the Hospital Inpatient Quality
Reporting (IQR) Program. We refer readers to the FY 2023 IPPS/LTCH PPS
final rule (87 FR 48867 through 48872) for the complete discussion of
the public comments received regarding the request for information on
SDOH diagnosis codes as well as the following section of this final
rule for our proposed changes to the severity level designation for
certain diagnosis codes that describe homelessness for FY 2024, as well
as our finalization of that proposal.
As discussed in the FY 2024 IPPS/LTCH PPS proposed rule, we
continue to solicit feedback regarding the guiding principles, as well
as other possible ways we can incorporate meaningful indicators of
clinical severity. We have made available on the CMS website updated
impact on resource use files so that the public can review the
mathematical data for the impact on resource use generated using claims
from the FY 2019 through the FY 2022 MedPAR files. The link to these
files is posted on the CMS website at https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/AcuteInpatientPPS/MS-DRG-Classifications-and-Software. When providing additional feedback or
comments, we encourage the public to provide a detailed explanation of
how applying a suggested concept or principle would ensure that the
severity designation appropriately reflects resource use for any
diagnosis code. We also continue to be interested in receiving feedback
on how we might otherwise foster the documentation and reporting of the
most specific diagnosis codes supported by the available medical record
documentation and clinical knowledge of the patient's health condition
to more accurately reflect each health care encounter and improve the
reliability and validity of the coded data.
As discussed in the FY 2024 IPPS/LTCH PPS proposed rule (88 FR
26748), for new diagnosis codes approved for FY 2024, consistent with
our annual process for designating a severity level (MCC, CC, or NonCC)
for new diagnosis codes, we first review the predecessor code
designation, followed by review and consideration of other factors that
may be relevant to the severity level designation, including the
severity of illness, treatment difficulty, complexity of service and
the resources utilized in the diagnosis or treatment of the condition.
We noted that this process does not automatically result in the new
diagnosis code having the same designation as the predecessor code. We
refer the reader to section II.C.13 of this final rule for the
discussion of the finalized changes to the ICD-10-CM and ICD-10-PCS
coding systems for FY 2024.
c. Changes to Severity Levels
As discussed earlier in this section, in the FY 2023 IPPS/LTCH PPS
proposed rule (87 FR 28177 through 28181), we requested public comments
on how the reporting of diagnosis codes in categories Z55-Z65 might
improve our ability to recognize severity of illness, complexity of
illness, and/or utilization of resources under the MS-DRGs. We sought
comment on which specific SDOH Z codes were most likely to influence
(that is, increase) hospital resource utilization related to inpatient
care, including any supporting information that correlates inpatient
hospital resource use to specific SDOH Z codes. In the FY 2023 proposed
rule, we stated CMS believed a potential starting point for discussion
was consideration of the SDOH Z diagnosis codes describing homelessness
as homelessness can be reasonably expected to have an impact on
hospital utilization.
To further examine the diagnosis codes that describe SDOH, in the
FY 2023 proposed rule, we stated we reviewed the data on the impact on
resource use for diagnosis code Z59.0 (Homelessness) when reported as a
secondary diagnosis to facilitate discussion for the purposes of the
comment solicitation. We noted that prior to FY 2022, homelessness was
one of the more frequently reported codes that describe social
determinants of health. We also noted that effective FY 2022, the
subcategory was expanded and now included codes Z59.00 (Homelessness,
unspecified), Z59.01 (Sheltered homelessness), and code Z59.02
(Unsheltered homelessness).
We also displayed the impact on resource use data generated using
claims from the FY 2019 MedPAR file, FY 2020 MedPAR file and the FY
2021 MedPAR file, respectively, for the diagnosis code that describes
homelessness as a NonCC. We noted there was no data for codes Z59.01
(Sheltered homelessness) and code Z59.02 (Unsheltered homelessness) as
these codes became effective on October 1, 2021. We stated that when
examining diagnosis code Z59.0 (Homelessness) in FY 2019 and FY 2020,
the data suggested that when homelessness is reported as a secondary
diagnosis, the resources involved in caring for these patients are more
aligned with a CC than a NonCC or an MCC. However, in FY 2021, the data
suggested that the resources involved in caring for patients
experiencing homelessness are more aligned with a NonCC severity level
than a CC or an MCC severity level. We stated we were uncertain if the
data from FY 2021, in particular, reflected fluctuations that may be a
result of the public health emergency or even reduced hospitalizations
of certain conditions. We also stated we were uncertain if homelessness
may be underreported when there is not an available field on the claim
when other diagnoses are reported instead.
As discussed in the FY 2024 IPPS/LTCH PPS proposed rule, we again
reviewed the data on the impact on resource use for the ICD-10-CM SDOH
Z codes that describe homelessness, currently designated as NonCC, when
reported as a secondary diagnosis. The following table reflects the
impact on resource use data generated using claims from the September
2022 update of the FY 2022 MedPAR file. We refer readers to the FY 2008
IPPS/LTCH PPS final rule (72 FR 47159) for a complete discussion of our
historical approach to mathematically evaluate the extent to which the
presence of an ICD-10-CM code as a secondary diagnosis resulted in
increased hospital resource use, and the explanation of the columns in
the table.
[[Page 58756]]
[GRAPHIC] [TIFF OMITTED] TR28AU23.111
The table shows that the C1 is 1.75 for ICD-10-CM diagnosis code
Z59.00, 2.00 for ICD-10-CM diagnosis code Z59.01, and 2.12 for ICD-10-
CM diagnosis code Z59.02. A value close to 2.0 in column C1 suggests
that the secondary diagnosis is more aligned with a CC than a NonCC.
Because the C1 values in the table are generally close to 2, the data
suggest that when these three SDOH Z codes are reported as a secondary
diagnosis, the resources involved in caring for a patient experiencing
homelessness support increasing the severity level from a NonCC to a
CC. In the proposed rule, we noted the table also shows that the C2
finding was 2.19 for ICD-10-CM diagnosis code Z59.00, 2.24 for ICD-10-
CM diagnosis code Z59.01, and 2.35 for ICD-10-CM diagnosis code Z59.02.
A C2 value close to 2.0 suggests the condition is more like a CC than a
NonCC, but not as significant in resource usage as an MCC when there is
at least one other secondary diagnosis that is a CC but none that is an
MCC. Because the C2 values in the table are generally close to 2, we
stated that the data again suggested that when these three SDOH Z codes
are reported as a secondary diagnosis, the resources involved in caring
for a patient experiencing homelessness support increasing the severity
level from a NonCC to a CC.
As discussed in the FY 2021 IPPS/LTCH PPS final rule (85 FR 58550
through 58554), following the listening session on October 8, 2019, we
reconvened an internal workgroup comprised of clinicians, consultants,
coding specialists and other policy analysts to identify guiding
principles to apply in evaluating whether changes to the severity level
designations of diagnoses are needed and to ensure the severity
designations appropriately reflect resource use based on review of the
claims data, as well as consideration of relevant clinical factors (for
example, the clinical nature of each of the secondary diagnoses and the
severity level of clinically similar diagnoses) and improve the overall
accuracy of the IPPS payments. In considering the nine guiding
principles identified by the workgroup, as summarized previously, to
illustrate how they might be applied in evaluating changes to the
severity designations of diagnosis codes, in the FY 2024 IPPS/LTCH PPS
proposed rule we noted that homelessness is a circumstance that can
impede patient cooperation or management of care or both. In addition,
patients experiencing homelessness can require a higher level of care
by needing an extended length of stay. As discussed in the FY 2023
proposed rule, healthcare needs for patients experiencing homelessness
(sheltered,\9\ unsheltered,\10\ or unspecified) may be associated with
increased resource utilization.\11\ Healthcare needs for patients
experiencing homelessness may be associated with increased resource
utilization compared to other patients due to difficulty finding
discharge destinations to meet the patient's multifaceted needs which
can result in longer inpatient stays and can have financial impacts for
hospitals.\12\ Longer hospital stays for these patients \13\ can also
be associated with increased costs because patients experiencing
homelessness are less able to access care at early stages of illness,
and also may be exposed to communicable disease and harsh climate
conditions, resulting in more severe and complex symptoms by the time
they are admitted to hospitals, potentially leading to worse health
outcomes. Patients experiencing homelessness can also be
disproportionately affected by mental health diagnoses and issues with
substance use disorders. In addition, patients experiencing
homelessness may have limited or no access to prescription medicines or
over-the-counter medicines, including adequate locations to store
medications away from the heat or cold,\14\ and studies have shown
difficulties adhering to medication regimens among persons experiencing
homelessness.\15\
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\9\ ``Sheltered homelessness'' refers to people experiencing
homelessness who were found in emergency shelters, safe havens,
transitional housing, or other temporary settings. Department of
Housing and Urban Development (HUD) Press Release No. 22-022,
https://www.hud.gov/press/press_releases_media_advisories/
hud_no_22_022#:~:text=HUD%20Releases%202021%20Annual%20Homeless%20Ass
essment%20Report%20Part%201,-
Report%20Suggests%20that&text=%E2%80%9CSheltered%20homelessness%E2%80
%9D%20refers%20to%20people,housing%2C%20or%20other%20temporary%20sett
ings (accessed October 2022).
\10\ Unsheltered homelessness refers to ``a primary nighttime
residence that is a public or private place not designed for or
ordinarily used as a regularly sleeping accommodation for human
beings, including a car, park, abandoned building, bus or train
station, airport, or camping ground.'' HUD. 2011. HEARTH Homeless
Definition Final Rule, 24 CFR 578.3, https://www.govinfo.gov/content/pkg/FR-2011-12-05/pdf/2011-30942.pdf (accessed October
2022).
\11\ Koh HK, O'Connell JJ. Improving Health Care for Homeless
People. JAMA. 2016;316(24):2586-2587. doi:10.1001/jama.2016.18760.
\12\ Canham SL, Custodio K, Mauboules C, Good C, Bosma H. Health
and Psychosocial Needs of Older Adults Who Are Experiencing
Homelessness Following Hospital Discharge. Gerontologist. 2020 May
15;60(4):715-724. doi: 10.1093/geront/gnz078. PMID: 31228238.
https://pubmed.ncbi.nlm.nih.gov/31228238/.
\13\ Hwang SW, Weaver J, Aubry T. Hospital costs and length of
stay among homeless patients admitted to medical, surgical, and
psychiatric services. Med Care. 2011;49:350-354. https://journals.lww.com/lww-medicalcare/Fulltext/2019/01000/Trends,_Causes,_and_Outcomes_of_Hospitalizations.4.aspx.
\14\ Sun R (Agency for Healthcare Research and Quality (AHRQ)),
Karaca Z (AHRQ), Wong HS (AHRQ). Characteristics of Homeless
Individuals Using Emergency Department Services in 2014. Healthcare
Cost and Utilization Project (HCUP) Statistical Brief #229. October
2017. Agency for Healthcare Research and Quality, Rockville, MD.
www.hcup-us.ahrq.gov/reports/statbriefs/sb229-Homeless-ED-Visits-2014.pdf.
\15\ Coe, Antoinette B. Coe et al. ``Medication Adherence
Challenges Among Patients Experiencing Homelessness in a Behavioral
Health Clinic. https://journals.lww.com/lww-medicalcare/Fulltext/2019/01000/Trends,_Causes,_and_Outcomes_of_Hospitalizations.4.aspx.
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Therefore, after considering the C1 and C2 ratings of the three
ICD-10-CM diagnosis codes that describe
[[Page 58757]]
homelessness and consideration of the nine guiding principles, we
proposed to change the severity level designation for diagnosis codes
Z59.00 (Homelessness, unspecified), Z59.01 (Sheltered homelessness),
and Z59.02 (Unsheltered homelessness) from NonCC to CC for FY 2024. As
discussed in the FY 2023 IPPS/LTCH PPS final rule, if SDOH Z codes are
not consistently reported in inpatient claims data, our methodology
utilized to mathematically measure the impact on resource use, as
described previously, may not adequately reflect what additional
resources were expended by the hospital to address these SDOH
circumstances in terms of requiring clinical evaluation, extended
length of hospital stay, increased nursing care or monitoring or both,
and comprehensive discharge planning. In the proposed rule, we stated
we also expect that SDOH Z code reporting may continue to increase for
a number of reasons, for example, newer SDOH screening performed as a
result of new quality measures in the Hospital Inpatient Quality
Reporting program. We may consider proposed changes for other SDOH
codes in the future based on our analysis of the impact on resource
use, per our methodology, as previously described, and consideration of
the guiding principles. We further stated we also continue to be
interested in receiving feedback on how we might otherwise foster the
documentation and reporting of the diagnosis codes describing social
and economic circumstances to more accurately reflect each health care
encounter and improve the reliability and validity of the coded data
including in support of efforts to advance health equity.
Feedback and other suggestions may be submitted by October 20, 2023
and directed to the electronic intake system, Medicare Electronic
Application Request Information SystemTM
(MEARISTM) at: https://mearis.cms.gov/public/home.
Comment: Commenters expressed overwhelming support for our proposal
to change the severity level designation for diagnosis codes Z59.00
(Homelessness, unspecified), Z59.01 (Sheltered homelessness), and
Z59.02 (Unsheltered homelessness) from NonCC to CC for FY 2024. These
commenters stated this proposal acknowledges the impact of homelessness
as a social determinant of health, its implications for resource
utilization, and its costs to healthcare providers in effectively
addressing the healthcare needs of Medicare beneficiaries experiencing
homelessness. A commenter stated they especially appreciate thoughtful
policies that are data-driven and intended to bridge the gap of
compensation for providers who have been tirelessly caring for
underserved populations. Another commenter stated that this change will
confer enhanced financial resources to safety net hospitals, which care
for a disproportionate number of patients impacted by health-related
social risk factors. A commenter specifically stated that they see this
proposal as a watershed moment as it is the first time CMS will be
linking social determinants of health to payment in traditional
Medicare. Commenters stated that a change to the severity level
designation of the three diagnosis codes that describe homelessness
from NonCC to CC may increase voluntary reporting of these
circumstances, incentivize treating the whole patient, while enabling
CMS to assess homelessness-related impacts on illness severity, care
complexity, and hospital utilization to drive meaningful evaluation of
the association between these Z codes and outcomes. A few commenters
stated that based on their own analysis, homelessness has an effect on
resource utilization on par with other diagnoses currently designated
as MCCs but stated changing the designation to a CC is a logical and
necessary step.
Response: We thank the commenters for their support.
Comment: While commending CMS' efforts, many commenters noted an
operational concern in that currently only 25 diagnoses are captured on
the institutional claim form. Commenters stated that documenting and
reporting the social and economic circumstances patients may be
experiencing may require a substantial number of SDOH Z codes and
stated that this could lead to the crowding out of other diagnosis
codes that also need to be captured on the institutional claim form for
both payment and quality measures. A commenter stated that the
``Screening for Social Drivers of Health'' and ``Screen Positive Rate
for Social Drivers of Health'' measures in the Hospital Inpatient
Quality Reporting (IQR) Program, finalized in the FY 2023 IPPS/LTCH
final rule, will result in the need to include additional Z codes on
the claim to represent the findings of the SDOH screenings, further
limiting the space available. Commenters stated that given the number
of fields available to report diagnosis codes, it would be helpful if
CMS would instruct hospitals on how to prioritize the use of SDOH
diagnosis codes to ensure that all the medical diagnoses that govern
mortality and readmission rates are also captured. A few commenters
suggested that CMS evaluate the potential to expand the number of
diagnosis codes that can be submitted, or alternatively, design a
separate way to report the Z codes on the claim form, separate and
distinct from the fields for the diagnosis codes.
Response: We thank the commenters for their feedback. We note that
any proposed changes to the institutional claim form would need to be
submitted to the National Uniform Billing Committee (NUBC) for
consideration as the NUBC develops and maintains the Uniform Billing
(UB) 04 data set and form. The NUBC is a Data Content Committee named
in the Health Insurance Portability and Accountability Act of 1996
(HIPAA) and is composed of a diverse group of interested parties
representing providers, health plans, designated standards maintenance
organizations, public health organizations, and vendors.
Comment: Some commenters requested that CMS further explore other
SDOH diagnosis codes that could impact hospital resource use. These
commenters encouraged CMS to examine other SDOH Z codes that describe
circumstances such as food insecurity, lack of adequate food and
drinking water, extreme poverty, lack of transportation, inadequate
housing environmental temperature, and problems related to employment,
physical environment, social environment, upbringing, primary support
group, literacy, economic circumstances, and psychosocial circumstances
to determine the hospital resource utilization related to addressing
these factors and to analyze whether these SDOH Z codes should be
considered for severity designation changes in future rulemaking as
well. Other commenters also pointed to conditions outside of the SDOH Z
codes in categories Z55-Z65 such as: medical debt, malnutrition,
delirium due to a known physiological condition, elder abuse and
neglect, contact with and (suspected) exposure to hazards in the
physical environment, personal history of falling, personal history of
adult physical and sexual abuse, awaiting organ transplant status, and
underdosing of medication regimens as examples of other areas where
fostering better documentation and reporting, and considering severity
designation changes in future rulemaking, could improve health
outcomes.
Response: We appreciate the feedback. We will examine these
suggestions and determine if there are other diagnoses codes, including
diagnosis codes that describe SDOH, that should also be considered
further. We will consider these diagnosis codes
[[Page 58758]]
for changes to severity level designations, using a combination of
mathematical analysis of claims data and the application of nine
guiding principles, as we continue our comprehensive CC/MCC analysis
and will provide more detail in future rulemaking.
Comment: While supporting the proposal to designate the three ICD-
10-CM diagnosis codes describing homelessness as CCs, some commenters
expressed concern with the perceived diminished value that designating
homelessness as a CC when reported as a secondary diagnosis may have,
due to the expansion of the criteria for subdividing a base MS-DRG into
a three-way split. These commenters stated the application of the NonCC
subgroup criteria as demonstrated by the MS-DRG changes associated with
Table 6P.10--Potential MS-DRG Changes with Application of the NonCC
Subgroup Criteria and Detailed Data Analysis--FY 2024, associated with
the proposed rule, appears to frequently not recognize the need for a
severity level of CC by eliminating many ``with CC'' and ``without CC/
MCC'' MS-DRGs, meaning there is a potential for fewer MS-DRGs to be
impacted by the presence of homelessness as a CC. The commenters
further stated that if there are a limited number of MS-DRGs impacted
by the presence of a CC, the change of the severity designation of
these three diagnosis codes will not accomplish the desired
documentation and reporting goals.
Response: We appreciate the commenters' feedback and concern. We
concur with commenters that the application of the NonCC subgroup
criteria to existing MS-DRGs currently subdivided by a three-way
severity level split going forward may result in modifications to
certain MS-DRGs that are currently split into three severity levels and
potentially result in MS-DRGs that are proposed to be split into two
severity levels. As discussed in section II.C.1.b of the proposed rule,
we identified four base MS-DRGs currently subdivided with a three-way
severity level split that result in the potential creation of a single,
base MS-DRG. We refer the reader to Table 6P.10b associated with the
proposed rule (which is available on the CMS website at: https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/AcuteInpatientPPS) for the list of the 135 MS-DRGs that would be
subject to deletion and the list of the 86 new MS-DRGs that would
potentially be created if the NonCC subgroup criteria were applied.
In response to the commenters who expressed concern that changes to
the underlying MS-DRG structure would have the greatest impacts with
respect to particular MS-DRGs, as noted in prior rulemaking, we note
that generally, changes to the MS-DRG classifications and related
policies under the IPPS that are implemented on an annual basis,
including any potential MS-DRG updates to be considered for a future
proposal in connection with application of the NonCC subgroup criteria
to existing MS-DRGs with a three-way severity level split, would also
involve a redistribution of cases, which would impact the relative
weights, and, thus, the payment rates proposed for particular types of
cases. As discussed in the FY 2021 final rule (85 FR 58446), we believe
that applying these criteria to the NonCC subgroup of existing MS-DRGs
with a three-way severity level split would better reflect resource
stratification and also promote stability in the relative weights by
avoiding low volume counts for the NonCC level MS-DRGs. We refer the
reader to section II.C.1.b. of the preamble of this final rule for
related discussion regarding our finalization of the expansion of the
criteria to include the NonCC subgroup and our finalization of the
proposal to continue to delay application of the NonCC subgroup
criteria to existing MS-DRGs with a three-way severity level split.
Comment: A commenter stated that even though they applaud CMS'
efforts to recognize the underreporting of SDOH, they recommended only
changing the designation of diagnosis codes Z59.01 (Sheltered
homelessness) and Z59.02 (Unsheltered homelessness) from NonCC to CC.
This commenter stated that if the proposed change to the severity
designation of diagnosis code Z59.00 (Homelessness, unspecified) is
finalized, they envisioned payment oversight agencies would question
its significance and effect on resource utilization due to the
``unspecified'' code description, especially if code Z59.00 is the only
secondary diagnosis code designated as a CC on the claim.
Response: We thank the commenter for their feedback. We reviewed
the commenter's concern and note that whether the patient is
experiencing sheltered, unsheltered, or unspecified homelessness, the
patient may still have limited or no access to prescription medicines
or over-the-counter medicines, including adequate locations to store
medications away from the heat or cold, and have difficulties adhering
to medication regimens. We continue to believe that patients
experiencing homelessness (regardless of type) may be less able to
access care at early stages of illness, and also may be exposed to
communicable disease and harsh climate conditions, resulting in more
severe and complex symptoms by the time they are admitted to hospitals,
potentially leading to worse health outcomes. If SDOH Z codes are
consistently reported in inpatient claims data, our methodology
utilized to mathematically measure the impact on resource use may more
adequately reflect what additional resources were expended by the
hospital to address these SDOH circumstances in terms of requiring
clinical evaluation, extended length of hospital stay, increased
nursing care or monitoring or both, and comprehensive discharge
planning and we can reexamine these severity designations in future
rulemaking.
Comment: Some commenters thanked CMS for its continued interest in
receiving feedback on documentation and reporting of the ICD-10-CM
diagnosis SDOH Z codes, yet stated there continue to be many challenges
for clinicians in documenting SDOH, such as the lack of knowledge
surrounding these codes, the time and burden associated with adding
them to a patient's problem list, and the perceived inability to do
anything with the information. Other commenters stated assigning codes
for SDOH can be a time-consuming and labor-intensive process, as many
electronic health records (EHRs) do not have pathways to add a Z code
to the problem or diagnosis list. These commenters stated prioritizing
provider education on the reporting of Z codes and offering support
mechanisms, including the use of incentives, would significantly
improve the acquisition of SDOH data, as such data is essential in
helping health systems better anticipate needs and help vulnerable
patients receive support at both the individual and population levels.
Another commenter stated that given the administrative and operational
challenges for providers associated with capturing SDOH data, they
recommended CMS delay implementation of the change in severity level
designation of diagnosis codes Z59.00, Z59.01, and Z59.02 by one year
so that providers may continue to adapt their processes and workflows
to properly capture the homelessness Z codes. This commenter stated
that although the proposed change would not require additional work for
providers beyond reporting the codes, the act of reporting itself is
still a broad change to hospital coding practices and electronic health
record (EHR) use that
[[Page 58759]]
they believe deserves additional time for provider adoption.
Response: We appreciate the feedback. We note that the ICD-10-CM
Official Guidelines for Coding and Reporting have been regularly
revised to provide additional guidance as it relates to diagnosis codes
describing social determinants of health diagnosis. Specifically,
Section I.C.21.c.17 of the ICD-10-CM Official Guidelines for Coding and
Reporting were updated:
Effective October 1, 2021, to clarify that code assignment
may be based on medical record documentation from clinicians involved
in the care of the patient who are not the patient's provider and that
patient self-reported documentation may be used to assign codes for
social determinants of health, as long as the patient self-reported
information is signed-off by and incorporated into the medical record
by either a clinician or provider;
Effective October 1, 2022, to clarify that SDOH codes
should be assigned only when the documentation specifies that the
patient has an associated problem or risk factor; and
Effective April 1, 2023, to provide more guidance on
reporting SDOH and to provide more examples to facilitate the capture
of these data.
We encourage the commenters to review the Official ICD-10-CM Coding
Guidelines, which can be found on the CDC website at: https://www.cdc.gov/nchs/icd/icd10.htm. The American Hospital Association
(AHA)'s Coding Clinic for ICD-10-CM/PCS publication has provided
further clarification on the appropriate documentation and use of Z
codes to enable hospitals to incorporate them into their processes. The
AHA also offers a range of tools and resources for hospitals, health
systems and clinicians to address the social needs of their patients.
We believe these updates and resources will help alleviate the concerns
expressed by these commenters. As one of the four Cooperating Parties
for ICD-10, we will continue to collaborate with the AHA to provide
guidance for coding problems or risk factors related to SDOH through
the AHA's Coding Clinic for ICD-10-CM/PCS publication and to review the
ICD-10-CM Coding Guidelines to determine where further clarifications
may be made.
In response to commenters that state there continue to be many
challenges for clinicians in documenting SDOH, such as the time and
burden associated with adding them to a patient's problem list, and
state that many electronic health records (EHRs) do not have pathways
to add a Z code to the problem or diagnosis list, the Office of the
Assistant Secretary for Planning and Evaluation (ASPE), the principal
advisor to the Secretary of the U.S. Department of Health and Human
Services, conducted interviews with six electronic health records
(EHRs) vendors with large market shares in both ambulatory and
inpatient settings to investigate the development of software products
that allow health care providers to identify and address patients SDOH
in health care settings. The findings of the study indicate commercial
vendors appear to be ready to collaboratively discuss policy solutions,
such as standards or guidelines with each other, health care systems,
and government agencies in order to further promote integration of SDOH
data into the standard of care for all health systems.\16\ We further
note that on April 18, 2023, the Office of the National Coordinator
proposed updated certification standards (USCDI v3) that would, if
finalized, require certified EHR vendors to include four SDOH data
elements: SDOH Assessment, Goals, Interventions, Problems/Health
Concerns.\17\
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\16\ Freij M, Dullabh P, Lewis S, Smith SR, Hovey L,
Dhopeshwarkar R. Incorporating Social Determinants of Health in
Electronic Health Records: Qualitative Study of Current Practices
Among Top Vendors. JMIR Med Inform. 2019 Jun 7;7(2):e13849. doi:
10.2196/13849. PMID: 31199345; PMCID: PMC6592390. https://aspe.hhs.gov/sites/default/files/migrated_legacy_files/185561/NORCSDH.pdf.
\17\ 88 FR 23746 (https://www.federalregister.gov/d/2023-07229/p-318).
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In response to the suggestion that CMS delay implementation of the
change to the severity level designation of diagnosis codes Z59.00,
Z59.01, and Z59.02 by one year so that providers may continue to adapt
their processes and workflows to properly capture the diagnosis codes
describing homelessness, we reviewed the commenters' concern and do not
agree that a delay is necessary or appropriate. As discussed in the
proposed rule, and previously in this section, when examining the data
on the impact on resource use for the ICD-10-CM SDOH Z codes that
describe homelessness from the FY 2019, FY 2020, and FY 2022 MedPAR
files, the data suggested that when homelessness is reported as a
secondary diagnosis, the resources involved in caring for these
patients are more aligned with a CC than a NonCC. After considering the
C1 and C2 ratings of the three ICD-10-CM diagnosis codes that describe
homelessness and consideration of the nine guiding principles, we
believe changing the severity level designation for diagnosis codes
Z59.00 (Homelessness, unspecified), Z59.01 (Sheltered homelessness),
and Z59.02 (Unsheltered homelessness) from NonCC to CC at this time to
be prudent, without the need for further delay.
Therefore, after consideration of the public comments received, we
are finalizing changes to the severity levels for diagnosis codes
Z59.00 (Homelessness, unspecified), Z59.01 (Sheltered homelessness),
and Z59.02 (Unsheltered homelessness), from NonCC to CC for FY 2024,
without modification. In addition, these diagnosis codes are reflected
in Table 6J.1--Additions to the CC List--FY 2024 associated with this
final rule and available at: https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/AcuteInpatientPPS. We refer the reader to section
II.C.13 of the preamble of the proposed rule and this final rule for
further information regarding Table 6J.1.
We again thank commenters for sharing their views and their
willingness to support CMS in these efforts. We will take the
commenters' feedback into consideration in future policy development.
We hope and expect that this finalization will foster the increased
documentation and reporting of the diagnosis codes describing social
and economic circumstances and serve as an example for providers that
when they document and report Z codes, CMS can further examine the
claims data and consider future changes to the designation of these
codes when reported as a secondary diagnoses. CMS will continue to
monitor and evaluate the reporting of the diagnosis codes describing
social and economic circumstances, including diagnosis codes Z59.00
(Homelessness, unspecified), Z59.01 (Sheltered homelessness), and
Z59.02 (Unsheltered homelessness).
Additionally, as discussed in the FY 2024 IPPS/LTCH PPS proposed
rule, we received a request to change the severity level designations
of three ICD-10-CM diagnosis codes. The requestor suggested the
severity level of ICD-10-CM diagnosis code K76.72 (Hepatic
encephalopathy) be changed from NonCC to CC or MCC; N14.11 (Contrast-
induced nephropathy) be changed from NonCC to CC; and S06.2XAA (Diffuse
traumatic brain injury with loss of consciousness status unknown,
initial encounter) be changed from CC to MCC.
In the proposed rule, we noted that these three diagnosis codes
became effective with discharges on and after October 1, 2022 (FY
2023), and the current claims data from the September 2022 update of
the FY 2022 MedPAR file did not yet reflect these new diagnosis codes.
The proposed and finalized severity level designations for
[[Page 58760]]
these ICD-10-CM diagnosis codes were displayed in Table 6A- New
Diagnosis Codes (associated with the FY 2023 proposed rule and final
rule and are available on the CMS website at https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/AcuteInpatientPPS). As
discussed earlier in this section, for new diagnosis codes approved for
each fiscal year, consistent with our annual process for designating a
severity level (MCC, CC, or NonCC) for new diagnosis codes, in
establishing the severity level of these codes, we first reviewed the
predecessor code designation, followed by review and consideration of
other factors that may be relevant to the severity level designation,
including the severity of illness, treatment difficulty, complexity of
service and the resources utilized in the diagnosis or treatment of the
condition.
Specifically, the predecessor code for K76.72 (Hepatic
encephalopathy) was diagnosis code K72.90 (Hepatic failure, unspecified
without coma), which is designated as a NonCC. We stated when we
reviewed and considered the factors as described previously, we did not
believe that the resources required for hepatic encephalopathy exceeded
the resources required for patients with hepatic failure, unspecified
without coma as both conditions require treatment to rid the body of
toxins. Therefore, our proposed and finalized severity level
designation for hepatic encephalopathy was also a NonCC for FY 2023.
Similarly, the predecessor code for N14.11 (Contrast-induced
nephropathy) was diagnosis code N14.1 (Nephropathy induced by other
drugs, medicaments and biological substances), which was designated as
a NonCC. After review and consideration of the factors as described
previously, we did not believe that the resources required for
contrast-induced nephropathy exceeded the resources required for
patients with nephropathy induced by other drugs, medicaments and
biological substances, as code N14.11 was created as an expansion of
the subcategory to identify contrast dyes as the substance causing
nephropathy. Before the implementation of N14.11, the diagnosis was
identified with code N14.1. Therefore, our proposed and finalized
severity level designation for contrast-induced nephropathy was also a
NonCC. Lastly, the predecessor code for S06.2XAA (Diffuse traumatic
brain injury with loss of consciousness status unknown, initial
encounter) was diagnosis code S06.2X9A (Diffuse traumatic brain injury
with loss of consciousness of unspecified duration, initial encounter),
which is designated as a CC. When we reviewed and considered the
factors as described previously, we did not believe that the resources
required for diffuse traumatic brain injury with loss of consciousness
status unknown, initial encounter exceeded the resources required for
diffuse traumatic brain injury with loss of consciousness of
unspecified duration, initial encounter, therefore our proposed and
finalized severity level designation for diffuse traumatic brain injury
with loss of consciousness status unknown, initial encounter was also a
CC.
As stated in prior rulemaking (85 FR 58560), generally, the
proposed severity level ultimately depends on clinical judgement and,
where the data is available, the empirical analysis of the additional
resources associated with the secondary diagnosis. The impact of the
secondary diagnosis is dependent on the principal diagnosis reported,
with which it is associated. If the secondary diagnosis is reported
primarily with a principal diagnosis that reflects serious illness with
treatment complexity, then the marginal contribution of the secondary
diagnosis to the overall resource use may actually be relatively small.
We stated in the proposed rule we continue to believe that in the
absence of claims data, the severity designation of these three codes
as established in FY 2023 rulemaking is appropriate.
We further stated we believed that claims data reflecting the
reporting of these new diagnosis codes are needed for analysis prior to
proposing changes to these three diagnosis codes. As stated earlier in
this section, we plan to continue a comprehensive CC/MCC analysis,
using a combination of mathematical analysis of claims data and the
application of nine guiding principles. We stated we believed it was
appropriate to consider these requests in connection with our continued
comprehensive CC/MCC analysis in future rulemaking, using the available
claims data, rather than proposing to change the designation of these
individual ICD-10-CM diagnosis codes in the absence of such data at
this time. We will consider these individual requests received for
changes to severity level designations as we continue our comprehensive
CC/MCC analysis and will provide more detail in future rulemaking.
Comment: Commenters stated that they support CMS' decision not to
propose to change the severity level designation of diagnosis codes
K76.72 (Hepatic encephalopathy), N14.11 (Contrast-induced nephropathy)
and S06.2XAA (Diffuse traumatic brain injury with loss of consciousness
status unknown, initial encounter) at this time and to consider these
requests in connection with our continued comprehensive CC/MCC analysis
in future rulemaking. A commenter specifically stated they appreciate
CMS moving cautiously with changes that could cause considerable
upheaval during this time of unprecedented stress on hospitals and
encouraged CMS to continue careful assessment of significant changes in
the future. However, another commenter expressed concern that CMS
continues to not be able to undertake a comprehensive analysis of the
severity designation of the diagnosis codes in the ICD-10-CM
classification. The commenter stated they believed that the nation is
being negatively impacted since, in their opinion, some diagnoses
currently designated as an MCC (for example severe malnutrition) do not
require the resources inherent to a MCC whereas others that do (for
example cardiac tamponade) are not designated as such. This commenter
further stated it would be helpful if CMS made a proposed list of
severity level designation changes available along with the impact on
resource use files generated using claims from the FY 2019 through the
FY 2022 MedPAR files that have been made publicly available on the CMS
website.
Response: We thank the commenters for their support and appreciate
the feedback. With respect to CMS not being able to undertake a
comprehensive analysis, we note that in the FY 2020 IPPS/LTCH PPS
proposed rule (84 FR 19235 through 19246) we stated that with the
transition to ICD-10-CM and the significant changes that have occurred
to diagnosis codes since the FY 2008 review, we believed it was
necessary to conduct a comprehensive analysis once again and therefore
proposed changes to the severity level designations for 1,492 ICD-10-CM
diagnosis codes. As summarized in the FY 2020 IPPS/LTCH PPS final rule,
after careful consideration of the public comments we received in
response, we generally did not finalize our proposed changes to the
severity designations for the ICD-10-CM diagnosis codes, other than the
changes to the severity level designations for the diagnosis codes in
category Z16- (Resistance to antimicrobial drugs) from a NonCC to a CC.
We stated that postponing adoption of the proposed comprehensive
changes in the severity level designations would allow further
opportunity to provide additional background to the public on the
methodology utilized and clinical
[[Page 58761]]
rationale applied across diagnostic categories to assist the public in
its review.
Since that time, CMS has taken interval steps to continue a
comprehensive CC/MCC analysis. First, CMS hosted a listening session on
October 8, 2019, to review the methodology utilized to mathematically
measure the impact on resource use. In the FY 2021 IPPS/LTCH PPS final
rule (85 FR 58550 through 58554), we discussed our plan to continue a
comprehensive CC/MCC analysis, using a combination of mathematical
analysis of claims data and the application of nine guiding principles.
In the FY 2022 IPPS/LTCH PPS proposed rule (86 FR 25175 through 25180),
as another interval step in our comprehensive review of the severity
designations of ICD-10-CM diagnosis codes, we requested public comments
on a potential change to the severity level designations for
``unspecified'' ICD-10-CM diagnosis codes that we were considering
adopting for FY 2022. In the FY 2022 IPPS/LTCH PPS final rule (86 FR
44940 through 44943), instead of changing the severity level
designations of the ``unspecified'' ICD-10-CM diagnosis codes
identified, we finalized a new Medicare Code Editor (MCE) code edit for
``unspecified'' codes, effective with discharges on and after April 1,
2022. We stated we believed finalizing this new edit would provide
additional time for providers to be educated while not affecting the
payment the provider is eligible to receive. As discussed in the FY
2023 IPPS/LTCH PPS final rule (87 FR 48866), as the new unspecified
edit became effective beginning with discharges on and after April 1,
2022, we believed it was appropriate to not propose to change the
designation of any ICD-10-CM diagnosis codes, including the unspecified
codes that are subject to the ``Unspecified Code'' edit, to allow
interested parties the time needed to become acclimated to the new
edit.
In the FY 2023 IPPS/LTCH proposed rule (87 FR 28177 through 28181),
we requested public comments on how the reporting of diagnosis codes in
categories Z55-Z65 might improve our ability to recognize severity of
illness, complexity of illness, and/or utilization of resources under
the MS-DRGs. In addition, we have provided updated impact on resource
use files so that the public can review the mathematical data for the
impact on resource use generated using claims from the FY 2018, FY
2019, FY 2020, FY 2021 and the FY 2022 MedPAR files, respectively at
https://www.cms.gov/Medicare/MedicareFee-for-Service-Payment/AcuteInpatientPPS/MS-DRG-Classifications-and-Software.html.
Considering the potential impact of implementing a significant
number of severity designation changes, and in light of the public
health emergency (PHE) that was occurring concurrently during much of
this timeframe, we believe these interval steps were appropriate as we
plan to continue a comprehensive CC/MCC analysis, using a combination
of mathematical analysis of claims data and the application of nine
guiding principles. We continue to solicit comments regarding the nine
guiding principles, as well as other possible ways we can incorporate
meaningful indicators of clinical severity. We encourage commenters to
provide a detailed explanation of how applying a suggested concept or
principle would ensure that the severity designation appropriately
reflects resource use for ICD-10-CM codes when reported as secondary
diagnoses. Commenters should submit their recommendations by October
20, 2023 via the electronic intake system, Medicare Electronic
Application Request Information SystemTM
(MEARISTM) at: https://mearis.cms.gov/public/home. With
respect to the suggestion that CMS make a proposed list of severity
level designation changes available along with the impact on resource
use files generated using claims from the fiscal year MedPAR files, we
appreciate the feedback and will take this suggestion under
consideration.
After consideration of the public comments we received, and for the
reasons discussed, we are finalizing our proposal, without
modification, to maintain the current severity level designation of
diagnosis codes K76.72 (Hepatic encephalopathy), N14.11 (Contrast-
induced nephropathy), and S06.2XAA (Diffuse traumatic brain injury with
loss of consciousness status unknown, initial encounter) for FY 2024.
d. Additions and Deletions to the Diagnosis Code Severity Levels for FY
2024
In the FY 2024 IPPS/LTCH PPS proposed rule (88 FR 26750), we noted
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 2024
and are available 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 2024;
Table 6I.2--Proposed Deletions to the MCC List FY 2024;
Table 6J.1--Proposed Additions to the CC List FY 2024; and
Table 6J.2--Proposed Deletions to the CC List FY 2024.
Comment: Commenters agreed with the proposed additions and
deletions to the MCC and CC lists as shown in tables 6I.1, 6I.2, 6J.1,
and 6J.2 associated with the proposed rule.
Response: We appreciate the commenters' support.
The following tables associated with this final rule reflect the
finalized severity levels under Version 41 of the ICD-10 MS-DRGs for FY
2024 and are available on the CMS website at: https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/AcuteInpatientPPS; Table 6I.
--Complete MCC List--FY 2024; Table 6I.1--Additions to the MCC List--FY
2024; Table 6I.2--Deletions to the MCC List--FY 2024; Table 6J.--
Complete CC List--FY 2024; Table 6J.1--Additions to the CC List--FY
2024; and Table 6J.2--Deletions to the CC List--FY 2024.
e. CC Exclusions List for FY 2024
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;
[[Page 58762]]
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.
The ICD-10 MS-DRGs Version 40.1 CC Exclusion List is included as
Appendix C in the ICD-10 MS-DRG Definitions Manual, which is available
on the CMS website at: https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/AcuteInpatientPPS/index.html, and includes two lists
identified as Part 1 and Part 2. Part 1 is the list of all diagnosis
codes that are defined as a CC or MCC when reported as a secondary
diagnosis. For all diagnosis codes on the list, a link is provided to a
collection of diagnosis codes which, when reported as the principal
diagnosis, would cause the CC or MCC diagnosis to be considered as a
NonCC. Part 2 is the list of diagnosis codes designated as an MCC only
for patients discharged alive; otherwise, they are assigned as a NonCC.
In the FY 2024 IPPS/LTCH PPS proposed rule, we proposed additional
changes to the ICD-10 MS-DRGs Version 41 CC Exclusion List based on the
diagnosis and procedure code updates as discussed in section II.C.13.
of the proposed rule and set forth in Tables 6G.1, 6G.2, 6H.1, and 6H.2
associated with the proposed rule and available on the CMS website at:
https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/AcuteInpatientPPS.
As discussed in section II.C.13 of the preamble of this final rule,
we are finalizing, without modification, the proposed assignments and
designations for the diagnosis codes after consideration of the public
comments received. Therefore, the finalized CC Exclusions List as
displayed in Tables 6G.1, 6G.2, 6H.1, 6H.2, and 6K, associated with
this final rule reflect the severity levels under V41 of the ICD-10 MS-
DRGs. We have developed Table 6G.1.--Secondary Diagnosis Order
Additions to the CC Exclusions List--FY 2024; Table 6G.2.--Principal
Diagnosis Order Additions to the CC Exclusions List--FY 2024; Table
6H.1.--Secondary Diagnosis Order Deletions to the CC Exclusions List--
FY 2024; and Table 6H.2.--Principal Diagnosis Order Deletions to the CC
Exclusions List--FY 2024; and Table 6K. Complete List of CC
Exclusions--FY 2024.
For Table 6G.1, each secondary diagnosis code finalized for
addition to the CC Exclusion List is shown with an asterisk and the
principal diagnoses finalized 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 finalized 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
finalized 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 finalized 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 final rule are available on the CMS website at:
https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/AcuteInpatientPPS/index.html.
As discussed in the proposed rule, we also noted that in our review
of the CC Exclusion List that we identified a total of 668 diagnosis
codes currently listed on various principal diagnosis collection lists
that are not able to be reported as a principal diagnosis based on the
ICD-10-CM Official Guidelines for Coding and Reporting. In addition,
these codes are listed on the Medicare Code Editor (MCE) code edit
lists for Unacceptable Principal Diagnosis or Manifestations not
allowed as Principal Diagnosis. Therefore, we stated we believed it was
appropriate to remove these codes from the affected principal diagnosis
collection lists for V41 of the GROUPER. Because we were unable to
reflect these changes in Table 6G.1., 6G.2., 6H.1., or 6H.2 at the time
of the development of the proposed rule, we provided a supplementary
table, Table 6H.3--Principal Diagnosis Codes for Removal from CC
Exclusion List--FY 2024 listing each of these 668 diagnosis codes,
including the code descriptions, the applicable MCE edit, and the
current principal diagnosis collection list(s) where each code is
currently listed and from which the code would be removed for the final
FY 2024 V41 GROUPER. Table 6H.3 associated with the proposed rule is
available on the CMS website at: https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/AcuteInpatientPPS/index.html.
The ICD-10 MS-DRGs Version 41 CC Exclusion List is included as
Appendix C of the Definitions Manual (available in two formats; text
and HTML). The manuals are available on the CMS website at: https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/AcuteInpatientPPS/MS-DRG-Classifications-and-Software and each format
includes two lists identified as Part 1 and Part 2. Part 1 is the list
of all diagnosis codes that are defined as a CC or MCC when reported as
a secondary diagnosis. For all diagnosis codes on the list, a link
(HTML version) is provided to a collection of diagnosis codes which,
when used as the principal diagnosis, would cause the CC or MCC
diagnosis to be considered as a NonCC. Part 2 is the list of diagnosis
codes designated as a MCC only for patients discharged alive;
otherwise, they are assigned as a NonCC.
13. Changes to the ICD-10-CM and ICD-10-PCS Coding Systems
To identify new, revised and deleted diagnosis and procedure codes,
for FY 2024, 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 final rule.
These tables are not published in the Addendum to the proposed rule
or final rule, but are available 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 final rule. As discussed in section II.C.16. of the
preamble of the proposed rule and this final rule, the code titles are
adopted as part of the ICD-10 Coordination and Maintenance Committee
meeting 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.
In the FY 2024 IPPS/LTCH PPS proposed rule (88 FR 26752), we
proposed the MDC and MS-DRG assignments for the new diagnosis codes and
procedure codes as set forth in Table 6A.--New Diagnosis Codes and
Table 6B.--New Procedure Codes. We also stated that 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
[[Page 58763]]
procedure codes are set forth in Table 6B. Consistent with our
established process, we examined the MS-DRG assignment and the
attributes (severity level and O.R. status) of the predecessor
diagnosis or procedure code, as applicable, to inform our proposed
assignments and designations.
Specifically, we reviewed the predecessor code and MS-DRG
assignment most closely associated with the new diagnosis or procedure
code, and in the absence of claims data, we considered other factors
that may be relevant to the MS-DRG assignment, including the severity
of illness, treatment difficulty, complexity of service and the
resources utilized in the diagnosis and/or treatment of the condition.
We noted that this process does not automatically result in the new
diagnosis or procedure code being proposed for assignment to the same
MS-DRG or to have the same designation as the predecessor code.
In this section of this rule, we summarize the public comments
received for Table 6A and Table 6B and provide our responses.
Comment: A commenter applauded the addition of diagnosis code
Z29.81 (Encounter for HIV pre-exposure prophylaxis) (PrEP) and
encouraged ongoing monitoring of the code to ensure appropriate
billing. The commenter stated a diagnostic code for PrEP has the
opportunity to improve HIV prevention efforts for patients at the point
of care. According to the commenter, HIV remains an issue in every
region of the United States (U.S.) and significant gaps persist in
ongoing HIV preventive care in clinical practice, including early
detection of HIV and linking patients to appropriate prevention
services, such as PrEP.
Response: We thank the commenter for their feedback.
Comment: A commenter stated that CMS proposed the severity level
designation for diagnosis code O90.41 (Hepatorenal syndrome following
labor and delivery) to the MCC list, proposed the removal of diagnosis
code O90.4 (Postpartum acute kidney failure) from the MCC list (since
the code will no longer be valid), and proposed to add several
diagnosis codes describing osteoporosis and intrahepatic cholestasis of
pregnancy codes to the CC list. However, according to the commenter,
CMS did not include a proposal to add diagnosis code O26.649
(Intrahepatic cholestasis of pregnancy, unspecified trimester) to the
CC list. The commenter stated that in FY 2022, CMS finalized
maintaining the severity level designation of ``unspecified'' diagnosis
codes as CC or MCC where there are other codes available in the code
subcategory that further specify the anatomic site for purposes of a
new Medicare Code Editor (MCE) ``Unspecified code edit'' effective with
discharges on or after April 1, 2022. As such, the commenter requested
consideration for the addition of diagnosis code O26.649 (Intrahepatic
cholestasis of pregnancy, unspecified trimester) to the CC list to be
in alignment with the other diagnosis codes describing intrahepatic
cholestasis of pregnancy first trimester, second trimester, and third
trimester (codes O26.641, O26.642, and O26.643, respectively) or to
consider adding as a diagnosis subject to the ``unspecified'' code
edit.
Response: We appreciate the commenters' feedback. We are providing
clarification that the Unspecified code edit is only applicable to
diagnosis codes that are (1) defined as an unspecified code in the
classification by the title description, (2) currently designated as a
CC or MCC, and (3) able to be further specified by laterality (right,
left, or bilateral) for the anatomic site by other codes in the code
subcategory. Because the other intrahepatic cholestasis of pregnancy
codes do not include laterality in their code title descriptions, and
code O26.649 is not a CC or MCC, the intrahepatic cholestasis of
pregnancy, unspecified trimester code (O26.649) is unable to be
considered for addition to the Unspecified code edit. We also note that
consistent with our established process, we examined the severity level
for the predecessor code to determine the most appropriate severity
level designation. The predecessor code for code O26.649 is diagnosis
code O26.619 (Liver and biliary tract disorders in pregnancy,
unspecified trimester), as reflected in the FY 2024 ICD-10-CM
Conversion Table (available on the CMS web page at: https://www.cms.gov/medicare/icd-10/2024-icd-10-cm) and is designated as a
NonCC. Therefore, consistent with the designation of that predecessor
code, we proposed to designate code O26.649 as a NonCC.
Comment: A couple commenters requested that CMS change the MS-DRG
assignment for new procedure codes X2H03R9 (Insertion of intraluminal
device, bioprosthetic valve into inferior vena cava, percutaneous
approach, new technology group (9) and X2H13R9 (Insertion of
intraluminal device, bioprosthetic valve into superior vena cava,
percutaneous approach, new technology group 9) that describe insertion
of the TricValve[supreg] Bicaval Valve System from MS-DRGs 252, 253,
and 254 (Other Vascular Procedures with MCC, with CC, and without CC/
MCC, respectively) to MS-DRGs 266 and 267 (Endovascular Cardiac Valve
Replacement and Supplement Procedures with and without MCC,
respectively). According to the commenters, these procedures describe
bioprostheses that replace the function of the diseased tricuspid valve
while leaving the native valve in place. A commenter stated that while
the ICD-10-PCS codes are new and do not yet have cost data associated
with them, cases reporting use of the devices will require resources
and work similar to other endovascular cardiac valve replacement
procedures, such as placement within the major vessels and heart to
treat valve disease. The commenter urged CMS to consider moving
procedure codes X2H03R9 and X2H13R9 to MS-DRGs 266 and 267 and to
monitor the costs of these procedures going forward to ensure
appropriate assignment. Another commenter stated the TricValve[supreg]
replaces the function of the tricuspid valve and should be described as
a replacement procedure with assignment to MS-DRGs 266 and 267.
Response: We appreciate the commenters' feedback. We note that as
reflected in Table 6B.--New Procedure Codes, associated with the FY
2024 IPPS/LTCH PPS proposed rule, we finalized the two procedure codes
(X2H03R9 and X2H13R9) after consideration of public comments from the
September 13, 2022 ICD-10 Coordination and Maintenance (C&M) Committee
meeting. We note that under the ICD-10-PCS classification, the root
operation Replacement is defined as: Putting in or on biological or
synthetic material that physically takes the place and/or function of
all or a portion of a body part. As such, the TricValve[supreg]
technology is not literally replacing the tricuspid valve as defined
under ICD-10-PCS and the body part is not the tricuspid valve, rather,
the site of the procedure is the superior vena cava (SVC) and inferior
vena cava (IVC). Therefore, while the intent of the technology is to
replace the function of the tricuspid valve, the procedure to place the
bicaval valve system is not literally doing that and the native
tricuspid valve is left in place. Using our established process, we
proposed the Operating Room (O.R.) designations, MDC and MS-DRG
assignments based on the predecessor code assignments. The predecessor
code for procedure code X2H03R9 is procedure code 06H03DZ (Insertion of
intraluminal device into inferior vena cava, percutaneous approach) and
the
[[Page 58764]]
predecessor code for procedure code X2H13R9 is procedure code 02HV3DZ
(Insertion of intraluminal device into superior vena cava, percutaneous
approach), as reflected in the FY 2024 ICD-10-PCS Conversion Table
(available on the CMS web page at: https://www.cms.gov/medicare/icd-10/2024-icd-10-pcs). The predecessor code 06H03DZ is designated as non-
O.R. while the predecessor code 02HV3DZ is designated as an O.R.
procedure and is assigned to MS-DRGs 252, 253, and 254. Therefore, we
proposed that code X2H03R9 also be designated as non-O.R. and code
02HV3DZ be designated as O.R. and assigned to MS-DRGs 252, 253, and
254. Because the TricValve[supreg] technology requires the reporting of
both procedure codes (X2H03R9 and X2H13R9) as a ``pair'', cases
reporting the procedure were proposed for assignment to MS-DRGs 252,
253, and 254.
For the reasons discussed, we are maintaining the severity level
assignment for diagnosis code O26.649 as NonCC and finalizing the MS-
DRG assignment for procedure codes X2H03R9 and X2H13R9 to MS-DRGs 252,
253, and 254. We will continue to monitor the claims data when it
becomes available to determine if additional modifications are
warranted.
After consideration of the public comments received, we are
finalizing the MDC and MS-DRG assignments for the new diagnosis codes
and procedure codes as set forth in Table 6A.--New Diagnosis Codes and
Table 6B.--New Procedure Codes associated with this final rule. In
addition, the finalized severity level designations for the new
diagnosis codes are set forth in Table 6A. and the finalized O.R.
status for the new procedure codes are set forth in Table 6B associated
with this final rule.
We are making available on the CMS website at https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/AcuteInpatientPPS/index.html
the following tables associated with this final rule:
Table 6A.--New Diagnosis Codes--FY 2024.
Table 6B.--New Procedure Codes--FY 2024.
Table 6C.--Invalid Diagnosis Codes--FY 2024.
Table 6D.--Invalid Procedure Codes--FY 2024;
Table 6E.--Revised Diagnosis Code Titles--FY 2024.
Table 6F.--Revised Procedure Code Titles--FY 2024.
Table 6G.1.--Secondary Diagnosis Order Additions to the CC
Exclusions List--FY 2024.
Table 6G.2.--Principal Diagnosis Order Additions to the CC
Exclusions List--FY 2024.
Table 6H.1.--Secondary Diagnosis Order Deletions to the CC
Exclusions List--FY 2024.
Table 6H.2.--Principal Diagnosis Order Deletions to the CC
Exclusions List--FY 2024.
Table 6 I. --Complete MCC List--FY 2024.
Table 6I.1.--Additions to the MCC List--FY 2024.
Table 6I.2.-Deletions to the MCC List--FY 2024.
Table 6J.--Complete CC List--FY 2024.
Table 6J.1.--Additions to the CC List--FY 2024.
Table 6J.2.--Deletions to the CC List--FY 2024.
Table 6K.--Complete List of CC Exclusions--FY 2024.
14. 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 2023 IPPS/LTCH PPS final rule (87 FR 48874),
we made available the FY 2023 ICD-10 MCE Version 40 manual file. The
manual contains the definitions of the Medicare code edits, including a
description of each coding edit with the corresponding diagnosis and
procedure code edit lists. The link to this MCE manual file, along with
the link to the mainframe and computer software for the MCE Version 40
(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.
In the FY 2024 IPPS/LTCH PPS proposed rule (88 FR 26755), we
discussed an MCE request we received related to the Sex Conflict edit
by the October 20, 2022, deadline, as discussed further in this section
of the preamble of this final rule. Additionally, we discussed the
proposals we were making based on our internal review and analysis. In
this FY 2024 IPPS/LTCH PPS final rule, we present a summation of the
comments we received in response to the MCE proposals presented based
on internal review and analyses in the proposed rule, our responses to
those comments, and our finalized policies.
In addition, as a result of new and modified code updates approved
after the annual spring ICD-10 Coordination and Maintenance Committee
meeting, we routinely make changes to the MCE. In the past, in both the
IPPS proposed and final rules, we have only provided the list of
changes to the MCE that were brought to our attention after the prior
year's final rule. We historically have not listed the changes we have
made to the MCE as a result of the new and modified codes approved
after the annual spring ICD-10 Coordination and Maintenance Committee
meeting. These changes are approved too late in the rulemaking schedule
for inclusion in the proposed rule. Furthermore, although our MCE
policies have been described in our proposed and final rules, we have
not provided the detail of each new or modified diagnosis and procedure
code edit in the final rule. However, we make available the finalized
Definitions of Medicare Code Edits (MCE) file. Therefore, we are making
available the FY 2024 ICD-10 MCE Version 41 Manual file, along with the
link to the mainframe and computer software for the MCE Version 41 (and
ICD-10 MS-DRGs), on the CMS website at: https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/AcuteInpatientPPS/MS-DRG-Classifications-and-Software.
We also note that, as discussed in the CY 2024 Outpatient
Prospective Payment System and Ambulatory Surgical Center (OPPS/ASC)
proposed rule (CY 2024 OPPS/ASC proposed rule) (88 FR 49552, July 31,
2023), consistent with the process that is used for updates to the
``Integrated'' Outpatient Code Editor (I/OCE) and other Medicare claims
editing systems, we proposed to address any future revisions to the
IPPS MCE, including any additions or deletions of claims edits, as well
as the addition or deletion of ICD-10 diagnosis and procedure codes to
the applicable MCE edit code lists, outside of the annual IPPS
rulemakings. As discussed in the CY 2024 OPPS/ASC proposed rule, we
proposed to remove discussion of the IPPS MCE from the annual IPPS
rulemakings, beginning with the FY 2025 rulemaking, and to generally
address future changes or updates to the MCE through instruction to the
Medicare administrative contractors (MACs). We encourage readers to
review the discussion in the CY 2024 OPPS/ASC proposed rule and submit
comments in response to the proposal by the applicable deadline by
following
[[Page 58765]]
the instructions provided in that proposed rule.
a. External Causes of Morbidity Codes as Principal Diagnosis
In the MCE, the external cause codes (V, W, X, or Y codes) describe
the circumstance causing an injury, not the nature of the injury, and
therefore should not be used as a principal diagnosis.
As discussed in section II.C.13. of the preamble of the proposed
rule and this final rule, Table 6A.--New Diagnosis Codes, lists the
diagnosis codes that have been approved to date which will be effective
with discharges on and after October 1, 2023. We proposed to add the
ICD-10-CM diagnosis codes shown in Table 6P.9a associated with the
proposed rule and available on the CMS website at: https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/AcuteInpatientPPS to the edit
code list for the External causes of morbidity codes as principal
diagnosis edit.
Comment: Commenters agreed with CMS' proposal to add the diagnosis
codes listed in Table 6P.9a to the External causes of morbidity codes
as principal diagnosis edit code list.
Response: We appreciate the commenters' support.
After consideration of the public comments we received, we are
finalizing our proposal to add the diagnosis codes listed in Table
6P.9a associated with the proposed rule to the External causes of
morbidity codes as principal diagnosis edit code list under the ICD-10
MCE Version 41, effective October 1, 2023.
b. Age Conflict Edit
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 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 9-64 years inclusive (for example,
diabetes in pregnancy, antepartum pulmonary complication).
Adult--Age range is 15-124 years inclusive (for example,
senile delirium, mature cataract).
Comment: A commenter requested that we provide clarification
regarding the overlapping age ranges (0 to 17 years and 15 to 124
years) in the Pediatric and Adult categories under the Age Conflict
edit.
Response: As stated in the FY 2018 IPPS/LTCH PPS final rule (82 FR
38045), the age ranges defined within the Age Conflict edits were
established with the implementation of the IPPS. The adult age range
includes the minimum age of 15 years to account for those patients who
are declared emancipated minors.
(1) Perinatal/Newborn Diagnosis Category
Under the ICD-10 MCE, the Perinatal/Newborn diagnoses category for
the Age conflict edit considers the age range of 0 years only. For that
reason, the diagnosis codes on this Age conflict edit list would be
expected to apply to conditions or disorders which will only occur
during the perinatal or newborn period of age 0.
As discussed in section II.C.13. of the preamble of the proposed
rule and this final rule, Table 6A.--New Diagnosis Codes, lists the
diagnosis codes that have been approved to date which will be effective
with discharges on and after October 1, 2023. We proposed to add new
ICD-10-CM diagnosis codes Z05.81 (Observation and evaluation of newborn
for suspected condition related to home physiologic monitoring device
ruled out) and Z05.89 (Observation and evaluation of newborn for other
specified suspected condition ruled out) to the edit code list for the
Perinatal/Newborn diagnoses category under the Age conflict edit.
Comment: Commenters agreed with CMS' proposal to add diagnosis
codes Z05.81and Z05.89 to the edit code list for the Perinatal/Newborn
diagnoses category under the Age conflict edit.
Response: We appreciate the commenters' support.
After consideration of the public comments we received, we are
finalizing our proposal to add diagnosis codes Z05.81and Z05.89 to the
edit code list for the Perinatal/Newborn diagnoses category under the
Age conflict edit for the ICD-10 MCE Version 41, effective October 1,
2023.
In addition, as discussed in section II.C.13. of the preamble of
the proposed rule and this final rule, Table 6C.--Invalid Diagnosis
Codes, lists the diagnosis codes that are no longer effective October
1, 2023. Included in this table is ICD-10-CM diagnosis code Z05.8
(Observation and evaluation of newborn for other specified suspected
condition ruled out) that is currently listed on the edit code list for
the Perinatal/Newborn diagnoses category under the Age conflict edit.
We proposed to delete this code from the Perinatal/Newborn diagnoses
edit code list.
Comment: Commenters agreed with CMS' proposal to delete diagnosis
code Z05.8 from the edit code list for the Perinatal/Newborn diagnoses
category since it is no longer valid.
Response: We appreciate the commenters' support.
After consideration of the public comments we received, we are
finalizing our proposal to delete diagnosis code Z05.8 from the edit
code list for the Perinatal/Newborn diagnoses category under the Age
conflict edit for the ICD-10 MCE Version 41, effective October 1, 2023.
(2) Maternity Diagnoses
Under the ICD-10 MCE, the Maternity diagnoses category for the Age
conflict edit considers the age range of 9 to 64 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.
As discussed in section II.C.13. of the preamble of the proposed
rule, Table 6A.--New Diagnosis Codes, lists the diagnosis codes that
have been approved to date which will be effective with discharges on
and after October 1, 2023. We proposed to add new ICD-10-CM diagnosis
codes to the edit code list for the Maternity diagnoses category under
the Age conflict edit.
BILLING CODE 4120-01-P
[[Page 58766]]
[GRAPHIC] [TIFF OMITTED] TR28AU23.120
Comment: Commenters agreed with CMS' proposal to add the diagnosis
codes listed in the previous table to the Maternity diagnoses edit code
list.
Response: We appreciate the commenters' support.
After consideration of the public comments we received, we are
finalizing our proposal to add the diagnosis codes listed in the
previous table to the Maternity diagnoses edit code list under the Age
conflict edit for the ICD-10 MCE Version 41, effective October 1, 2023.
In addition, as discussed in section II.C.13. of the preamble of
the proposed rule and this final rule, Table 6C.--Invalid Diagnosis
Codes, lists the diagnosis codes that are no longer effective October
1, 2023. Included in this table is ICD-10-CM diagnosis code O90.4
(Postpartum acute kidney failure) that is currently listed on the edit
code list for the Maternity diagnoses category under the Age conflict
edit. We proposed to delete this code from the Maternity diagnoses edit
code list.
Comment: Commenters agreed with CMS' proposal to remove diagnosis
code O90.4 from the Maternity diagnoses edit code list since it is no
longer valid.
Response: We appreciate the commenters' support.
After consideration of the public comments we received, we are
finalizing our proposal to remove diagnosis code O90.4 from the
Maternity diagnoses edit code list under the Age conflict edit for the
ICD-10 MCE Version 41, effective October 1, 2023.
(3) Adult Diagnoses
Under the ICD-10 MCE, the Adult diagnoses category for the Age
conflict edit considers the age range of 15 to 124 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.
As discussed in section II.C.13. of the preamble of the proposed
rule and this final rule, Table 6A.--New Diagnosis Codes, lists the
diagnosis codes that have been approved to date which will be effective
with discharges on and after October 1, 2023. We proposed to add the
following new ICD-10-CM diagnosis codes to the edit code list for the
Adult diagnoses category under the Age conflict edit.
[[Page 58767]]
[GRAPHIC] [TIFF OMITTED] TR28AU23.112
Comment: Commenters agreed with CMS' proposal to add the diagnosis
codes listed in the previous table to the Adult diagnoses edit code
list.
Response: We appreciate the commenters' support.
After consideration of the public comments we received, we are
finalizing our proposal to add the diagnosis codes listed in the
previous table to the Adult diagnoses edit code list under the ICD-10
MCE Version 41, effective October 1, 2023.
c. Sex Conflict Edit
As discussed in the proposed rule, we received a request to
reconsider sex conflict edits in connection with concerns related to
claims processing for transgender individuals. The requestor raised
concerns that the current edit is not clinically accurate and is
inconsistent with equitable documentation of gender at the time of
service. The requestor expressed concerns that automated systems are
contributing to administrative burden for obstetrician-gynecologists
because the sex conflict edit requires physicians to choose the sex
assigned at birth only and that hospitals must include condition code
45 to override the edit for appropriate payment for certain
[[Page 58768]]
surgeries or procedures. The requestor described that claims are
inappropriately denied due to the edit singling out transgender
individuals, contributing to continued alienation of transgender
patients. The requestor further shared that obstetrician-gynecologists
have indicated that to provide high-quality, patient-centered care,
they need to be able to document a patient's gender identity along with
their sex.\18\ We note that the requestor raises a number of issues
that are related to multiple prospective payment systems and broader
aspects of health care, such as the electronic health record.
---------------------------------------------------------------------------
\18\ We note that the requester used the phrase ``gender
identity along with their sex''. We believe the requester was
referring to ``sex assigned at birth'' in this context.
---------------------------------------------------------------------------
We share the requestor's concern that the original design of the
sex conflict edits is descriptive of a patient's sex assigned at birth
as submitted on a claim, which may not be fully reflective of the
practice of medicine and patient-doctor interactions, as well as that
CMS policy and communications about the use of condition code 45 for
institutional claims has not been re-examined in some time. As we state
in the CMS Framework for Health Equity, 2022-2032,\19\ we strive to
identify and remedy systemic barriers to equity so that every one of
the people we serve has a fair and just opportunity to attain their
optimal health regardless of race, ethnicity, disability, sexual
orientation, gender identity, socioeconomic status, geography,
preferred language, or other factors that affect access to care and
health outcomes. CMS is committed to looking holistically at the
concerns raised by the commenter across settings of care and will
consider how to address for future rulemaking or guidance, and we thank
the commenter for continuing to share firsthand experiences.
---------------------------------------------------------------------------
\19\ https://www.cms.gov/files/document/cms-framework-health-equity-2022.pdf.
---------------------------------------------------------------------------
Comment: Commenters expressed their appreciation that CMS stated it
is committed to looking holistically at the concerns raised with
respect to the sex conflict edit and claims processing of transgender
individuals across settings of care. A commenter who expressed support
for the continued application of the sex conflict edit stated that
while the edit plays an important role in coding error detection and
condition code 45 is intended to ensure claims submission accuracy,
coding and MS-DRG assignment remain challenging as a result of the
edit.
Response: We appreciate the commenters' feedback. We also note that
following publication of the FY 2024 IPPS/LTCH PPS proposed rule, in
further consideration of the concerns expressed by the requestor and
recognizing that communication about the use of condition code 45 for
institutional claims had not been re-examined in some time, we issued
guidance via a Medicare Learning Network[supreg] (MLN Connects) article
on June 8, 2023 that is intended to provide clarification on the proper
billing and usage of condition code 45 and modifier KX. This guidance
also informed providers that effective July 1, 2023, the National
Uniform Billing Committee (NUBC) revised the terminology and definition
for Condition Code 45 to Gender Incongruence, defined as
``characterized by a marked and persistent incongruence between an
individual's experienced gender and sex at birth.'' We refer the reader
to the CMS website at: https://www.cms.gov/outreach-and-education/outreach/ffsprovpartprog/provider-partnership-email-archive/2023-06-08-mlnc for additional information regarding this guidance.
d. Manifestation Code as Principal Diagnosis Edit
In the ICD-10-CM classification system, manifestation codes
describe the manifestation of an underlying disease, not the disease
itself, and therefore should not be used as a principal diagnosis.
As discussed in section II.C.13. of the preamble of the proposed
rule and this final rule, Table 6A.--New Diagnosis Codes, lists the new
diagnosis codes that have been approved to date which will be effective
with discharges on and after October 1, 2023. Included in this table
are the following new ICD-10-CM diagnosis codes that we proposed to add
to the edit code list for the Manifestation code as principal diagnosis
edit, because the disease itself would be required to be reported
first.
[GRAPHIC] [TIFF OMITTED] TR28AU23.113
Comment: Commenters agreed with CMS' proposal to add the diagnosis
codes listed in the previous table to the Manifestation code as
principal diagnosis edit code list.
Response: We appreciate the commenters' support.
After consideration of the public comments we received, we are
finalizing our proposal to add the diagnosis codes listed in the
previous table to the Manifestation code as principal diagnosis edit
code list under the ICD-10 MCE Version 41, effective October 1, 2023.
In addition, as discussed in section II.C.13. of the preamble of
the proposed rule and this final rule, Table 6C.--Invalid Diagnosis
Codes, lists the diagnosis codes that are no longer effective October
1, 2023. Included in this table is ICD-10-CM diagnosis code H36
(Retinal disorders in diseases classified elsewhere) that is currently
listed on the edit code list for the Manifestation code as principal
diagnosis edit. We proposed to delete this code from the Manifestation
code as principal diagnosis edit code list.
Comment: Commenters agreed with CMS' proposal to remove diagnosis
code H36 from the Manifestation code as principal diagnosis edit code
list since it is no longer valid.
Response: We appreciate the commenters' support.
After consideration of the public comments we received, we are
finalizing our proposal to remove diagnosis code H36 from the
Manifestation code as principal diagnosis edit code list under the ICD-
10 MCE Version 41, effective October 1, 2023.
e. Unacceptable Principal Diagnosis Edit
In the MCE, there are select codes that describe a circumstance
which 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
[[Page 58769]]
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.
As discussed in section II.C.13. of the preamble of the proposed
rule and this final rule, Table 6A.--New Diagnosis Codes, lists the new
diagnosis codes that have been approved to date which will be effective
with discharges on and after October 1, 2023. We proposed to add the
following new ICD-10-CM diagnosis codes to the Unacceptable Principal
Diagnosis edit code list.
[[Page 58770]]
[GRAPHIC] [TIFF OMITTED] TR28AU23.114
Comment: Commenters agreed with our proposal to add the diagnosis
codes listed in the previous table to the Unacceptable Principal
Diagnosis edit code list.
[[Page 58771]]
Response: We appreciate the commenters' support.
After consideration of the public comments we received, we are
finalizing our proposal to add the diagnosis codes listed in the
previous table to the Unacceptable Principal Diagnosis edit code list
under the ICD-10 MCE Version 41, effective October 1, 2023.
In addition, as discussed in section II.C.13. of the preamble of
the proposed rule and this final rule, Table 6C.--Invalid Diagnosis
Codes, lists the diagnosis codes that are no longer effective October
1, 2023. Included in this table are the following ICD-10-CM diagnosis
codes that are currently listed on the Unacceptable Principal Diagnosis
edit code list. We proposed to delete these codes from the Unacceptable
Principal Diagnosis edit code list.
[GRAPHIC] [TIFF OMITTED] TR28AU23.115
Comment: Commenters agreed with CMS' proposal to remove the
diagnosis codes listed in the previous table from the Unacceptable
principal diagnosis edit code list since they are no longer valid.
Response: We appreciate the commenters' support.
After consideration of the public comments we received, we are
finalizing our proposal to remove the diagnosis codes listed in the
previous table from the Unacceptable Principal Diagnosis edit code list
under the ICD-10 MCE Version 41, effective October 1, 2023.
f. Unspecified Code
In the FY 2022 IPPS/LTCH PPS final rule (86 FR 44940 through
44943), we finalized the implementation of a new Unspecified code edit,
effective with discharges on and after April 1, 2022. Unspecified codes
exist in the ICD-10-CM classification for circumstances when
documentation in the medical record does not provide the level of
detail needed to support reporting a more specific code. However, in
the inpatient setting, there should generally be very limited and rare
circumstances for which the laterality (right, left, bilateral) of a
condition is unable to be documented and reported.
As discussed in section II.C.13. of the preamble of the proposed
rule and this final rule, Table 6A.--New Diagnosis Codes, lists the new
diagnosis codes that have been approved to date which will be effective
with discharges on and after October 1, 2023. We proposed to add the
following new ICD-10-CM diagnosis codes to the Unspecified code edit
list.
[[Page 58772]]
[GRAPHIC] [TIFF OMITTED] TR28AU23.116
Comment: Commenters agreed with our proposal to add the diagnosis
codes listed in the previous table to the Unspecified code edit code
list.
Response: We thank the commenters for their support. We also note
that we erroneously included the following diagnosis codes in our
proposal that are not designated as a CC or MCC, and are therefore
excluded from being subject to the Unspecified code edit. Specifically,
Table 6A. associated with the proposed rule and this final rule lists
the severity level designation for these six new diagnosis codes as
NonCC.
[GRAPHIC] [TIFF OMITTED] TR28AU23.117
[[Page 58773]]
After consideration of the public comments we received, we are
finalizing our proposal to add the following diagnosis codes that are
designated as CC to the Unspecified code edit code list under the ICD-
10 MCE Version 41, effective October 1, 2023.
[GRAPHIC] [TIFF OMITTED] TR28AU23.118
In addition, as stated in the proposed rule, we identified four
diagnosis codes that were inadvertently omitted from the Unspecified
code edit list effective with discharges on and after April 1, 2022. We
therefore proposed to also add the following ICD-10-CM diagnosis codes
to the Unspecified code edit list effective with discharges on and
after October 1, 2023.
[GRAPHIC] [TIFF OMITTED] TR28AU23.119
Comment: Commenters agreed with our proposal to add the diagnosis
codes listed in the previous table to the Unspecified code edit code
list.
Response: We thank the commenters for their support.
After consideration of the public comments we received, we are
finalizing our proposal to add the previously listed diagnosis codes
that are designated as MCC to the Unspecified code edit code list under
the ICD-10 MCE Version 41, effective October 1, 2023.
g. Future Enhancement
As discussed previously in this section of this final rule, we have
continued to evaluate the purpose and function of the MCE with respect
to ICD-10, and encouraged public input for future discussion. As we
have also discussed in prior rulemaking, we recognize a need to further
examine the current list of edits and the definitions of those edits.
We refer the reader to our discussion in the CY 2024 Outpatient
Prospective Payment System and Ambulatory Surgical Center (OPPS/ASC)
proposed rule (88 FR 49552, July 31, 2023), where we proposed to
address any future revisions to the IPPS MCE, including any additions
or deletions of claims edits, as well as the addition or deletion of
ICD-10 diagnosis and procedure codes to the applicable MCE edit code
lists, outside of the annual IPPS rulemakings.
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 new electronic intake system, Medicare Electronic Application
Request Information System (MEARISTM), discussed in section
II.C.1.b. of the preamble of the proposed rule and this final rule, at:
https://mearis.cms.gov/public/home by October 20, 2023.
15. 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.
[[Page 58774]]
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 final 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 proposed to make for FY 2024, as
discussed in section II.C. of the preamble of the proposed rule and
this final rule, we proposed to modify the existing surgical hierarchy
for FY 2024 as follows.
We proposed to revise the surgical hierarchy for the MDC 04
(Diseases and Disorders of the Respiratory System) MS-DRGs as follows:
In the MDC 04 MS-DRGs, we proposed to sequence proposed new MS-DRG 173
(Ultrasound Accelerated and Other Thrombolysis with Principal Diagnosis
Pulmonary Embolism) above MDC 04 MS-DRGs 166, 167, and 168 (Other
Respiratory System O.R. Procedures with MCC, with CC, and without CC/
MCC, respectively) and below MS-DRGs 163, 164, and 165 (Major Chest
Procedures with MCC, with CC, and without CC/MCC, respectively).
As discussed in section II.C.2.b. of the preamble of the proposed
rule and this final rule, we proposed to revise the surgical hierarchy
for the MDC 05 (Diseases and Disorders of the Circulatory System) MS-
DRGs as follows: In the MDC 05 MS-DRGs, we proposed to sequence
proposed new MS-DRG 212 (Concomitant Aortic and Mitral Valve
Procedures) above MS-DRGs 216, 217, 218, 219, 220, and 221 (Cardiac
Valve & Other Major Cardiothoracic Procedure with and without Cardiac
Catheterization, with MCC, with CC, without CC/MCC, respectively) and
below MS-DRG 215 (Other Heart Assist System Implant). As discussed in
section II.C.4. of the preamble of the proposed rule and this final
rule, we proposed to delete 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).
Based on the changes we proposed to make for those MS-DRGs in MDC 05,
we proposed to sequence proposed new MS-DRG 275 (Cardiac Defibrillator
Implant with Cardiac Catheterization and MCC) above proposed new MS-DRG
276 (Cardiac Defibrillator Implant with MCC) and below MS-DRGs 231,
232, 233, 234, 235, and 236 (Coronary Bypass with or without PTCA, with
or without Cardiac Catheterization or Open Ablation, with and without
MCC, respectively). We proposed to sequence proposed new MS-DRG 276
(Cardiac Defibrillator Implant with MCC) above proposed new MS-DRG 277
(Cardiac Defibrillator Implant without MCC) and below proposed new MS-
DRG 275 (Cardiac Defibrillator Implant with Cardiac Catheterization and
MCC). We proposed to sequence proposed new MS-DRG 277 (Cardiac
Defibrillator Implant without MCC) above MS-DRGs 266 and 267
(Endovascular Cardiac Valve Replacement and Supplement Procedures with
MCC and without MCC, respectively) and below proposed new MS-DRG 276
(Cardiac Defibrillator Implant with MCC).
As discussed in section II.C.4. of the preamble of the proposed
rule and this final rule, we proposed to delete MDC 05 MS-DRGs 246 and
247 (Percutaneous Cardiovascular Procedures with Drug-Eluting Stent
with MCC or 4+ Arteries or Stents and without MCC, respectively). We
also proposed to delete MDC 05 MS-DRGs 248 and 249 (Percutaneous
Cardiovascular Procedures with Non-Drug-Eluting Stent with MCC or 4+
Arteries or Stents and without MCC, respectively). We proposed to
revise the titles for MS-DRGs 250 and 251 from ``Percutaneous
Cardiovascular Procedures without Coronary Artery Stent with MCC and
without MCC, respectively'' to ``Percutaneous Cardiovascular Procedures
without Intraluminal Device with MCC and without MCC, respectively.''
Based on the changes we proposed to make for those MS-DRGs in MDC 05,
we proposed to sequence proposed new MS-DRGs 323 and 324 (Coronary
Intravascular Lithotripsy with Intraluminal Device with MCC and without
MCC, respectively) above proposed new MS-DRG 325 (Coronary
Intravascular Lithotripsy without Intraluminal Device) and below MS-
DRGs 273 and 274 (Percutaneous and Other Intracardiac Procedures with
MCC and without MCC, respectively). We proposed to sequence proposed
new MS-DRG 325 (Coronary Intravascular Lithotripsy without Intraluminal
Device) above proposed new MS-DRGs 321 and 322 (Percutaneous
Cardiovascular Procedures with Intraluminal Device, with MCC or 4+
Arteries/Intraluminal Devices and
[[Page 58775]]
without MCC, respectively) and below proposed new MS-DRGs 323 and 324
(Coronary Intravascular Lithotripsy with Intraluminal Device with MCC
and without MCC, respectively). We proposed to sequence proposed new
MS-DRGs 321 and 322 (Percutaneous Cardiovascular Procedures with
Intraluminal Device with MCC or 4+ Arteries/Intraluminal Devices and
without MCC, respectively), above MS-DRGs 250 and 251 (Percutaneous
Cardiovascular Procedures without Intraluminal Device with MCC and
without MCC, respectively) and below proposed new MS-DRG 325 (Coronary
Intravascular Lithotripsy without Intraluminal Device).
In addition, based on the changes that we proposed to make as
discussed in section II.C.8.a. of the preamble of the proposed rule and
this final rule, we also proposed to sequence proposed new MDC 05 MS-
DRGs 278 and 279 (Ultrasound Accelerated and Other Thrombolysis of
Peripheral Vascular Structures with MCC and without MCC, respectively)
above MDC 05 MS-DRGs 252, 253, and 254 (Other Vascular Procedures with
MCC, with CC, and without CC/MCC, respectively) and below MS-DRGs 250
and 251 (Percutaneous Cardiovascular Procedures without Intraluminal
Device with and without MCC, respectively).
As discussed in section II.C.4. of the preamble of the proposed
rule and this final rule, we proposed to delete MS-DRGs 338, 339, and
340 (Appendectomy with Complicated Principal Diagnosis with MCC, with
CC, and without CC/MCC, respectively) and MS-DRGs 341, 342, and 343
(Appendectomy without Complicated Principal Diagnosis with MCC, with
CC, and without CC/MCC, respectively). Based on the changes we proposed
to make for those MS-DRGs in MDC 06 (Diseases and Disorders of the
Digestive System), we proposed to revise the surgical hierarchy for MDC
06 as follows: In MDC 06, we proposed to sequence proposed new MS-DRGs
397, 398, and 399 (Appendix Procedures with MCC, with CC, and without
CC/MCC, respectively) above MS-DRGs 344, 345, and 346 (Minor Small and
Large Bowel Procedures with MCC, with CC, and without CC/MCC,
respectively) and below MS-DRGs 335, 336, and 337 (Peritoneal
Adhesiolysis with MCC, with CC, and without CC/MCC, respectively).
Lastly, as discussed in section II.C.2.b. of the preamble of the
proposed rule and this final rule, we proposed to revise the title for
MDC 16 (Diseases and Disorders of Blood, Blood Forming Organs and
Immunologic Disorders) MS-DRGs 799, 800, and 801 from ``Splenectomy
with MCC, with CC, and without CC/MCC, respectively'' to ``Splenic
Procedures with MCC, with CC, and without CC/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 41 is
illustrated in the following tables.
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[[Page 58776]]
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[GRAPHIC] [TIFF OMITTED] TR28AU23.125
Comment: Commenters supported the proposed additions, deletions,
and sequencing for the surgical hierarchy under MDCs 04, 05, 06, and
16. In response to the changes we proposed to make for MS-DRGs in MDC
05, a commenter stated this hierarchy is the most logical order given
the clinical complexity associated with cases
[[Page 58777]]
requiring coronary intravascular lithotripsy followed by the MS-DRGs
for percutaneous cardiovascular procedures with or without intraluminal
device.
We received a few public comments recommending that CMS consider an
alternate option for the surgical hierarchy in MDC 05. Specifically,
these commenters requested CMS consider switching--
MS-DRGs 270, 271, and 272 and MS-DRG 319 and 320 in the
surgical hierarchy so that MS-DRGs 270, 271, and 272 are sequenced
before MS-DRGs 319 and 320;
MS-DRG 245 with MS-DRGs 266 and 267 so that MS-DRG 245 is
sequenced before MS-DRGs 266 and 267; and
MS-DRGs 323, 324, and 325 to be sequenced after MS-DRGs
319 and 320 after these MS-DRGs are sequenced after MS-DRGs 270, 271,
and 272 as shown in the following table.
[GRAPHIC] [TIFF OMITTED] TR28AU23.126
A commenter displayed the proposed relative weights of MS-DRGs 245,
MS-DRGs 266-267, MS-DRGs 270-272, MS-DRGs 319-320, proposed new MS-DRGs
323-324 and proposed new MS-DRG 325 from Table 5.--List of Medicare
Severity Diagnosis-Related Groups (MS-DRGs), Relative Weighting
Factors, and Geometric and Arithmetic Mean Length of Stay--FY 2024,
associated with the proposed rule, in listing this alternative option.
However, these commenters did not provide any rationale for their
alternate recommendations.
Response: We appreciate the commenters' support of our proposal. We
also thank the commenters for their feedback. In response to the
commenters that provided an alternate recommendation for the surgical
hierarchy for MDC 05, we reviewed the suggestions from the commenters.
In the absence of additional information to support the suggested
modifications to our proposal, we continue to believe our proposed
revisions to the surgical hierarchy account for the resources expended
to address these complex procedures and do not believe any
modifications are warranted at this time. We believe sequencing as
discussed in the proposed rule more appropriately reflects resource
utilization when the assigned cardiac procedures are performed and will
result in the most suitable MS-DRG assignments. We will continue to
review the surgical hierarchy, consistent with our annual rulemaking,
to determine if other modifications are warranted in the future.
Therefore, after consideration of the public comments we received,
and based on the changes that we are finalizing for FY 2024, as
discussed in section II.C. of the preamble of the proposed rule and
this final rule, we are finalizing our proposals to modify the existing
surgical hierarchy, effective with the ICD-10 MS-DRGs Version 41,
without modification.
For issues pertaining to the surgical hierarchy, as with other MS-
DRG related requests, we encourage interested parties to submit
comments no later than October 20, 2023 via the new electronic intake
system, Medicare Electronic Application Request Information
SystemTM (MEARISTM) at https://mearis.cms.gov/public/home so that they can be considered for possible inclusion in
the annual proposed rule. We will consider these public comments for
possible proposals in future rulemaking as part of our annual review
process.
16. 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 Centers for Disease Control and Prevention's (CDC)
National Center for Health Statistics (NCHS) 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: https://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: https://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 ICD-10 Coordination and Maintenance Committee holds its
meetings in the spring and fall to update the codes and the applicable
payment and reporting systems by October 1 or April 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.
The Committee encourages participation in the previously mentioned
process by health-related organizations and other interested parties.
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
[[Page 58778]]
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 during the public meetings and in writing, the Committee
formulates recommendations, which then must be approved by the
agencies. 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.
The Committee presented proposals for coding changes for
implementation in FY 2024 at a public meeting held on September 13-14,
2022, and finalized the coding changes after consideration of comments
received at the meetings and in writing by November 14, 2022.
The Committee held its 2023 meeting on March 7-8, 2023. The
deadline for submitting comments on these code proposals was April 7,
2023. 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 June 2023
would be included in the October 1, 2023, update to the ICD-10-CM
diagnosis and ICD-10-PCS procedure code sets.
As discussed in earlier sections of the preamble of this final
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 final rule, which are available on the CMS website at: https://
www.cms.gov/medicare/medicare-fee-for-service-payment/
acuteinpatientpps. The code titles are adopted as part of the ICD-10
Coordination and Maintenance Committee process. Therefore, although we
make the code titles available in these tables for the IPPS proposed
and final rules, they are not subject to comment in the proposed or
final rule. Because of the length of these tables, they are not
published in the Addendum to the proposed or final rule. Rather, they
are available via the CMS website as discussed in section VI. of the
Addendum to the proposed rule and this final rule.
Recordings for the virtual meeting discussions of the procedure
codes at the Committee's September 13-14, 2022, meeting and the March
7-8, 2023, meeting can be obtained from the CMS website at: https://www.cms.gov/Medicare/Coding/ICD10/C-and-M-Meeting-Materials. The
materials for the discussions relating to diagnosis codes at the
September 13-14, 2022, meeting and March 7-8, 2023, 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, participating in a
Committee meeting, timeline requirements and meeting dates.
We encourage commenters to submit questions and comments on coding
issues involving diagnosis codes via Email to: cdc.gov">nchsicd10cm@cdc.gov.
Questions and comments concerning the procedure codes should be
submitted via Email to: [email protected].
We stated in the proposed rule that in an effort to better enable
the collection of health-related social needs (HRSNs), defined as
individual-level, adverse social conditions that negatively impact a
person's health or healthcare, are significant risk factors associated
with worse health outcomes as well as increased healthcare utilization,
the Centers for Disease Control and Prevention's (CDC) National Center
for Health Statistics (NCHS) implemented 42 new diagnosis codes into
the ICD-10-CM classification, for reporting effective April 1, 2023.
The diagnosis codes are as follows:
[[Page 58779]]
[GRAPHIC] [TIFF OMITTED] TR28AU23.127
We refer the reader to the CDC web page at https://www.cdc.gov/nchs/icd/Comprehensive-Listing-of-ICD-10-CM-Files.htm for additional
details regarding the implementation of these new diagnosis codes.
As discussed in the proposed rule, we provided the MS-DRG
assignments for the 42 diagnosis codes effective with
[[Page 58780]]
discharges on and after April 1, 2023, consistent with our established
process for assigning new diagnosis codes. Specifically, we review the
predecessor diagnosis code and MS-DRG assignment most closely
associated with the new diagnosis code and consider other factors that
may be relevant to the MS-DRG assignment, including the severity of
illness, treatment difficulty, and the resources utilized for the
specific condition/diagnosis. We note that this process does not
automatically result in the new diagnosis code being assigned to the
same MS-DRG as the predecessor code. The assignments for the previously
listed diagnosis codes are reflected in Table 6A.--New Diagnosis Codes
associated with the proposed rule and available on the CMS website at
https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/AcuteInpatientPPS. As with the other new diagnosis codes and MS-DRG
assignments included in Table 6A in association with the proposed rule,
we solicited public comments on the most appropriate MDC, MS-DRG, and
severity level assignments for these codes for FY 2024, as well as any
other options for the GROUPER logic.
We did not receive any comments opposing the MDC, MS-DRG, and
severity level assignments for the listed codes and are therefore,
finalizing, without modification, the assignments as reflected in Table
6A.--New Diagnosis Codes in association with this final rule.
In addition, we noted in the proposed rule that CMS implemented 34
new procedure codes including laser interstitial thermal therapy (LITT)
of various vertebral body sites, bone marrow transfusions, and the
introduction or infusion of therapeutics, into the ICD-10-PCS
classification effective with discharges on and after April 1, 2023.
The procedure codes are as follows:
[[Page 58781]]
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[[Page 58782]]
[GRAPHIC] [TIFF OMITTED] TR28AU23.129
The 34 procedure codes are also reflected in Table 6B--New
Procedure Codes in association with the proposed rule and available on
the CMS website at: https://www.cms.gov/Medicare/Medicare-Fee-for-
Service-Payment/
[[Page 58783]]
AcuteInpatientPPS. As with the other new procedure codes and MS-DRG
assignments included in Table 6B in association with the proposed rule,
we solicited public comments on the most appropriate MDC, MS-DRG, and
operating room status assignments for these codes for FY 2024, as well
as any other options for the GROUPER logic.
We did not receive any comments opposing the MDC, MS-DRG, and
operating room status assignments for the listed codes and are
therefore, finalizing, without modification, the assignments as
reflected in Table 6B.--New Procedure Codes in association with this
final rule.
In the proposed rule, we also noted that Change Request (CR) 13034,
Transmittal 11746, titled ``April 2023 Update to the Medicare
Severity--Diagnosis Related Group (MS-DRG) Grouper and Medicare Code
Editor (MCE) Version 40.1 for the International Classification of
Diseases, Tenth Revision (ICD-10) Diagnosis Codes for Collection of
Health-Related Social Needs (HRSNs) and New ICD-10 Procedure Coding
System (PCS) Codes'', was issued on December 15, 2022 (available on the
CMS website at: https://www.cms.gov/Regulations-and-Guidance/Guidance/Transmittals/Transmittals/r11746cp), regarding the release of an
updated version of the ICD-10 MS-DRG GROUPER and Medicare Code Editor
software, Version 40.1, effective with discharges on and after April 1,
2023, reflecting the new diagnosis and procedure codes. The updated
software, along with the updated ICD-10 MS-DRG V40.1 Definitions Manual
and the Definitions of Medicare Code Edits V40.1 manual is available
at: https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/AcuteInpatientPPS/MS-DRG-Classifications-and-Software.
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) of Public Law 108-173 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 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.
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
were considered for an April 1 update if a strong and convincing case
was made by the requestor during the Committee's public meeting. The
request needed to identify the reason why a new code was needed in
April for purposes of the new technology process. Meeting participants
and those reviewing the Committee meeting materials were provided the
opportunity to comment on the expedited request. We refer the reader to
the FY 2022 IPPS/LTCH PPS final rule (86 FR 44950) for further
discussion of the implementation of this prior April 1 update for
purposes of the new technology add-on payment process.
However, as discussed in the FY 2022 IPPS/LTCH PPS final rule (86
FR 44950 through 44956), we adopted an April 1 implementation date, in
addition to the annual October 1 update, beginning with April 1, 2022.
We noted that the intent of this April 1 implementation date is to
allow flexibility in the ICD-10 code update process. With this new
April 1 update, CMS now uses the same process for consideration of all
requests for an April 1 implementation date, including for purposes of
the new technology add-on payment process (that is, the prior process
for consideration of an April 1 implementation date only if a strong
and convincing case was made by the requestor during the meeting no
longer applies). We are continuing to use several aspects of our
existing established process to implement new codes through the April 1
code update, which includes presenting proposals for April 1
consideration at the September ICD-10 Coordination and Maintenance
Committee meeting, requesting public comments, reviewing the public
comments, finalizing codes, and announcing the new codes with their
assignments consistent with the new GROUPER release information. We
note that under our established process, requestors indicate whether
they are submitting their code request for consideration for an April 1
implementation date or an October 1 implementation date. The ICD-10
Coordination and Maintenance Committee makes efforts to accommodate the
requested implementation date for each request submitted. However, the
Committee determines which requests are to be presented for
consideration for an April 1 implementation date or an October 1
implementation date. As discussed earlier in this section of the
preamble of this final rule, there were code proposals presented for an
April 1, 2023, implementation at the September 13-14, 2022, Committee
meetings. Following the receipt of public comments, the code proposals
were approved and finalized, therefore, there were new codes
implemented April 1, 2023.
As discussed in the FY 2024 IPPS/LTCH PPS proposed rule, consistent
with the process we outlined for the April 1 implementation date, we
announced the new codes in November 2022 and provided the updated code
files and ICD-10-CM Official Guidelines for Coding and Reporting in
January 2023. On January 30, 2023, the Federal Register (88 FR 5882)
notice for the March 7-8, 2023 ICD-10 Coordination and Maintenance
Committee Meeting was published that includes the tentative agenda and
identifies which topics are related to a new technology add-on payment
application. By February 1, 2023, we made available the updated V40.1
ICD-10 MS-DRG Grouper software and related materials on the CMS web
page at: https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/AcuteInpatientPPS/MS-DRG-Classifications-and-Software.
ICD-9-CM addendum and code title information is published on the
CMS website at https://www.cms.gov/Medicare/Coding/ICD9ProviderDiagnosticCodes/addendum. ICD-10-CM and ICD-10-PCS addendum
and code title information is published on the CMS website at https://
www.cms.gov/Medicare/Coding/ICD10. CMS also sends electronic files
[[Page 58784]]
containing 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 be found on the CDC website
at https://www.cdc.gov/nchs/icd/Comprehensive-Listing-of-ICD-10-CM-Files.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. The AHA also
distributes coding update information to publishers and software
vendors.
In the proposed rule, we noted that for FY 2023, there are
currently 73,674 diagnosis codes and 78,530 procedure codes. We also
noted that as displayed in Table 6A.--New Diagnosis Codes and in Table
6B.--New Procedure Codes associated with the proposed rule (and
available on the CMS website at https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/AcuteInpatientPPS), there are 395 new diagnosis
codes and 10 new procedure codes that had been finalized for FY 2024 at
the time of the development of the proposed rule. As discussed in
section II.C.13 of the preamble of this final rule, we are making 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 available on the CMS website at: https://www.cms.gov/
medicare/medicare-fee-for-service-payment/acuteinpatientpps in
association with this final rule. As shown in Table 6B.--New Procedure
Codes, there were procedure codes discussed at the March 7-8, 2023 ICD-
10 Coordination and Maintenance Committee meeting that were not
finalized in time to include in the proposed rule and are identified
with an asterisk. We refer the reader to Table 6B.--New Procedure Codes
associated with this final rule and available on the CMS website at:
https://www.cms.gov/medicare/medicare-fee-for-service-payment/
acuteinpatientpps for the detailed list of these additional 68 new
procedure codes. The addition of these 68 new procedure codes to the 10
procedure codes that had been finalized at the time of the development
of the proposed rule results in a total of 78 (10 + 68 = 78) new
procedure codes for FY 2024.
We also note, as reflected in Table 6C.--Invalid Diagnosis Codes
and in Table 6D.--Invalid Procedure Codes, there are a total of 25
diagnosis codes and 5 procedure codes that will become invalid
effective October 1, 2023. Based on these code updates, effective
October 1, 2023, there are a total of 74,044 ICD-10-CM diagnosis codes
and 78,603 ICD-10-PCS procedure codes for FY 2024 as shown in the
following table.
[GRAPHIC] [TIFF OMITTED] TR28AU23.130
As stated 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. The code
titles are adopted as part of the ICD-10 Coordination and Maintenance
Committee process. Thus, 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.
17. 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. Changes for FY 2024
As discussed in section II.C.5. of the preamble of the proposed
rule and this final rule, for FY 2024, we proposed to delete MS-DRGs
222, 223, 224, 225, 226, and 227, add new MS-DRG 275 (Cardiac
Defibrillator Implant with Cardiac Catheterization and MCC) and new MS-
DRGs 276 and 277 (Cardiac Defibrillator Implant with MCC, and without
MCC, respectively), and to reassign a subset of the procedures
currently assigned to MS-DRGs 222 through 227 to proposed new MS-DRGs
275, 276, and 277.
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 222 through 227 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 following table. A subset
of the procedures currently assigned to MS-DRGs 222 through 227 was
proposed for assignment to proposed new MS-DRGs 275, 276, and 277.
Therefore, we proposed that if the applicable proposed MS-DRG changes
are finalized, we also would add proposed new MS-DRGs 275, 276, and 277
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 delete MS-DRGs 222 through 227 from the list of
MS-DRGs subject to the policy. We also proposed to continue to include
the existing MS-DRGs currently subject to the policy.
As discussed in section II.C.5. of the preamble of this final rule,
we are finalizing our proposal to delete MS-DRGs 222, 223, 224, 225,
226, and 227. Additionally, we are finalizing our proposal to create
new MS-DRG 275 (Cardiac Defibrillator Implant with Cardiac
Catheterization and MCC) and new MS-DRGs 276 and 277 (Cardiac
Defibrillator Implant with MCC, and without MCC, respectively), and to
reassign a subset of the procedures currently assigned to MS-DRGs 222
[[Page 58785]]
through 227 to proposed new MS-DRGs 275, 276, and 277. We did not
receive any public comments opposing our proposal to delete MS-DRGs
222, 223, 224, 225, 226, and 227 from the list of MS-DRGs that will be
subject to the replaced devices offered without cost or with a credit
policy effective October 1, 2023. Additionally, we did not receive any
public comments opposing our proposal to add MS-DRGs 275, 276, and 277
to the list of MS-DRGs that will be subject to the policy for replaced
devices offered without cost or with credit or to continue to include
the existing MS-DRGs currently subject to the policy. Therefore, we are
finalizing the list of MS-DRGs in the following table that will be
subject to the replaced devices offered without cost or with a credit
policy effective October 1, 2023.
[GRAPHIC] [TIFF OMITTED] TR28AU23.131
[[Page 58786]]
[GRAPHIC] [TIFF OMITTED] TR28AU23.132
BILLING CODE 4120-01-C
The final list of MS-DRGs subject to the IPPS policy for replaced
devices offered without cost or with a credit will be issued to
providers in the form of a Change Request (CR).
18. Out of Scope Public Comments Received
We received public comments on MS-DRG related issues that were
outside the scope of the proposals included in the FY 2024 IPPS/LTCH
PPS proposed rule.
Because we consider these public comments to be outside the scope
of the proposed rule, we are not addressing them in this final rule. As
stated in
[[Page 58787]]
section II.D.1.b. of the preamble of this final rule, we encourage
individuals with comments about MS-DRG classifications to submit these
comments no later than October 20, 2023, via the new electronic intake
system, Medicare Electronic Application Request Information
SystemTM (MEARISTM) at: https://mearis.cms.gov/public/home, so that they can be considered for possible inclusion in
the annual proposed rule. We will consider these public comments for
possible proposals in future rulemaking as part of our annual review
process.
D. Recalibration of the FY 2024 MS-DRG Relative Weights
1. Data Sources for Developing the Relative Weights
Consistent with our established policy, in developing the MS-DRG
relative weights for FY 2024, we proposed to use two data sources:
claims data and cost report data. The claims data source is the MedPAR
file, which includes fully coded diagnostic and procedure data for all
Medicare inpatient hospital bills. The FY 2022 MedPAR data used in this
final rule include discharges occurring on October 1, 2021, through
September 30, 2022, based on bills received by CMS through March 31,
2023, 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 2022 MedPAR file used in calculating the relative weights
includes data for approximately 6,991,373 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 2022 update of
the FY 2022 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
relative weights for FY 2024 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 FY 2024 relative weights are based on the ICD-
10-CM diagnosis codes and ICD-10-PCS procedure codes from the FY 2022
MedPAR claims data, grouped through the ICD-10 version of the FY 2024
GROUPER (Version 41).
The second data source used in the cost-based relative weighting
methodology is the Medicare cost report data files from the HCRIS. In
general, we use the HCRIS dataset that is 3 years prior to the IPPS
fiscal year. Specifically, for this final rule, we used the March 2023
update of the FY 2021 HCRIS for calculating the FY 2024 cost-based
relative weights. Consistent with our historical practice, for this FY
2024 final rule, we are providing the version of the HCRIS from which
we calculated these 19 CCRs on the CMS website at https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/AcuteInpatientPPS. Click on
the link on the left side of the screen titled ``FY 2024 IPPS Proposed
Rule Home Page'' or ``Acute Inpatient Files for Download.''
2. Methodology for Calculation of the Relative Weights
a. General
We calculated the FY 2024 relative weights based on 19 CCRs. The
methodology we proposed to use to calculate the FY 2024 MS-DRG cost-
based relative weights based on claims data in the FY 2022 MedPAR file
and data from the FY 2021 Medicare cost reports is as follows:
To the extent possible, all the claims were regrouped
using the FY 2024 MS-DRG classifications discussed in sections II.B.
and II.C. of the preamble of this final rule.
The transplant cases that were used to establish the
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 2022 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.
Section 108 of the Further Consolidated Appropriations Act, 2020
provides that, for cost reporting periods beginning on or after October
1, 2020, costs related to hematopoietic stem cell acquisition for the
purpose of an allogeneic hematopoietic stem cell transplant shall be
paid on a reasonable cost basis. We refer the reader to the FY 2021
IPPS/LTCH PPS final rule for further discussion of the reasonable cost
basis payment for cost reporting periods beginning on or after October
1, 2020 (85 FR 58835 through 58842). For FY 2022 and subsequent years,
we subtract the hematopoietic stem cell acquisition charges from the
total charges on each transplant bill that showed hematopoietic stem
cell 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, computed tomography (CT) scan charges, and
magnetic resonance imaging (MRI) charges were also deleted.
At least 92.6 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
[[Page 58788]]
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 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 https://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 BPCI Advanced
model started on October 1, 2018. The BPCI Advanced model, tested under
the authority of 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 2023, and consistent with how we have treated hospitals
that participated in the BPCI Initiative, for FY 2024, 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 previously, these hospitals are still receiving IPPS payments
under section 1886(d) of the Act. Consistent with the FY 2023 IPPS/LTCH
PPS final rule, we also proposed to include all applicable data from
subsection (d) hospitals participating in the Comprehensive Care for
Joint Replacement (CJR) Model in our IPPS payment modeling and
ratesetting calculations.
The charges for each of the 19 cost groups for each claim were
standardized to remove the effects of differences in area wage levels,
IME, and DSH payments, and for hospitals located in Alaska and Hawaii,
the applicable 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 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 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 2021 cost report data.
The 19 cost centers that we used in the relative weight calculation
are shown in a supplemental data file, Cost Center HCRIS Lines
Supplemental Data File, posted via the internet on the CMS website for
this final rule and available at https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/AcuteInpatientPPS. The supplemental data file
shows the lines on the cost report and the corresponding revenue codes
that we used to create the 19 national cost center CCRs. We stated in
the proposed rule that if we receive comments about the groupings in
this supplemental data file, we may consider these comments as we
finalize our policy. However, we did not receive any comments on the
groupings in this table, and therefore, we are finalizing the groupings
as proposed.
Consistent with historical practice, we account for rare situations
of non-monotonicity in a base MS-DRG and its severity levels, where the
mean cost in the higher severity level is less than the
[[Page 58789]]
mean cost in the lower severity level, in determining the relative
weights for the different severity levels. If there are initially non-
monotonic relative weights in the same base DRG and its severity
levels, then we combine the cases that group to the specific non-
monotonic MS-DRGs for purposes of relative weight calculations. For
example, if there are two non-monotonic MS-DRGs, combining the cases
across those two MS-DRGs results in the same relative weight for both
MS-DRGs. The relative weight calculated using the combined cases for
those severity levels is monotonic, effectively removing any non-
monotonicity with the base DRG and its severity levels. For the FY 2024
proposed rule, this calculation was applied to address non-monotonicity
for cases that grouped to MS-DRG 016 and MS-DRG 017. In the
supplemental file titled AOR/BOR File associated with the proposed
rule, we included statistics for the affected MS-DRGs both separately
and with cases combined.
We invited public comments on our proposals related to
recalibration of the proposed FY 2024 relative weights and the changes
in relative weights from FY 2023.
Comment: A commenter stated that CMS erred in calculating the
relative weights for MS-DRG 016 and MS-DRG 017. The commenter stated
that if the relative weight is going to be kept the same, the MS-DRGs
should be combined, as they are for allogenic bone marrow transplants.
Response: As discussed in the proposed rule, we intentionally
combined the cases across the two MS-DRGs because the mean cost in the
higher severity level is less than the mean cost in the lower severity
level, consistent with our historical practice for accounting for
situations of non-monotonicity in a base MS-DRG and its severity
levels. We may consider the suggestion to combine these two MS-DRGs for
future rulemaking.
Accordingly, for this FY 2024 final rule, this calculation was
applied to address non-monotonicity for cases that grouped to MS-DRG
016 and MS-DRG 017. In the supplemental file titled AOR/BOR File
associated with this final rule, we include statistics for the affected
MS-DRGs both separately and with cases combined.
Comment: A commenter requested that CMS implement an edit for
claims that group to MS-DRG 014, that would reject claims when an
inpatient type of bill 11X claim is received without charges mapped to
revenue code 0815. The commenter stated that this edit would help
ensure accurate claims reporting, ensure the accuracy of CMS' budget
neutrality calculations, and help ensure that CMS does not
inappropriately generate outlier payment on MS-DRG 014 claims (given
that CMS removes costs associated with revenue code 0815 from its
outlier calculation).
Response: We expect providers to appropriately report charges
associated with revenue code 0815 and do not believe that a novel
claims processing edit such as this is necessary at this time. We may
consider provider education materials regarding reporting Allogeneic
Stem Cell Acquisition/Donor Services in the future.
After consideration of the comments received, we are finalizing our
proposals related to the recalibration of the FY 2024 relative weights.
We summarize and respond to comments relating to the methodology for
calculating the relative weight for MS-DRG 018 in the next section of
this final rule.
b. Relative Weight Calculation for MS-DRG 018
In the FY 2021 IPPS/LTCH PPS final rule (85 FR 58451 through
58453), we created MS-DRG 018 for cases that include procedures
describing Chimeric Antigen Receptor (CAR) T-cell therapies. We also
finalized our proposal to modify our existing relative weight
methodology to ensure that the relative weight for MS-DRG 018
appropriately reflects the relative resources required for providing
CAR T-cell therapy outside of a clinical trial, while still accounting
for the clinical trial cases in the overall average cost for all MS-
DRGs (85 FR 58599 through 58600). Specifically, we stated that clinical
trial claims that group to new MS-DRG 018 will not be included when
calculating the average cost for MS-DRG 018 that is used to calculate
the relative weight for this MS-DRG, so that the relative weight
reflects the costs of the CAR T-cell therapy drug. We stated that we
identified clinical trial claims as claims that contain ICD-10-CM
diagnosis code Z00.6 or contain standardized drug charges of less than
$373,000, which was the average sales price of KYMRIAH and YESCARTA,
the two CAR T-cell biological products licensed to treat relapsed/
refractory large B-cell lymphoma as of the time of the development of
the FY 2021 final rule. In addition, we stated that: (a) when the CAR
T-cell therapy product is purchased in the usual manner, but the case
involves a clinical trial of a different product, the claim will be
included when calculating the average cost for new MS-DRG 018 to the
extent such cases can be identified in the historical data, and (b)
when there is expanded access use of immunotherapy, these cases will
not be included when calculating the average cost for new MS-DRG 018 to
the extent such cases can be identified in the historical data.
We also finalized our proposal to calculate an adjustment to
account for the CAR T-cell therapy cases identified as clinical trial
cases in calculating the national average standardized cost per case
that is used to calculate the relative weights for all MS-DRGs and for
purposes of budget neutrality and outlier simulations. We calculate
this adjustor by dividing the average cost for cases that we identify
as clinical trial cases by the average cost for cases that we identify
as non-clinical trial cases, with the additional refinements that (a)
when the CAR T-cell therapy product is purchased in the usual manner,
but the case involves a clinical trial of a different product, the
claim will be included when calculating the average cost for cases not
determined to be clinical trial cases to the extent such cases can be
identified in the historical data, and (b) when there is expanded
access use of immunotherapy, these cases will be included when
calculating the average cost for cases determined to be clinical trial
cases to the extent such cases can be identified in the historical
data. We stated that to the best of our knowledge, there were no claims
in the historical data used in the calculation of this adjustment for
cases involving a clinical trial of a different product, and to the
extent the historical data contain claims for cases involving expanded
access use of immunotherapy we believe those claims would have drug
charges less than $373,000.
In the FY 2021 IPPS/LTCH PPS final rule (85 FR 58842), we also
finalized an adjustment to the payment amount for applicable clinical
trial and expanded access use immunotherapy cases that group to MS-DRG
018, and indicated that we would provide instructions for identifying
these claims in separate guidance. Following the issuance of the FY
2021 IPPS/LTCH PPS final rule, we issued guidance \20\ stating that
providers may enter a Billing Note NTE02 ``Expand Acc Use'' on the
electronic claim 837I or a remark ``Expand Acc Use'' on a paper claim
to notify the Medicare administrative contractor (MAC) of expanded
access use of CAR T-cell therapy. In this case, the MAC would add
payer-only condition code ``ZB'' so that Pricer will apply the payment
adjustment in calculating payment for the case. In cases when the CAR
T-cell therapy product is
[[Page 58790]]
purchased in the usual manner, but the case involves a clinical trial
of a different product, the provider may enter a Billing Note NTE02
``Diff Prod Clin Trial'' on the electronic claim 837I or a remark
``Diff Prod Clin Trial'' on a paper claim. In this case, the MAC would
add payer-only condition code ``ZC'' so that the Pricer will not apply
the payment adjustment in calculating payment for the case.
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\20\ https://www.cms.gov/files/document/r10571cp.pdf.
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In the FY 2022 IPPS/LTCH PPS final rule, we revised MS-DRG 018 to
include cases that report the procedure codes for CAR T-cell and non-
CAR T-cell therapies and other immunotherapies (86 FR 44798 through
44806). We also finalized our proposal to continue to use the proxy of
standardized drug charges of less than $373,000 (86 FR 44965) to
identify clinical trial claims.
In the FY 2023 IPPS/LTCH PPS final rule (87 FR 48894), we once
again finalized our policy to use a proxy of standardized drug charges
of less than $373,000. We also stated that we will continue to monitor
the data with respect to the clinical trial threshold. As in prior
years, we stated that we continue to believe to the best of our
knowledge there were no claims in the historical data (FY 2021 MedPAR)
used in the calculation of the adjustment for cases involving a
clinical trial of a different product, and to the extent the historical
data contain claims for cases involving expanded access use of
immunotherapy we believe those claims would have drug charges less than
$373,000. We also stated, in response to comments, that we agreed that
the availability of condition code 90 obviates the need for the use of
the remarks field to identify expanded access claims that group to MS-
DRG 018 for the purposes of applying the clinical trial adjustment. We
stated that effective October 1, 2022, providers should submit
condition code 90 to identify expanded access claims that group to MS-
DRG 018, rather than the remarks field, and that the MACs will no
longer flag cases as expanded access claims based on information
submitted in the remarks field for claims submitted on or after October
1, 2022 (87 FR 48896). We also noted that we were in the process of
making modifications to the MedPAR files to include information for
claims with the payer-only condition code ``ZC'' in the future, which
is used by the IPPS Pricer to identify a case where the CAR T-cell,
non-CAR T-cell, or other immunotherapy product is purchased in the
usual manner, but the case involves a clinical trial of a different
product so that the payment adjustment is not applied in calculating
the payment for the case (87 FR 49080).
Following the issuance of the FY 2023 IPPS/LTCH PPS final rule, we
issued guidance \21\ stating where there is expanded access use of
immunotherapy, the provider may submit condition code ``90'' on the
claim so that Pricer will apply the payment adjustment in calculating
payment for the case. We stated that MACs would no longer append
Condition Code `ZB' to inpatient claims reporting Billing Note NTE02
``Expand Acc Use'' on the electronic claim 837I or a remark ``Expand
Acc Use'' on a paper claim, effective for claims for discharges that
occur on or after October 1, 2022.
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\21\ https://www.cms.gov/files/document/r11727cp.pdf.
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We stated in the proposed rule that while we have applied a proxy
of standardized drug charges of less than $373,000 to identify clinical
trial claims and expanded access use cases under our special
methodology for the calculation of the relative weight for MS-DRG 018
to date, we believe that because of changes that have occurred since
CMS initially adopted this policy, it may no longer be necessary to
apply this proxy to identify these claims. In the FY 2021 IPPS/LTCH PPS
final rule, we stated that because ICD-10-CM diagnosis code Z00.6 is
required to be included with clinical trial cases, we expect hospitals
to include this code for such cases grouping to MS-DRG 018 for FY 2021
and all subsequent years, and we believe that providers have continued
to gain experience with the use of ICD-10-CM diagnosis code Z00.6 to
report cases involving a clinical trial of CAR T-cell therapy. This is
supported by our observation that the percentage of claims reporting
standardized drug charges of less than $373,000 that do not report ICD-
10-CM code Z00.6 relative to all claims that group to MS-DRG 018 fell
significantly from the FY 2019 data (used in the FY 2021 ratesetting)
to the FY 2022 data (used in the FY 2024 ratesetting). For example, in
the FY 2019 MedPAR data used for the FY 2021 IPPS/LTCH PPS final rule,
cases that we identified as clinical trial cases (using our proxy of
standardized drug charges of less than $373,000) that did not contain
ICD-10-CM diagnosis code Z00.6 comprised 18 percent of all cases that
grouped to MS-DRG 018. In the FY 2022 MedPAR data used for the FY 2024
IPPS/LTCH PPS proposed rule, cases that we identified as clinical trial
cases using our proxy that did not contain ICD-10-CM diagnosis code
Z00.6 comprised 4 percent of all cases that grouped to MS-DRG 018. In
addition, prior to FY 2022, we were unable to identify cases in the
MedPAR claims data that were provided as part of expanded access use in
developing the relative weights. The December update of the FY 2022
MedPAR claims data now includes a field that identifies whether or not
the claim includes expanded access use of immunotherapy. For the FY
2022 MedPAR claims data, this field identifies whether or not the claim
includes condition code ZB. For the FY 2023 MedPAR data and for
subsequent years, this field will identify whether or not the claim
includes condition code 90. This allows us to exclude these claims,
similar to our methodology for clinical trial cases, in the calculation
of the relative weight for MS-DRG 018, without relying on a proxy. (We
noted that because the expanded access indicator was not available
prior to the FY 2022 MedPAR, the comparison of cases identified using
the proxy, as described previously, did not include the cases in the FY
2022 MedPAR data used for the FY 2024 IPPS/LTCH PPS proposed rule with
an expanded access indicator on the claim, as including these cases
would mean we were not comparing the same group of cases). We further
note that the MedPAR files now also include a variable that indicates
whether the claim includes the payer-only condition code ``ZC'', which
identifies a case involving the clinical trial of a different product
where the CAR T-cell, non-CAR T-cell, or other immunotherapy product is
purchased in the usual manner.
Therefore, in the FY 2024 IPPS/LTCH PPS proposed rule, we proposed
two changes to our methodology for identifying clinical trial claims
and expanded access use claims in MS-DRG 018. First, we proposed to
exclude claims with the presence of condition code ``90'' (or, for FY
2024 ratesetting, which is based on the FY 2022 MedPAR data, the
presence of condition code ``ZB'') and claims that contain ICD-10-CM
diagnosis code Z00.6 without payer-only code ``ZC'' that group to MS-
DRG 018 when calculating the average cost for MS-DRG 018. Second, for
the reasons described previously, we proposed to no longer use the
proxy of standardized drug charges of less than $373,000 to identify
clinical trial claims and expanded access use cases when calculating
the average cost for MS-DRG 018. Accordingly, we proposed that in
calculating the relative weight for MS-DRG 018 for FY 2024, only those
claims that group to MS-DRG 018 that (1) contain ICD-10-CM diagnosis
code Z00.6 and do not include payer-only code ``ZC'' or (2) contain
condition code
[[Page 58791]]
``ZB'' (or, for subsequent fiscal years, condition code ``90'') would
be excluded from the calculation of the average cost for MS-DRG 018.
Consistent with this proposal, we also proposed to modify our
calculation of the adjustment to account for the CAR T-cell therapy
cases identified as clinical trial cases in calculating the national
average standardized cost per case that is used to calculate the
relative weights for all MS-DRGs:
Calculate the average cost for cases assigned to MS-DRG
018 that either--(a) contain ICD-10-CM diagnosis code Z00.6 and do not
contain condition code ``ZC'' or (b) contain condition code 90 (or, for
FY 2024 ratesetting, condition code ``ZB'').
Calculate the average cost for all other cases assigned to
MS-DRG 018.
Calculate an adjustor by dividing the average cost
calculated in step 1 by the average cost calculated in step 2.
Apply the adjustor calculated in step 3 to the cases
identified in step 1 as applicable clinical trial or expanded access
use cases, then add this adjusted case count to the non-clinical trial
case count prior to calculating the average cost across all MS-DRGs.
Applying this proposed methodology, based on the December 2022
update of the FY 2022 MedPAR file used for the proposed rule, we
estimated that the average costs of cases assigned to MS-DRG 018 that
are identified as clinical trial cases ($89,379) were 28 percent of the
average costs of the cases assigned to MS-DRG 018 that are identified
as nonclinical trial cases ($323,903). Accordingly, as we did for FY
2023, we proposed to adjust the transfer-adjusted case count for MS-DRG
018 by applying the proposed adjustor of 0.28 to the applicable
clinical trial and expanded access use immunotherapy cases, and to use
this adjusted case count for MS-DRG 018 in calculating the national
average cost per case, which is used in the calculation of the relative
weights. Therefore, in calculating the national average cost per case
for purposes of the proposed rule, each case identified as an
applicable clinical trial or expanded access use immunotherapy case was
adjusted by 0.28. As we did for FY 2023, we are applied this same
adjustor for the applicable cases that group to MS-DRG 018 for purposes
of budget neutrality and outlier simulations. We also proposed to
update the value of the adjustor based on more recent data for the
final rule.
Comment: Some commenters supported our proposal to remove the use
of the proxy of excluding cases with standardized drug charges of less
than $373,000, stating that it is consistent with existing hospital
billing practices and would simplify the reimbursement for chimeric
antigen receptor therapy (CAR-T) services. Many commenters opposed our
proposal, stating that it was premature to remove this trim. While
these commenters stated that provider charging practices are improving,
they expressed concern that some providers have limited experience
properly reporting claims for clinical trial and expanded access use
cases and some providers do not appear to have fully complied with CMS
guidance. A commenter requested that CMS maintain this trim for at
least one additional fiscal year.
A commenter also requested that CMS publish information on cases
included in the rate-setting methodology that are below the $373,000
threshold in the interest of transparency given the likely impact of
those cases on the base DRG payment. A commenter expressed concern that
4 percent of cases are still reporting standardized drug charges of
less than $373,000, given the relatively low volume of cases assigned
to MS-DRG 018. A commenter stated that the inclusion of the 4 percent
of cases would result in a potentially meaningful reduction in the base
DRG payment for CAR-T cases. Another commenter modeled the inclusion of
the 4 percent of cases and indicated that excluding them resulted in a
$3,100 reduction in the base payment for MS-DRG 018. Commenters
recommended that CMS monitor the impact of including these cases in
ratesetting to ensure base payments for DRG 018 remain stable prior to
removing the $373,000 low-cost threshold.
Response: We agree that removing the trim of excluding cases with
standardized drug charges of less than $373,000 would be consistent
with existing hospital billing practices. As discussed in the proposed
rule, we believe providers have continued to gain experience with the
use of ICD-10-CM diagnosis code Z00.6 to report cases involving a
clinical trial of CAR T-cell therapy, as well as coding of expanded
access use immunotherapy cases. This is supported by our observation
that the percentage of claims reporting standardized drug charges of
less than $373,000 that do not report ICD-10-CM code Z00.6 relative to
all claims that group to MS-DRG 018 fell significantly from the FY 2019
data (used in the FY 2021 ratesetting) to the FY 2022 data (used in the
FY 2024 ratesetting). While there continue to be a small percentage of
claims that report standardized drug charges of less than $373,000 and
do not report ICD-10-CM code Z00.6, we do not believe it is necessary
to continue to use the proxy until the number of these claims reaches
zero. We note that there is now only a very small percentage variation
in the relative weight with and without this proxy, unlike in prior
years. The $3,100 reduction referenced by the commenter in the range of
1 percent of the base DRG payment. With respect to the commenter who
requested that CMS publish the details regarding specific cases, we
note that information on obtaining the MedPAR Limited Data Set is
available on the CMS website, at https://www.cms.gov/Research-Statistics-Data-and-Systems/Files-for-Order/LimitedDataSets/MEDPARLDSHospitalNational.
After consideration of the public comments we received, we are
finalizing our proposals regarding the calculation of the relative
weight for MS-DRG 018. Applying this finalized methodology, based on
the March 2023 update of the FY 2022 MedPAR file used for this final
rule, we estimated that the average costs of cases assigned to MS-DRG
018 that are identified as clinical trial cases ($84,883) were 27
percent of the average costs of the cases assigned to MS-DRG 018 that
are identified as non-clinical trial cases ($314,862). Accordingly, as
we did for FY 2023, we are finalizing our proposal to adjust the
transfer-adjusted case count for MS-DRG 018 by applying the adjustor of
0.27 to the applicable clinical trial and expanded access use
immunotherapy cases, and to use this adjusted case count for MS-DRG 018
in calculating the national average cost per case, which is used in the
calculation of the relative weights. Therefore, in calculating the
national average cost per case for purposes of this final rule, each
case identified as an applicable clinical trial or expanded access use
immunotherapy case was adjusted by 0.27. As we did for FY 2023, we are
applying this same adjustor for the applicable cases that group to MS-
DRG 018 for purposes of budget neutrality and outlier simulations.
c. Cap for Relative Weight Reductions
In the FY 2023 IPPS/LTCH PPS final rule, we finalized a permanent
10-percent cap on the reduction in an MS-DRG's relative weight in a
given fiscal year, beginning in FY 2023. We also finalized a budget
neutrality adjustment to the standardized amount for all hospitals to
ensure that application of the permanent 10-percent cap does not result
in an increase or decrease of estimated aggregate payments. We refer
the reader to the FY 2023 IPPS/LTCH PPS final rule for further
discussion of this policy. In the Addendum to this IPPS/LTCH PPS final
rule, we present
[[Page 58792]]
the budget neutrality adjustment for reclassification and recalibration
of the FY 2024 MS-DRG relative weights with application of this cap.
Table 5 contains the FY 2024 MS-DRG relative weights with and without
the application of this cap. For a further discussion of the budget
neutrality adjustment for FY 2024, we refer readers to the Addendum of
this final rule.
3. Development of National Average CCRs
We developed the national average CCRs as follows:
Using the FY 2021 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. Then we created CCRs for each provider for each cost
center (see the supplemental data file for line items used in the
calculations) and removed any CCRs that were greater 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. Then we 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 19 cost centers by the corresponding national average CCR, we
summed the 19 ``costs'' across each MS-DRG to produce a total
standardized cost for the MS-DRG. The average standardized cost for
each MS-DRG was then computed as the total standardized cost for the
MS-DRG divided by the transfer-adjusted case count for the MS-DRG. The
average cost for each MS-DRG was then divided by the national average
standardized cost per case to determine the relative weight. The FY
2024 cost-based relative weights were then normalized by an adjustment
factor of 1.941198 so that the average case weight after recalibration
was equal to the average case weight before recalibration. The
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. We then applied
the permanent 10-percent cap on the reduction in a MS-DRG's relative
weight in a given fiscal year; specifically for those MS-DRGs for which
the relative weight otherwise would have declined by more than 10
percent from the FY 2023 relative weight, we set the FY 2024 relative
weight equal to 90 percent of the FY 2023 relative weight. The relative
weights for FY 2024 as set forth in Table 5 associated with this final
rule and available on the CMS website at https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/AcuteInpatientPPS reflect the
application of this cap.
The 19 national average CCRs for FY 2024 are as follows:
BILLING CODE 4120-01-P
[GRAPHIC] [TIFF OMITTED] TR28AU23.133
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
[[Page 58793]]
threshold of 10 cases as the minimum number of cases required to
compute a reasonable weight. We proposed to use that same case
threshold in recalibrating the proposed MS-DRG relative weights for FY
2024. Using data from the FY 2022 MedPAR file, there were 7 MS-DRGs
that contain fewer than 10 cases. For FY 2024, because we do not have
sufficient MedPAR data to set accurate and stable cost relative weights
for these low-volume MS-DRGs, we proposed to compute relative weights
for the low-volume MS-DRGs by adjusting their final FY 2023 relative
weights by the percentage change in the average weight of the cases in
other MS-DRGs from FY 2023 to FY 2024. The crosswalk table is as
follows.
[GRAPHIC] [TIFF OMITTED] TR28AU23.134
BILLING CODE 4120-01-C
Comment: A commenter requested that CMS utilize the ``other'' CCR
for CAR-T product charges associated with revenue code 0891 to mitigate
charge compression problems until CMS data is available for cost center
0078. The commenter stated that this would result in a more appropriate
case cost and a higher relative weight for MS-DRG 018.
Response: We do not believe it would be appropriate to utilize the
``other'' CCR for CART product charges associated with revenue code
0891. The categories assigned to the ``other'' cost center are
categorically not described by another cost center. This is not the
case for CAR-T product charges, as the drug cost center describes the
same type of product. Therefore, we do not believe it is necessary to
make changes to the CCR used for CAR T-cell product charges.
After consideration of the public comments we received, we are
finalizing our proposals without modification.
E. Add-On Payments for New Services and Technologies for FY 2024
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. The regulations at
42 CFR 412.87 implement these provisions and Sec. 412.87(b) specifies
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 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. In addition, certain transformative
new devices and antimicrobial products may qualify under an alternative
inpatient new technology add-on payment pathway, as set forth in the
regulations at Sec. 412.87(c) and (d).
We note that section 1886(d)(5)(K)(i) of the Act requires that the
Secretary establish a mechanism to recognize the costs of new medical
services and technologies under the payment system established under
that subsection, which establishes the system for paying for the
operating costs of inpatient hospital services. The system of payment
for capital costs is established under section 1886(g) of the Act.
Therefore, as discussed in prior rulemaking (72 FR 47307 through
47308), we do not include capital costs in the add-on payments for a
new medical service or technology or make new technology add-on
payments under the IPPS for capital-related costs.
In this rule, 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 further 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), the FY 2020 IPPS/
LTCH PPS final rule (84 FR 42288 through 42300), and the FY 2021 IPPS/
LTCH PPS final rule (85 FR 58736 through 58742).
a. New Technology Add-on Payment Criteria
(1) Newness Criterion
Under the first criterion, as reflected in Sec. 412.87(b)(2), a
specific medical service or technology will no longer be considered
``new'' for purposes of new medical service or technology add-on
payments after CMS has recalibrated the MS-DRGs, based on available
data, to
[[Page 58794]]
reflect the cost of the technology. 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 whether: (1) a product uses the same or a similar
mechanism of action to achieve a therapeutic outcome; (2) a product is
assigned to the same or a different MS-DRG; and (3) 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).
(2) Cost Criterion
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 of the
cases involving a new medical service or technology will exceed a
threshold amount that is the lesser of 75 percent of the standardized
amount (increased to reflect the difference between cost and charges)
or 75 percent of one standard deviation beyond the geometric mean
standardized charge for all cases in the MS-DRG to which the new
medical service or technology is assigned (or the case-weighted average
of all relevant MS-DRGs if the new medical service or technology occurs
in many different MS-DRGs). The MS-DRG threshold amounts generally used
in evaluating new technology add-on payment applications for FY 2024
are presented in a data file that is available, along with the other
data files associated with the FY 2023 IPPS/LTCH PPS final rule and
correction notification, on the CMS website at: https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/AcuteInpatientPPS/index.
We note that, under the policy finalized in the FY 2021 IPPS/LTCH
PPS final rule (85 FR 58603 through 58605), beginning with FY 2022, we
use the proposed threshold values associated with the proposed rule for
that fiscal year to evaluate the cost criterion for all applications
for new technology add-on payments and previously approved technologies
that may continue to receive new technology add-on payments, if those
technologies would be assigned to a proposed new MS-DRG for that same
fiscal year.
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 2025 were
presented in a data file that is available on the CMS website, along
with the other data files associated with the FY 2024 proposed rule, by
clicking on the FY 2024 IPPS Proposed Rule Home Page at: https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/AcuteInpatientPPS/index. We noted that, for the reasons discussed in
section I.F. of the preamble of the FY 2024 IPPS/LTCH PPS proposed rule
(88 FR 26777) and this final rule, we proposed to use the FY 2022
MedPAR claims data for FY 2024 ratesetting. Consistent with this
proposal, for the FY 2025 proposed threshold values, we proposed to use
the FY 2022 claims data to set the proposed thresholds for applications
for new technology add-on payments for FY 2025.
As discussed in section I.E. of the preamble of this final rule, we
are finalizing our proposal to use the FY 2022 MedPAR claims data for
FY 2024 ratesetting. Accordingly, in this final rule, we are finalizing
that we will use FY 2022 claims data to set the thresholds for
applications for new technology add-on payments for FY 2025. The
finalized thresholds for applications for new technology add-on
payments for FY 2025 are presented in a data file that is available on
the CMS website, along with the other data files associated with this
FY 2024 final rule, by clicking on the FY 2024 IPPS Final Rule Home
Page at: https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/AcuteInpatientPPS/index.
In the September 7, 2001 final rule that established the new
technology add-on payment regulations (66 FR 46917), we discussed that
applicants should submit a significant sample of data to demonstrate
that the medical service or technology meets the high-cost threshold.
Specifically, applicants should submit a sample of sufficient size to
enable us to undertake an initial validation and analysis of the data.
We also discussed in the September 7, 2001 final rule (66 FR 46917) 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 further information on this
issue.
(3) Substantial Clinical Improvement Criterion
Under the third criterion at Sec. 412.87(b)(1), a medical service
or technology must represent an advance that substantially improves,
relative to technologies previously available, the diagnosis or
treatment of Medicare beneficiaries. In the FY 2020 IPPS/LTCH PPS final
rule (84 FR 42288 through 42292), we prospectively codified in our
regulations at Sec. 412.87(b) the following aspects of how we evaluate
substantial clinical improvement for purposes of new technology add-on
payments under the IPPS:
The totality of the circumstances is considered when
making a determination that a new medical service or technology
represents an advance that substantially improves, relative to services
or technologies previously available, the diagnosis or treatment of
Medicare beneficiaries.
A determination that a new medical service or technology
represents an advance that substantially improves, relative to services
or technologies previously available, the diagnosis or treatment of
Medicare beneficiaries means--
++ The new medical service or technology offers a treatment option
for a patient population unresponsive to, or ineligible for, currently
available treatments;
[[Page 58795]]
++ The new medical service or technology offers the ability to
diagnose a medical condition in a patient population where that medical
condition is currently undetectable, or offers the ability to diagnose
a medical condition earlier in a patient population than allowed by
currently available methods, and there must also be evidence that use
of the new medical service or technology to make a diagnosis affects
the management of the patient;
++ The use of the new medical service or technology significantly
improves clinical outcomes relative to services or technologies
previously available as demonstrated by one or more of the following: a
reduction in at least one clinically significant adverse event,
including a reduction in mortality or a clinically significant
complication; a decreased rate of at least one subsequent diagnostic or
therapeutic intervention; a decreased number of future hospitalizations
or physician visits; a more rapid beneficial resolution of the disease
process treatment including, but not limited to, a reduced length of
stay or recovery time; an improvement in one or more activities of
daily living; an improved quality of life; or, a demonstrated greater
medication adherence or compliance; or
++ The totality of the circumstances otherwise demonstrates that
the new medical service or technology substantially improves, relative
to technologies previously available, the diagnosis or treatment of
Medicare beneficiaries.
Evidence from the following published or unpublished
information sources from within the United States or elsewhere may be
sufficient to establish that a new medical service or technology
represents an advance that substantially improves, relative to services
or technologies previously available, the diagnosis or treatment of
Medicare beneficiaries: clinical trials, peer reviewed journal
articles; study results; meta-analyses; consensus statements; white
papers; patient surveys; case studies; reports; systematic literature
reviews; letters from major healthcare associations; editorials and
letters to the editor; and public comments. Other appropriate
information sources may be considered.
The medical condition diagnosed or treated by the new
medical service or technology may have a low prevalence among Medicare
beneficiaries.
The new medical service or technology may represent an
advance that substantially improves, relative to services or
technologies previously available, the diagnosis or treatment of a
subpopulation of patients with the medical condition diagnosed or
treated by the new medical service or technology.
We refer the reader to the FY 2020 IPPS/LTCH PPS final rule (84 FR
42288 through 42292) for additional discussion of the evaluation of
substantial clinical improvement for purposes of new technology add-on
payments under the IPPS.
We note, consistent with the discussion in the FY 2003 IPPS final
rule (67 FR 50015), that while FDA has regulatory responsibility for
decisions related to marketing authorization (for example, approval,
clearance, etc.), we do not rely upon FDA criteria in our evaluation of
substantial clinical improvement for purposes of determining what
services and technologies qualify for new technology add-on payments
under Medicare. This criterion does not depend on the standard of
safety and effectiveness on which FDA relies but on a demonstration of
substantial clinical improvement in the Medicare population.
b. Alternative Inpatient New Technology Add-on Payment Pathway
Beginning with applications for FY 2021 new technology add-on
payments, under the regulations at Sec. 412.87(c), a medical device
that is part of FDA's Breakthrough Devices Program may qualify for the
new technology add-on payment under an alternative pathway.
Additionally, under the regulations at Sec. 412.87(d) for certain
antimicrobial products, beginning with FY 2021, a drug that is
designated by FDA as a Qualified Infectious Disease Product (QIDP),
and, beginning with FY 2022, a drug that is approved by FDA under the
Limited Population Pathway for Antibacterial and Antifungal Drugs
(LPAD), may also qualify for the new technology add-on payment under an
alternative pathway. We refer the reader to the FY 2020 IPPS/LTCH PPS
final rule (84 FR 42292 through 42297) and the FY 2021 IPPS/LTCH PPS
final rule (85 FR 58737 through 58739) for further discussion on this
policy. We note that a technology is not required to have the specified
FDA designation at the time the new technology add-on payment
application is submitted. CMS reviews the application based on the
information provided by the applicant only under the alternative
pathway specified by the applicant at the time of application
submission. However, to receive approval for the new technology add-on
payment under that alternative pathway, the technology must have the
applicable FDA designation and meet all other requirements in the
regulations in Sec. 412.87(c) and (d), as applicable.
(1) Alternative Pathway for Certain Transformative New Devices
For applications received for new technology add-on payments for FY
2021 and subsequent fiscal years, a medical device designated under
FDA's Breakthrough Devices Program that has received FDA marketing
authorization will be considered not substantially similar to an
existing technology for purposes of the new technology add-on payment
under the IPPS, and will not need to meet the requirement under Sec.
412.87(b)(1) that it represent an advance that substantially improves,
relative to technologies previously available, the diagnosis or
treatment of Medicare beneficiaries. Under this alternative pathway, a
medical device that has received FDA marketing authorization (that is,
has been approved or cleared by, or had a De Novo classification
request granted by, FDA) as a Breakthrough Device, for the indication
covered by the Breakthrough Device designation, will need to meet the
requirements of Sec. 412.87(c). We note that in the FY 2021 IPPS/LTCH
PPS final rule (85 FR 58734 through 58736), we clarified our policy
that a new medical device under this alternative pathway must receive
marketing authorization for the indication covered by the Breakthrough
Devices Program designation. We refer the reader to the FY 2021 IPPS/
LTCH PPS final rule (85 FR 58734 through 58736) for further discussion
regarding this clarification.
(2) Alternative Pathway for Certain Antimicrobial Products
For applications received for new technology add-on payments for
certain antimicrobial products, beginning with FY 2021, if a technology
is designated by FDA as a QIDP and received FDA marketing
authorization, and, beginning with FY 2022, if a drug is approved under
FDA's LPAD pathway and used for the indication approved under the LPAD
pathway, it will be considered not substantially similar to an existing
technology for purposes of new technology add-on payments and will not
need to meet the requirement that it represent an advance that
substantially improves, relative to technologies previously available,
the diagnosis or treatment of Medicare beneficiaries. Under this
alternative pathway for QIDPs and LPADs, a medical product that has
received FDA marketing authorization and is designated by FDA as a QIDP
or approved under the LPAD pathway will need to meet the requirements
of Sec. 412.87(d). We refer
[[Page 58796]]
the reader to the FY 2020 IPPS/LTCH PPS final rule (84 FR 42292 through
42297) and FY 2021 IPPS/LTCH PPS final rule (85 FR 58737 through 58739)
for further discussion on this policy.
We note that, in the FY 2021 IPPS/LTCH PPS final rule (85 FR 58737
through 58739), we clarified that a new medical product seeking
approval for the new technology add-on payment under the alternative
pathway for QIDPs must receive FDA marketing authorization for the
indication covered by the QIDP designation. We also finalized our
policy to expand our alternative new technology add-on payment pathway
for certain antimicrobial products to include products approved under
the LPAD pathway and used for the indication approved under the LPAD
pathway.
c. Additional Payment for New Medical Service or Technology
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. As noted
previously, we do not include capital costs in the add-on payments for
a new medical service or technology or make new technology add-on
payments under the IPPS for capital-related costs (72 FR 47307 through
47308).
For discharges occurring before October 1, 2019, under Sec.
412.88, if the costs of the discharge (determined by applying operating
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), CMS made 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.
Beginning with discharges on or after October 1, 2019, for the
reasons discussed in the FY 2020 IPPS/LTCH PPS final rule (84 FR 42297
through 42300), we finalized an increase in the new technology add-on
payment percentage, as reflected at Sec. 412.88(a)(2)(ii).
Specifically, for a new technology other than a medical product
designated by FDA as a QIDP, beginning with discharges on or after
October 1, 2019, if the costs of a discharge involving a new technology
(determined by applying 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) 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. For a new technology that is a
medical product designated by FDA as a QIDP, beginning with discharges
on or after October 1, 2019, if the costs of a discharge involving a
new technology (determined by applying 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) 75 percent of the costs of the new
medical service or technology; or (2) 75 percent of the amount by which
the costs of the case exceed the standard DRG payment. For a new
technology that is a medical product approved under FDA's LPAD pathway,
beginning with discharges on or after October 1, 2020, if the costs of
a discharge involving a new technology (determined by applying 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) 75 percent of
the costs of the new medical service or technology; or (2) 75 percent
of the amount by which the costs of the case exceed the standard DRG
payment. As set forth in Sec. 412.88(b)(2), unless the discharge
qualifies for an outlier payment, the additional Medicare payment will
be limited to the full MS-DRG payment plus 65 percent (or 75 percent
for certain antimicrobial products (QIDPs and LPADs)) of the estimated
costs of the new technology or medical service. We refer the reader to
the FY 2020 IPPS/LTCH PPS final rule (84 FR 42297 through 42300) for
further discussion on the increase in the new technology add-on payment
beginning with discharges on or after October 1, 2019.
We note that, consistent with the prospective nature of the IPPS,
we finalize the new technology add on payment amount for technologies
approved or conditionally approved for new technology add-on payments
in the final rule for each fiscal year and do not make mid-year changes
to new technology add-on payment amounts. Updated cost information may
be submitted and included in rulemaking for the following fiscal year.
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 subsequent years have not been subjected to budget neutrality.
d. Evaluation of Eligibility Criteria for New Medical Service or
Technology Applications
In the FY 2009 IPPS final rule (73 FR 48561 through 48563), we
modified our regulation at Sec. 412.87 to codify our longstanding
practice of how CMS evaluates the eligibility criteria for new 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 specified 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. In the FY 2021 IPPS/LTCH PPS final rule, to more
precisely describe the various types of FDA approvals, clearances and
classifications that we consider under our new technology add-on
payment policy, we finalized a technical clarification to the
regulation to indicate that new technologies must receive FDA marketing
authorization (such as pre-market approval (PMA); 510(k) clearance; the
granting of a De Novo classification request, or approval of a New Drug
Application (NDA)) by July 1 of the year prior to the beginning of the
fiscal year for which the application is being considered. Consistent
with our longstanding policy, we consider FDA marketing authorization
as representing that a product has received FDA approval or clearance
when considering eligibility for the new technology add-on payment
under Sec. 412.87(e)(2) (85 FR 58742).
Additionally, in the FY 2021 IPPS/LTCH PPS final rule (85 FR 58739
through 58742), we finalized our proposal to provide conditional
approval for new technology add-on payment for a technology for which
an application is submitted under the alternative pathway for certain
antimicrobial products at Sec. 412.87(d) that does not receive FDA
marketing authorization by the July 1 deadline specified in Sec.
412.87(e)(2), provided that
[[Page 58797]]
the technology otherwise meets the applicable add-on payment criteria.
Under this policy, cases involving eligible antimicrobial products
would begin receiving the new technology add-on payment sooner,
effective for discharges the quarter after the date of FDA marketing
authorization provided that the technology receives FDA marketing
authorization by July 1 of the particular fiscal year for which the
applicant applied for new technology add-on payments.
As discussed in more detail in section II.E.9. of the preamble of
this final rule, in the FY 2024 IPPS/LTCH PPS proposed rule (88 FR
26779 through 26780), beginning with the new technology add-on payment
applications for FY 2025, we proposed, for technologies that are not
already FDA market authorized, to require applicants to have a complete
and active FDA market authorization request at the time of new
technology add-on payment application submission, and to provide
documentation of FDA acceptance or filing to CMS at the time of
application submission. We also proposed that, beginning with FY 2025
applications, in order to be eligible for consideration for the new
technology add-on payment for the upcoming fiscal year, an applicant
for new technology add-on payments must have received FDA approval or
clearance by May 1 rather than July 1 of the year prior to the
beginning of the fiscal year for which the application is being
considered (except for an application that is submitted under the
alternative pathway for certain antimicrobial products). Please refer
to section II.E.9. of the preamble of this final rule for a full
discussion of these proposals, the comments we received on these
proposals, and our final policies.
e. New Technology Liaisons
Many interested parties (including device/biologic/drug developers
or manufacturers, industry consultants, others) engage CMS for
coverage, coding, and payment questions or concerns. In order to
streamline engagement by centralizing the different innovation pathways
within CMS including new technology add-on payments, CMS has
established a team of new technology liaisons that can serve as an
initial resource for interested parties. This team is available to
assist with all of the following:
Help to point interested parties to or provide information
and resources where possible regarding process, requirements, and
timelines.
Coordinate and facilitate opportunities for interested
parties to engage with various CMS components.
Serve as a primary point of contact for interested parties
and provide updates on developments where possible or appropriate.
We receive many questions from parties interested in pursuing new
technology add-on payments who may not be entirely familiar with
working with CMS. While we encourage interested parties to first review
our resources available at https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/AcuteInpatientPPS/newtech, we know that there may
be additional questions about the application process. Interested
parties with further questions about Medicare's coverage, coding, and
payment processes, and about how they can navigate these processes,
whether for new technology add-on payments or otherwise, can contact
the new technology liaison team at [email protected].
f. Application Information for New Medical Services or Technologies
Applicants for add-on payments for new medical services or
technologies for FY 2025 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 (unless the application is under one of the
alternative pathways as previously described), along with a significant
sample of data to demonstrate that the medical service or technology
meets the high-cost threshold. CMS will review the application based on
the information provided by the applicant under the pathway specified
by the applicant at the time of application submission. 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 2025, once the application deadline has closed, CMS will post on
its website a list of the applications submitted, along with a brief
description of each technology as provided by the applicant.
As discussed in the FY 2023 IPPS/LTCH PPS final rule (87 FR 48986
through 48990), we finalized our proposal to publicly post online new
technology add-on payment. applications, including the completed
application forms, certain related materials, and any additional
updated application information submitted subsequent to the initial
application submission (except certain volume, cost and other
information identified by the applicant as confidential), beginning
with the application cycle for FY 2024, at the time the proposed rule
is published. We also finalized that with the exception of information
included in a confidential information section of the application, cost
and volume information, and materials identified by the applicant as
copyrighted and/or not otherwise releasable to the public, the contents
of the application and related materials may be posted publicly, and
that we will not post applications that are withdrawn prior to
publication of the proposed rule. We refer the reader to the FY 2023
IPPS/LTCH PPS final rule (87 FR 48986 through 48990) for further
information regarding this policy.
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 and approved under OMB control number 0938-1347, and has an
expiration date of November 30, 2023.
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. The process for evaluating new medical service
and technology applications requires the Secretary to do all of the
following:
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
[[Page 58798]]
technology represents a substantial clinical improvement.
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 2024 prior
to publication of the FY 2024 IPPS/LTCH PPS proposed rule, we published
a notice in the Federal Register on October 3, 2022 (87 FR 59793), and
held a virtual town hall meeting on December 14, 2022. 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 the FY 2024 new medical
service and technology add-on payment applications before the
publication of the FY 2024 IPPS/LTCH IPPS proposed rule.
Approximately 180 individuals registered to attend the virtual town
hall meeting. We posted the recordings of the virtual town hall on the
CMS web page at: https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/AcuteInpatientPPS/newtech.
We considered each applicant's presentation made at the town hall
meeting, as well as written comments received by the December 22, 2022,
deadline, in our evaluation of the new technology add-on payment
applications for FY 2024 in the development of the FY 2024 IPPS/LTCH
PPS proposed rule. In response to the published notice and the December
14, 2022 New Technology Town Hall meeting, we received written comments
regarding the applications for FY 2024 new technology add on payments.
As explained earlier and in the Federal Register notice announcing the
New Technology Town Hall meeting (87 FR 59793 through 59795), the
purpose of the meeting was specifically to discuss the substantial
clinical improvement criterion with regard to pending new technology
add-on payment applications for FY 2024. Therefore, we did not
summarize any written comments in the proposed rule that were unrelated
to the substantial clinical improvement criterion. In section II.E.6.
of the preamble of the proposed rule, we summarized comments regarding
individual applications, or, if applicable, indicating that there were
no comments received in response to the New Technology Town Hall
meeting notice or New Technology Town Hall meeting, at the end of each
discussion of the individual applications.
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: https://www.cms.gov/Medicare/Coding/ICD10, including
guidelines for ICD-10-PCS Section ``X'' codes. We encourage providers
to view the material provided on ICD-10-PCS Section ``X'' codes.
4. New COVID-19 Treatments Add-On Payment (NCTAP)
In response to the COVID-19 public health emergency (PHE), we
established the New COVID-19 Treatments Add-on Payment (NCTAP) under
the IPPS for COVID-19 cases that meet certain criteria (85 FR 71157
through 71158). We believe that as drugs and biological products are
authorized for emergency use or approved by FDA for the treatment of
COVID-19 in the inpatient setting, it is appropriate to increase the
current IPPS payment amounts to mitigate any potential financial
disincentives for hospitals to provide new COVID-19 treatments during
the PHE. Therefore, effective for discharges occurring on or after
November 2, 2020 and until the end of the PHE for COVID-19, we
established the NCTAP to pay hospitals the lesser of (1) 65 percent of
the operating outlier threshold for the claim or (2) 65 percent of the
amount by which the costs of the case exceed the standard DRG payment,
including the adjustment to the relative weight under section 3710 of
the Coronavirus Aid, Relief, and Economic Security (CARES) Act, for
certain cases that include the use of a drug or biological product
currently authorized for emergency use or approved for treating COVID-
19.
In the FY 2022 IPPS/LTCH PPS final rule, we finalized a change to
our policy to extend NCTAP through the end of the FY in which the PHE
ends for all eligible products in order to continue to mitigate
potential financial disincentives for hospitals to provide these new
treatments, and to minimize any potential payment disruption
immediately following the end of the PHE. We also finalized that, for a
drug or biological product eligible for NCTAP that is also approved for
new technology add-on payments, we will reduce the NCTAP for an
eligible case by the amount of any new technology add-on payments so
that we do not create a financial disincentive between technologies
eligible for both the new technology add-on payment and NCTAP compared
to technologies eligible for NCTAP only (86 FR 45162). As the PHE ended
on May 11, 2023, as planned by the Department of Health and Human
Services (HHS),\22\ discharges involving eligible products will
continue to be eligible for the NCTAP through September 30, 2023 (that
is, through the end of FY 2023). The NCTAP will expire at the end of FY
2023 and no NCTAP will be made beginning in FY 2024 (that is, for
discharges on or after October 1, 2023).
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Further information about NCTAP, including updates and a list of
currently eligible drugs and biologicals, is available on the CMS
website at https://www.cms.gov/medicare/covid-19/new-covid-19-treatments-add-payment-nctap.
Comment: We received public comments related to NCTAP. A commenter
expressed appreciation for continued NCTAP through Sept. 30, 2023. A
few commenters recommended that CMS continue NCTAP, including a
commenter who recommended that CMS continue NCTAP through December 31,
2023, in order to provide financial assistance for COVID-19 treatments
as hospitals navigate the public health emergency (PHE) unwinding. A
commenter also recommended that when NCTAP does end, that CMS
automatically add any newly developed COVID-19 treatments to the new
technology add-on payment list without application. Some
[[Page 58799]]
commenters recommended that CMS monitor Medicare beneficiaries' access
to COVID-19 treatments in the hospital inpatient setting after NCTAP
expires to determine whether there is a reduction in beneficiaries'
access to treatment, with a commenter further recommending that CMS
take steps to minimize any barriers that could restrict the ability of
Medicare beneficiaries to receive lifesaving treatments after the
sunsetting of the NCTAP and other COVID-19 payment adjustments.
Response: We thank the commenters for their input. In the FY 2022
IPPS/LTCH PPS final rule, we finalized a change to our policy to extend
NCTAP through the end of the FY in which the PHE ends for all eligible
products in order to continue to mitigate potential financial
disincentives for hospitals to provide these new treatments, and to
minimize any potential payment disruption immediately following the end
of the PHE. We did not make any proposals to extend or modify NCTAP in
this year's proposed rule, and NCTAP will end on September 30, 2023, as
previously finalized in the FY 2022 IPPS/LTCH PPS final rule (86 FR
45160 through 45162). Further information about NCTAP, including
updates and a list of currently eligible drugs and biologicals, is
available on the CMS website at https://www.cms.gov/medicare/covid-19/new-covid-19-treatments-add-payment-nctap.
5. FY 2024 Status of Technologies Receiving New Technology Add-On
Payments for FY 2023
In this section of the final rule, we discuss the FY 2024 status of
24 technologies approved for FY 2023 new technology add-on payments, as
set forth in the tables that follow. In the FY 2024 IPPS/LTCH PPS
proposed rule (88 FR 26781 through 26785) we presented our proposals to
continue the new technology add-on payments for FY 2024 for those
technologies that were approved for the new technology add-on payment
for FY 2023 and which would still be considered ``new'' for purposes of
new technology add-on payments for FY 2024. We also presented our
proposals to discontinue new technology add-on payments for FY 2024 for
those technologies that were approved for the new technology add-on
payment for FY 2023 and which would no longer be considered ``new'' for
purposes of new technology add-on payments for FY 2024.
Additionally, we noted that we conditionally approved
DefenCathTM (a formulation of taurolidine/heparin) for FY
2023 new technology add-on payments under the alternative pathway for
certain antimicrobial products (87 FR 26955 through 26957), subject to
the technology receiving FDA marketing authorization by July 1, 2023.
In the FY 2024 IPPS/LTCH PPS proposed rule, we proposed that if
DefenCathTM receives FDA marketing authorization before July
1, 2023, we would continue making new technology add-on payments for
DefenCathTM for FY 2024. We proposed that if
DefenCathTM does not receive FDA marketing authorization by
July 1, 2023, then it would not be eligible for new technology add-on
payments for FY 2023, and therefore would not be eligible for the
continuation of new technology add-on payments for FY 2024. Because
DefenCathTM did not receive FDA approval by July 1, 2023, no
new technology add-on payments will be made for cases involving the use
of DefenCathTM for FY 2023, and DefenCathTM is
therefore not eligible for the continuation of new technology add-on
payments for FY 2024. We note that the applicant for
DefenCathTM also submitted an application for new technology
add-on payments for FY 2024 under the name taurolidine/heparin, and we
refer the reader to section II.E.7.b.(1). of the preamble of this final
rule for discussion of our conditional approval of the FY 2024
application for new technology add on payments for taurolidine/heparin.
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).
In the FY 2024 IPPS/LTCH PPS proposed rule (88 FR 26783), we
provided a table listing the technologies for which we proposed to
continue making new technology add-on payments for FY 2024 because they
are still considered ``new'' for purposes of new technology add-on
payments. This table also presented the newness start date, new
technology add-on payment start date, 3-year anniversary date of the
product's entry onto the U.S. market, relevant final rule citations
from prior fiscal years, proposed maximum add-on payment amount, and
coding assignments for each technology. We referred readers to the
cited final rules in the following table for a complete discussion of
the new technology add-on payment application, coding and payment
amount for these technologies, including the applicable indications and
discussion of the newness start date.
We invited public comments on our proposals to continue new
technology add-on payments for FY 2024 for the technologies listed in
the table in the proposed rule.
Comment: We received multiple comments in support of our proposed
continuation of new technology add-on payments for FY 2024 for those
technologies that were approved for the new technology add-on payment
for FY 2023 and which would still be considered ``new'' for purposes of
new technology add-on payments for FY 2024.
Response: We appreciate the commenters' support.
After consideration of the public comments we received, we are
finalizing our proposals to continue new technology add-on payments for
FY 2024 for the technologies that were approved for new technology add-
on payment for FY 2023 and would still be considered ``new'' for
purposes of new technology add-on payments for FY 2024, as listed in
the proposed rule and in the following Table II.F.-01 in this section
of this final rule.
Table II.F.-01 in this final rule presents the newness start date,
new technology add-on payment start date, 3-year anniversary date of
the product's entry onto the U.S. market, relevant final rule citations
from prior fiscal years, maximum add-on payment amount, and coding
assignments. We refer readers to the final rules cited in the following
table for a complete discussion of the new technology add-on payment
application, coding and payment amount for these technologies,
including the applicable indications and discussion of the newness
start date.
BILLING CODE 4120-01-P
[[Page 58800]]
[GRAPHIC] [TIFF OMITTED] TR28AU23.135
In the FY 2024 IPPS/LTCH PPS proposed rule (88 FR 26785), we
provided Table II.P.-02 listing the technologies for which we proposed
to discontinue making new technology add-on payments for FY 2024
because
[[Page 58801]]
they are no longer ``new'' for purposes of new technology add-on
payments. This table also presented the newness start date, new
technology add-on payment start date, the 3-year anniversary date of
the product's entry onto the U.S. market, and relevant final rule
citations from prior fiscal years. We referred readers to the cited
final rules in the table for a complete discussion of each new
technology add-on payment application and the coding and payment amount
for these technologies, including the applicable indications and
discussion of the newness start date.
In the FY 2024 IPPS/LTCH PPS proposed rule (88 FR 26784), we noted,
as discussed in the FY 2023 IPPS/LTCH PPS final rule (87 FR 48939) and
in previous rulemaking, the intent of section 1886(d)(5)(K) of the Act
and regulations under Sec. 412.87(b)(2) is to pay for new medical
services and technologies for the first 2 to 3 years that a product
comes on the market, during the period when the costs of the new
technology are not yet fully reflected in the MS-DRG weights (69 FR
49002). While our policy is, generally, to begin the newness period on
the date of FDA approval or clearance or, if later, the date of
availability of the product on the U.S. market, as discussed in prior
rulemaking (77 FR 53348), we have noted that data reflecting the costs
of products that have received an emergency use authorization (EUA)
could become available as soon as the date of the EUA issuance and
prior to receiving FDA approval or clearance (86 FR 45159). With
respect to the Hemolung RAS, which received an EUA on April 22, 2020,
when used for patients with COVID-19, we discussed whether the newness
period for the use of the Hemolung RAS for patients with COVID-19
should begin on the date of its EUA (April 22, 2020), when the product
became available on the market for this indication. We described a
public comment submitted by the applicant for Hemolung RAS which stated
that the newness period for COVID-19 Hemolung RAS cases should begin on
November 15, 2021 (the date of commercial availability of the De Novo
classified device), instead of April 22, 2020 (the date of the Hemolung
RAS EUA). The applicant indicated that it provided the Hemolung RAS to
hospitals free or at cost to swiftly respond to the global pandemic,
and that it did not profit from EUA therapies. The applicant stated
that additionally, during the EUA period, hospitals were not seeking
payment for Hemolung RAS therapy. The applicant stated that, therefore,
cost data collected during the EUA period and prior to FDA clearance do
not accurately reflect the added cost of Hemolung RAS therapy. In our
response, we noted that, while the commenter stated that it provided
the Hemolung RAS to hospitals free or at cost, and that hospitals were
not seeking payment for the Hemolung RAS therapy during the EUA period,
additional information regarding whether hospitals charged for use of
the Hemolung RAS therapy between the date of its EUA and the date of
commercial availability of the De Novo classified device, and how it
impacts whether use of the technology may be reflected in the data,
would be helpful in determining that data reflecting the cost of the
product did not become available until the date of commercial
availability of the De Novo classified device.
We stated in the FY 2024 IPPS/LTCH PPS proposed rule (88 FR 26784),
that in the absence of additional information to support a conclusion
that data reflecting the cost of the Hemolung RAS when used for
patients with COVID-19 did not begin to become available as of the
issuance of the EUA on April 22, 2020, we were proposing to discontinue
new technology add-on payments for FY 2024 for Hemolung RAS patients
with hypercapnic respiratory failure related to COVID-19, as the
technology will no longer be considered new for this indication. We
further stated that, as discussed in the FY 2023 IPPS/LTCH PPS final
rule, we continued to welcome additional information regarding whether
hospitals charged for use of the Hemolung RAS therapy between the date
of its EUA and the date of commercial availability of the De Novo
classified device, and how it impacts whether use of the technology may
be reflected in the data. We further noted, as set forth in Table
II.P.-01 of the FY 2024 IPPS/LTCH PPS proposed rule (88 FR 26783), that
we were proposing to continue the new technology add-on payment in FY
2024 for the use of the Hemolung RAS for patients with other causes of
hypercapnic respiratory failure unrelated to COVID-19, for which we
considered the beginning of the newness period to commence on the date
of commercial availability of the De Novo classified device (November
15, 2021), as discussed in the FY 2023 IPPS/LTCH PPS final rule (87 FR
48939). In order to identify use of Hemolung RAS unrelated to COVID-19,
we proposed to identify cases eligible for new technology add-on
payment with ICD-10-PCS code 5A0920Z without ICD-10-CM diagnosis code
U07.1 (COVID-19).
We invited public comments on our proposals to discontinue new
technology add-on payments for FY 2024 for the technologies listed in
Table II.P.-02 in the proposed rule.
Comment: A commenter disagreed with defining the newness start date
as the date of commercial availability/FDA approval date for cell and
gene therapies, and requested that CMS extend new technology add-on
payments into FY 2024 for both ABECMA[supreg] and CARVYKTITM
as the newness start date being utilized is extremely close to the mid-
year benchmark and also likely to be functionally inaccurate. The
commenter stated that while it does not have sales or ordering
information for ABECMA[supreg] and CARVYKTITM, it believes
that it is likely that the first commercial shipment of ABECMA[supreg]
took place weeks after FDA approval (which occurred March 26, 2021) and
would have crossed the April 1 threshold date, enabling these
technologies to be eligible for a third year of add-on payments. The
commenter explained that this delay is due to the fact that CAR T-cell
products take weeks to manufacture, in addition to the certification of
treatment sites as required under a product's REMS. The commenter
stated that it is far more logical to use the definition of ``market
date'' described in the May 2023 Medicaid proposed rule with regard to
covered outpatient drugs, which is the date on which the drug was first
sold (88 FR 34257), for cell and gene therapies due to their unique
manufacturing parameters. The commenter also requested that CMS
consider a standard third-year extension of new technology add-on
payments for cell and gene therapies in general, due to the unique
manufacturing process and low volume nature of the diseases treated.
Response: We thank the commenter for its input. We note that the
timeframe that a new technology can be eligible to receive new
technology add-on payments begins when data become available (69 FR
49003, 85 FR 58610). Consistent with the statute, a technology no
longer qualifies as ``new'' once it is more than 2 to 3 years old,
irrespective of how frequently it has been used in the Medicare
population. Therefore, if a product is more than 2 to 3 years old, we
consider its costs to be included in the MS-DRG relative weights
whether its use in the Medicare population has been frequent or
infrequent. In addition, while CMS may consider a documented delay in
the technology's market availability in our determination of newness,
our policy for determining
[[Page 58802]]
whether to extend new technology add-on payments for an additional year
generally applies regardless of the volume of claims for the technology
after the beginning of the newness period (83 FR 41280). We do not
consider the date of first sale of a product, or first shipment of a
product, as an indicator of the entry of a product onto the U.S.
market; neither of these dates indicate when a technology in fact
became available for sale. Similarly, our policy for determining
whether to extend new technology add-on payments for a third year
generally applies regardless of the claims volume for the technology
after the start of the newness period (85 FR 58610). We further note
that, as discussed in the FY 2023 IPPS/LTCH PPS final rule (87 FR
48911), in response to a comment from the applicant for Abecma[supreg]
stating that the date of first sale for this technology was May 10,
2021, and that add-on payments for Abecma[supreg] should therefore
extend past FY 2023, we requested additional information from the
applicant for Abecma[supreg] on when the technology first became
available for sale. We stated that, absent such additional information
from the applicant, we cannot determine a newness date based on a
documented delay in the technology's availability on the U.S. market.
The applicant did not submit further information related to the
availability of Abecma[supreg] for this final rule, nor did the
commenter provide such information. Accordingly, we are finalizing that
we consider March 26, 2021, to be the date the technology became
available on the market and the beginning of its newness period. As
discussed in the FY 2023 IPPS/LTCH PPS final rule (87 FR 48925),
because we determined that CARVYKTITM is substantially
similar to ABECMA[supreg], we consider the beginning of the newness
period for CARVYKTITM to be March 26, 2021 as well.
Comment: A commenter requested that CMS consider at least another
year of new technology add-on payments for aprevoTM, which
has a newness start date of December 3, 2020 for its ALIF and LLIF
indications, as many surgeries were not performed in 2020 due to the
COVID-19 pandemic. The commenter stated that with hospital revenue
trending negatively, this is an opportunity for hospitals to provide
exceptional care with appropriate reimbursement due to the clinical
benefits of this technology.
Response: We thank the commenter for its input. Consistent with the
statute and our implementing regulations, a technology is no longer
considered as ``new'' once it is more than 2 to 3 years old,
irrespective of how frequently the medical service or technology has
been used in the Medicare population (70 FR 47349, 85 FR 58610). As
such, once a technology has been available on the U.S. market for more
than 2 to 3 years, we consider the costs to be included in the MS-DRG
relative weights regardless of whether the technology's use in the
Medicare population has been frequent or infrequent. We further note
that we are renewing the TLIF indication for aprevoTM, which
has a newness start date of June 30, 2021, for FY 2024 as noted in the
previous table, as this indication will still be considered ``new''.
After consideration of the public comments we received, we are
finalizing our proposal to discontinue new technology add-on payments
for the technologies as listed in the proposed rule and in the
following Table II.F.-02 of this final rule for FY 2024 because they
are no longer ``new'' for purposes of new technology add-on payments.
This table also presents the newness start date, new technology add-on
payment start date, the 3-year anniversary date of the product's entry
onto the U.S. market, and relevant final rule citations from prior
fiscal years. We also refer readers to the final rules cited in the
following table for a complete discussion of the new technology add-on
payment application, coding and payment amount for these technologies,
including the applicable indications and discussion of the newness
start dates.
[[Page 58803]]
[GRAPHIC] [TIFF OMITTED] TR28AU23.136
[[Page 58804]]
6. FY 2024 Applications for New Technology Add-On Payments (Traditional
Pathway)
As discussed previously, in the FY 2023 IPPS/LTCH PPS final rule,
we finalized our policy to publicly post online applications for new
technology add-on payment beginning with FY 2024 applications (87 FR
48986 through 48990). As noted in the FY 2023 IPPS/LTCH PPS final rule,
we stated in the proposed rule that we are continuing to summarize each
application in the proposed rule. However, we stated that while we are
continuing to provide discussion of the concerns or issues we
identified with respect to applications submitted under the traditional
pathway, we are providing more succinct information as part of the
summaries in the proposed and final rules regarding the applicant's
assertions as to how the medical service or technology meets the
newness, cost, and substantial clinical improvement criteria. We refer
readers to https://mearis.cms.gov/public/publications/ntap for the
publicly posted FY 2024 new technology add-on payment applications and
supporting information (with the exception of certain cost and volume
information, and information or materials identified by the applicant
as confidential or copyrighted). In addition, we noted that we made
available separate tables listing the ICD-10-CM codes, ICD-10-PCS
codes, and/or MS-DRGs related to the analyses of the cost criterion for
certain technologies for the FY 2024 new technology add-on payment
applications in Table 10 associated with the FY 2024 IPPS/LTCH PPS
proposed rule, available via the internet on the CMS website at https:/
/www.cms.gov/medicare/medicare-fee-for-service-payment/
acuteinpatientpps. Click on the link on the left side of the screen
titled ``FY 2024 IPPS Proposed Rule Home Page'' or ``Acute Inpatient--
Files for Download.'' Please see section VI of the Addendum of the
proposed rule for additional information regarding tables associated
with the proposed rule.
We received 27 applications for new technology add-on payments for
FY 2024 under the traditional new technology add-on payment pathway. In
accordance with the regulations under Sec. 412.87(e), applicants for
new technology add-on payments must have received 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. Eight applicants
withdrew their applications prior to the issuance of the proposed rule.
Subsequently, four applicants withdrew their respective applications
for sabizabulin, DuraGraft, VEST, and omidubicel prior to the issuance
of this FY 2024 IPPS/LTCH PPS final rule. In addition, two applicants,
Daiichi Sankyo and Pfizer, for Vanflyta and elranatamab respectively,
did not receive FDA approval for their technologies by July 1, 2023.
Therefore, Vanflyta and elranatamab are not eligible for consideration
for new technology add-on payments for FY 2024. Consistent with our
standard approach, we are not including in this final rule the
description and discussion of applications that were withdrawn or that
are ineligible for consideration for FY 2024 due to not meeting the
July 1 deadline, described previously, which were included in the FY
2024 IPPS/LTCH PPS proposed rule. We are also not summarizing nor
responding to public comments received regarding these withdrawn or
ineligible applications in this final rule. Of the remaining 13
applications, we are not approving the applications for
NexoBridTM, SeptiCyte[supreg] RAPID, and
XENOVIEWTM for the reasons discussed in the following
sections. We are approving the remaining 10 applications, with 4 of the
applications considered as 2 technologies due to substantial
similarity, for a total of 8 new approvals for new technology add-on
payments for FY 2024. A discussion of these 13 applications is
presented in the following sections.
a. CYTALUX[supreg] (Pafolacianine), First Indication
On Target Laboratories submitted an application for new technology
add-on payments for CYTALUX[supreg] for use in ovarian cancer for FY
2024. The applicant stated that CYTALUX[supreg] is the first targeted
intraoperative molecular imaging agent that illuminates ovarian cancer
in real time, enabling the detection of more cancer for resection.
CYTALUX[supreg] is an optical imaging agent comprised of a folic acid
analog conjugated with a fluorescent dye which binds to folate receptor
positive cancer cells and illuminates malignant lesions during surgery.
Per the applicant, CYTALUX[supreg] is used in adult patients with
ovarian cancer as an adjunct for intraoperative identification of
malignant lesions. CYTALUX[supreg] is to be used with a near-infrared
imaging system (NIR) cleared by the FDA for specific use with
CYTALUX[supreg]. We note that On Target Laboratories also submitted a
second application for new technology add-on payments for
CYTALUX[supreg] for FY 2024 for use in lung cancer, as discussed
separately in this section.
Please refer to the online application posting for CYTALUX[supreg],
available at https://mearis.cms.gov/public/publications/ntap/NTP221017X8NAN, for additional detail describing the technology and the
disease treated by the technology.
With respect to the newness criterion, the applicant stated that a
new drug application (NDA) for CYTALUX[supreg] was approved by FDA on
November 29, 2021, as an optical imaging agent indicated in adult
patients with ovarian cancer as an adjunct for intraoperative
identification of malignant lesions. According to the applicant,
CYTALUX[supreg] had market availability delayed until April 15, 2022,
due to supply/product availability. The recommended dose of
CYTALUX[supreg] is a single intravenous infusion of 0.025 mg/kg diluted
in 250 mL of 5% Dextrose Injection, administered prior to surgery over
60 minutes using a dedicated infusion line.
The applicant submitted a request for a unique ICD-10-PCS procedure
codes for CYTALUX[supreg] and was granted approval to use the following
procedure codes effective October 1, 2023: 8E0U0EN (Fluorescence guided
procedure of female reproductive system using pafolacianine, open
approach), 8E0U3EN (Fluorescence guided procedure of female
reproductive system using pafolacianine, percutaneous approach),
8E0U4EN (Fluorescence guided procedure of female reproductive system
using pafolacianine, percutaneous endoscopic approach), 8E0U7EN
(Fluorescence guided procedure of female reproductive system using
pafolacianine, via natural or artificial opening), and 8E0U8EN
(Fluorescence guided procedure of female reproductive system using
pafolacianine, via natural or artificial opening endoscopic). The
applicant provided a list of diagnosis codes that may be used to
currently identify this indication for CYTALUX[supreg], and
differentiate it from the lung cancer indication, under the ICD-10-CM
coding system. Please refer to the online application posting for the
complete list of ICD-10-CM codes provided by the applicant.
As previously discussed, if a technology meets all three of the
substantial similarity criteria under the newness criterion, it would
be considered substantially similar to an existing technology and would
not be considered ``new'' for the purpose of new technology add-on
payments.
With respect to the substantial similarity criteria, the applicant
believed that CYTALUX[supreg] is not substantially similar to other
currently
[[Page 58805]]
available technologies because there are no other optical imaging
agents with the same active ingredient, nor the same mechanism of
action for the same indication of ovarian cancer, and that therefore,
the technology meets the newness criterion. The following table
summarizes the applicant's assertions regarding the substantial
similarity criteria. Please see the online application posting for
CYTALUX[supreg] for the applicant's complete statements in support of
its assertion that CYTALUX[supreg] is not substantially similar to
other currently available technologies.
[GRAPHIC] [TIFF OMITTED] TR28AU23.137
We invited public comments on whether CYTALUX[supreg] is
substantially similar to existing technologies and whether
CYTALUX[supreg] meets the newness criterion.
Comment: The applicant reiterated that there are no existing FDA-
approved drugs/biological products that are used as an adjunct for
intraoperative identification of malignant lesions in adults with
ovarian cancer other than CYTALUX[supreg]. The applicant also
reiterated that there is no other drug marketed under the same active
ingredient category or generic name, nor which has the same mechanism
of action to target the folate receptor to illuminate cancerous
lesions. In terms of newness, the applicant asserted that the
appropriate newness date for CYTALUX[supreg] for ovarian cancer is
April 15, 2022, the date on which a supply of CYTALUX[supreg] was first
made available for sale. The applicant stated that CYTALUX[supreg]
experienced a documented and verifiable delay in market entry, as
CYTALUX[supreg] was approved for ovarian cancer in November 2021 but
experienced a delay in commercialization primarily due to external
circumstances. The applicant further explained that as CYTALUX[supreg]
was not available before April 15, 2022, and there were no clinical
uses of CYTALUX[supreg] between the date of FDA approval and its market
entry, the newness period for the technology should begin on April 15,
2022.
In addition, the applicant noted that initial clinical use of
CYTALUX[supreg] involved 20 cases that were performed at only three
select centers between May and June 2022 during a small commercial
pilot with remaining product lots manufactured specifically to support
planned clinical development. The applicant explained that the batch of
CYTALUX[supreg] expired at the end of June 2022, thereby rendering it
impossible to perform additional cases. The applicant further explained
that due to the removal of the FDA cleared imaging system for use with
CYTALUX[supreg] from the market, a commercial lot was not initiated
again until there was strong confidence that the FDA would approve
CYTALUX[supreg] for lung cancer, and that therefore, the first full
commercial lot was released in June 2023, coinciding with the newness
date for CYTALUX[supreg] for lung cancer, as discussed separately in
this section.
Response: We thank the applicant for its comment. Based on our
review of comments received and information submitted by the applicant
as part of its FY 2024 new technology add-on payment application for
CYTALUX[supreg], we agree with the applicant that CYTALUX[supreg] is
the only adjunct for intraoperative identification of malignant lesions
in adults with ovarian cancer with a mechanism of action to target the
folate receptor to illuminate cancerous lesions. Therefore, we believe
that CYTALUX[supreg] is not substantially similar to existing treatment
options and meets the newness criterion. We consider the beginning of
the newness period to commence when CYTALUX[supreg] became commercially
available on April 15, 2022.
With respect to the cost criterion, to identify potential cases
representing patients who may be eligible for CYTALUX[supreg], the
applicant searched the FY 2021 Inpatient Standard Analytic File (IPSAF)
for cases reporting a combination of ICD-10-CM/PCS codes for ovarian
cancer that may require an adjunct for intraoperative identification of
malignant lesions. Using the inclusion/exclusion criteria described in
the following table, the applicant identified 3,281 claims mapping to
five MS-DRGs. The applicant noted that it limited its search to these
five MS-DRGs as 99 percent of cases map to these MS-DRGs. Please see
Table 10.8.A.--CYTALUX[supreg] (ovarian) Codes--FY 2024 associated with
the proposed rule for the complete list of codes that the applicant
indicated were included in its cost analysis. The applicant followed
the order of operations described in the following table and calculated
a final inflated average case-weighted standardized charge per case of
$133,657, which exceeded the average case-weighted threshold amount of
$93,649. Because the final inflated average case-weighted standardized
charge per case exceeded the average case-weighted threshold amount,
the
[[Page 58806]]
applicant asserted that CYTALUX[supreg] meets the cost criterion.
[GRAPHIC] [TIFF OMITTED] TR28AU23.138
We invited public comments on whether CYTALUX[supreg] meets the
cost criterion.
Comment: The applicant submitted a public comment reiterating that
because the final inflated average case-weighted standardized charge
per case exceeded the average case-weighted threshold amount,
CYTALUX[supreg] meets the cost criterion.
Response: We thank the applicant for its comment. We agree that the
final inflated average case-weighted standardized charge per case
exceeded the average case-weighted threshold amount. Therefore,
CYTALUX[supreg] meets the cost criterion.
With regard to the substantial clinical improvement criterion, the
applicant asserted that CYTALUX[supreg] represents a substantial
clinical improvement over existing technologies because CYTALUX[supreg]
enables the surgeon to identify cancer intraoperatively in real time
that otherwise would have been missed, enabling the surgeon to achieve
more complete resection in cytoreductive surgery for ovarian cancer.
Per the applicant, the results of the Phase 3 study confirm that
CYTALUX[supreg] serves as an adjunct to the surgeon, helping them to
identify additional cancer which otherwise would not have been
identified, enabling the surgeon to achieve more complete resection,
which is the goal of cytoreductive surgery. The applicant provided two
studies to support these claims as well as 11 background articles. The
background articles included studies to demonstrate the importance of
removing all residual disease (lesions) to improve patients' survival;
studies that showed that lesions can be diffuse and numerous, of
various sizes, and often not readily visible in the surgical field; a
study that showed, when CYTALUX[supreg] was used in a murine tumor
model and in early clinical studies, that it enabled identifying occult
tumor nodules and showed potential to eliminate positive tumor margins;
a study demonstrating that the folate receptor was expressed in most
ovarian cancers; and a study and a review supporting the use of
fluorescence in real-time to improve cancer surgery.\23\ The following
table summarizes the applicant's assertions regarding the substantial
clinical improvement criterion. Please see the online posting for
CYTALUX[supreg] for the applicant's complete statements regarding the
substantial clinical improvement criterion and the supporting evidence
provided.
---------------------------------------------------------------------------
\23\ Background articles are not included in the following table
but can be accessed via the online posting for the technology.
---------------------------------------------------------------------------
[[Page 58807]]
[GRAPHIC] [TIFF OMITTED] TR28AU23.139
[[Page 58808]]
[GRAPHIC] [TIFF OMITTED] TR28AU23.140
BILLING CODE 4120-01-C
In the FY 2024 IPPS/LTCH proposed rule (88 FR 26789 through 26790),
after review of the information provided by the applicant, we stated we
had the following concerns regarding whether CYTALUX[supreg] meets the
substantial clinical improvement criterion. We noted that
CYTALUX[supreg] showed a false positive rate of 24.8 percent that led
to resections in the Phase 3, randomized, multicenter, single-dose,
open-label study of this technology.\24\ While the applicant submitted
a separate comment stating there was no worsening in the safety profile
for patients with false positive results, we continued to question the
impact on patient outcomes when taking additional tissues that were
false positives. In addition, while the applicant provided background
citations to support the assertion that optimal or improved
cytoreduction of tumor results in improved survival in ovarian
adenocarcinoma, we noted that the Phase 3 study of CYTALUX[supreg]
appears to have been designed to assess the efficacy of the technology
rather than clinical outcomes such as survival, recurrence, or rate of
additional procedures. We noted that we would be interested in
additional or longer-term data demonstrating that CYTALUX[supreg]
results in improved outcomes such as improved survival or a reduced
rate of recurrence to support an assessment of whether CYTALUX[supreg]
represents a substantial clinical improvement.
---------------------------------------------------------------------------
\24\ Tanyi JL, Randall LM, Chambers SK, Butler KA, Winer IS,
Langstraat CL, Han ES, Vahrmeijer AL, Chon HS, Morgan MA, Powell MA,
Tseng JH, Lopez A, Wenham RM. A Randomized Phase 3 Study of
Pafolacianine Injection (OTL38) for Intraoperative Imaging of Folate
Receptor Positive Ovarian Cancer. J Clin Oncol. 2022. doi:10.1200/
JCO.22.00291.
---------------------------------------------------------------------------
We invited public comments on whether CYTALUX[supreg] meets the
substantial clinical improvement criterion.
Comment: Several commenters supported the application for
CYTALUX[supreg]. A commenter explained that ovarian cancer remains the
most lethal gynecologic cancer, and that complete surgical
cytoreduction is the single most important prognostic indicator for
survival. The commenter explained that although bulky disease can be
easily recognized, sub-centimeter implants are often difficult to
discriminate from adjacent normal tissue and may not be recognized and
[[Page 58809]]
resected. The commenter further noted that intraoperatively, a surgeon
has only two tools to improve the outcome of the tumor resections:
visual inspection and palpation, and thus, surgeons need tools to
augment these approaches. The commenter explained that the Phase 3
study of CYTALUX[supreg] demonstrates that the technology provides an
important real-time adjunct to current surgical approaches for ovarian
cancer, identifying malignant lesions that would not have been resected
without CYTALUX[supreg].
Another commenter stated that CYTALUX[supreg] allowed discovery of
more lesions which were not seen with the naked eye and these lesions
were removed safely to achieve the surgical goal of removal of all
visible tumor. The commenter asserted that during interval debulking
surgery after chemotherapy, as CYTALUX[supreg] improved detection of
viable tumor from scar tissue, lesions were removed and sent for quick
pathology evaluation, leading to efficiency of the surgical procedure,
reducing operative time and less surgical morbidity. The commenter
stated that additional removal of lesions discovered by CYTALUX[supreg]
use did not lead to an increase of surgical morbidities.
Response: We thank the commenters for their input and have taken it
into consideration in determining whether CYTALUX[supreg] meets the
substantial clinical improvement criterion, discussed later in this
section.
Comment: The applicant submitted a public comment regarding the
substantial clinical improvement criterion, and provided responses to
concerns raised by CMS in the proposed rule. In response to concerns on
how CYTALUX[supreg] improves health outcomes and changes patient
management, the applicant asserted that CYTALUX[supreg] helps surgeons
detect ovarian cancer that is currently undetectable during surgery,
allowing them to diagnose and treat additional cancer lesions earlier.
The applicant stated that in the CYTALUX[supreg] Phase 3 trial, the use
of CYTALUX[supreg] identified additional ovarian cancer on tissue that
was not part of the preoperative surgical plan and not otherwise
planned for resection in 27 percent of imaged patients.\25\ The
applicant stated that the surgeons involved in the Phase 3 study
responded that use of CYTALUX[supreg] led to a revision in their
surgical plan for 56 percent of patients and more complete debulking
was achieved in 51 percent of patients.\26\ The applicant stated that
identifying additional cancer on tissue not planned for resection in
the preoperative plan led to a change in the management of the patient,
allowing the surgeon to treat additional cancer which otherwise would
have been left behind and may not have been discovered and treated
until the patient presented with a recurrence. Therefore, the applicant
believes that CYTALUX[supreg] not only allowed identification of
cancerous lesions that would have otherwise remained undetected, but
that it also may potentially shorten the amount of treatment time for a
given patient by potentially reducing the risk of recurrence of ovarian
cancer. The applicant asserted that CYTALUX[supreg] improves health
outcomes through the more complete resection of residual disease. The
applicant added that, consistent with the goal of achieving R0 (no
remaining visible disease after surgery), following what surgeons
deemed to be complete (R0) resection with conventional methods of
identifying cancer during surgery, the surgeons indicated that
intraoperative imaging with CYTALUX[supreg] enabled them to achieve
``R(-1),'' having found additional disease that they otherwise would
not have found.
---------------------------------------------------------------------------
\25\ Tanyi JL, Randall LM, Chambers SK, Butler KA, Winer IS,
Langstraat CL, Han ES, Vahrmeijer AL, Chon HS, Morgan MA, Powell MA,
Tseng JH, Lopez A, Wenham RM. A Randomized Phase 3 Study of
Pafolacianine Injection (OTL38) for Intraoperative Imaging of Folate
Receptor Positive Ovarian Cancer. J Clin Oncol. 2022. doi:10.1200/
JCO.22.00291.
\26\ Tanyi JL, Randall LM, Chambers SK, Butler KA, Winer IS,
Langstraat CL, Han ES, Vahrmeijer AL, Chon HS, Morgan MA, Powell MA,
Tseng JH, Lopez A, Wenham RM. A Randomized Phase 3 Study of
Pafolacianine Injection (OTL38) for Intraoperative Imaging of Folate
Receptor Positive Ovarian Cancer. J Clin Oncol. 2022. doi:10.1200/
JCO.22.00291.
---------------------------------------------------------------------------
In addition, the applicant asserted that CYTALUX[supreg] improves
health outcomes through the more complete resections of residual
disease, which is supported by a wealth of peer-reviewed literature and
longstanding bedrock principles relating to the treatment of cancer.
The applicant stated that in the CYTALUX[supreg] Phase 3 trial, in 70
percent of patients in which additional ovarian cancer was detected by
CYTALUX[supreg] and not by white light palpation, the specimen size of
malignant lesions plus the tissue margin was greater than 1cm. The
applicant stated that in its Phase 3 trial, CYTALUX[supreg]
demonstrated the ability to aid surgeons by identifying additional
cancer intraoperatively otherwise unknown to the surgeon and on tissue
not planned for resection, in real time, enabling the surgeon to
achieve a more complete resection in cytoreductive surgery for ovarian
cancer and therefore improving clinical outcomes for these patients.
According to the applicant, substantial clinical literature
demonstrates that complete resections are associated with improved
survival in ovarian cancer, with a steep drop in survival with residual
tumors greater than 1 cm remaining following cytoreductive surgery. The
applicant asserted that CYTALUX[supreg] is not a therapeutic agent, and
stated that it therefore believes that long-term survival studies are
not necessary to prove the clinical improvement CYTALUX[supreg] can add
to help surgeons identify and diagnose additional cancer they may have
otherwise missed, thus supporting them in achieving the surgical goal.
With regard to the false positive rates, the applicant asserted
that CYTALUX[supreg]'s false positive rates do not meaningfully alter
CYTALUX[supreg]'s significant clinical improvement analysis. The
applicant conducted an analysis to compare false positives under white
light palpation and CYTALUX[supreg] with NIR imaging. The applicant
stated that rates and specimen size of false positives are comparable
between those identified and removed by the surgeon under standard
methods of white light and palpation and those identified and removed
by the surgeon under NIR imaging with CYTALUX[supreg]. The applicant
stated that, for CYTALUX[supreg] the presence of false positive results
did not cause negative patient outcomes or additional unnecessary
treatments as the removal of benign tissue is often a consequence of
standard surgical resection. Additionally, the applicant stated that
the false positive results after use of CYTALUX[supreg] were comparable
to those following standard treatment; and the false positive results
from use of CYTALUX[supreg] led to only a small amount of noncancerous
tissue being removed.
Response: We thank the applicant for its comment and the additional
information provided regarding the substantial clinical improvement
criterion.
Based on the additional information received, we agree with the
applicant and commenters that CYTALUX[supreg] represents a substantial
clinical improvement over existing technology because CYTALUX[supreg]
can detect ovarian cancer that is currently undetectable during
surgery, which enables the surgeon to diagnose and treat additional
cancer earlier, and affects the management of the patient by
identifying additional ovarian cancer not otherwise planned for
resection, leading to revisions in the surgical plan that result in
more complete resection of the cancer.
After consideration of the information included in the applicant's
new technology add-on payment application
[[Page 58810]]
and the comments received, we have determined that CYTALUX[supreg]
meets the criteria for approval for new technology add-on payment.
Therefore, we are approving new technology add-on payments for this
technology for FY 2024. Cases involving the use of CYTALUX[supreg] that
are eligible for new technology add-on payments will be identified by
ICD-10-PCS codes: 8E0U0EN (Fluorescence guided procedure of female
reproductive system using pafolacianine, open approach), 8E0U3EN
(Fluorescence guided procedure of female reproductive system using
pafolacianine, percutaneous approach), 8E0U4EN (Fluorescence guided
procedure of female reproductive system using pafolacianine,
percutaneous endoscopic approach), 8E0U7EN (Fluorescence guided
procedure of female reproductive system using pafolacianine, via
natural or artificial opening), or 8E0U8EN (Fluorescence guided
procedure of female reproductive system using pafolacianine, via
natural or artificial opening endoscopic).
In its application, the applicant estimated that the cost of
CYTALUX[supreg] is $4,250 per single-use vial (one vial is used per
patient). Under Sec. 412.88(a)(2), we limit new technology add-on
payments to the lesser of 65 percent of the average cost of the
technology, or 65 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 CYTALUX[supreg] is $2,762.50 for FY
2024.
b. CYTALUX[supreg] (Pafolacianine), Second Indication
On Target Laboratories submitted an application for new technology
add-on payments for CYTALUX[supreg] for use in lung cancer for FY 2024.
The applicant stated that CYTALUX[supreg] is the first targeted
intraoperative molecular imaging agent that illuminates lung cancer in
real time, enabling the detection of more cancer for resection.
CYTALUX[supreg] is an optical imaging agent comprised of a folic acid
analog conjugated with a fluorescent dye which binds to folate receptor
positive cancer cells and illuminates malignant lesions during surgery.
Per the applicant, CYTALUX[supreg] is used in adult patients with known
or suspected cancer in the lung as an adjunct for intraoperative
identification of pulmonary lesions. CYTALUX[supreg] is to be used with
a NIR cleared by the FDA for specific use with CYTALUX[supreg].
CYTALUX[supreg] is used by surgeons to illuminate cancer in real time
during surgery. We note that On Target Laboratories also submitted a
separate application for new technology add-on payments for
CYTALUX[supreg] for FY 2024 for use in ovarian cancer, as discussed
previously in this section.
Please refer to the online application posting for CYTALUX[supreg],
available at https://mearis.cms.gov/public/publications/ntap/NTP221017ED6BY, for additional detail describing the technology and the
disease treated by the technology.
With respect to the newness criterion, the applicant stated that
CYTALUX[supreg] received FDA approval in a supplemental new drug
application (sNDA), effective December 16, 2022, to include an
additional indication for lung cancer, following approval of the
original NDA for use in ovarian cancer. CYTALUX[supreg] is indicated as
an adjunct for intraoperative identification of malignant and non-
malignant pulmonary lesions in adult patients with known or suspected
cancer in the lung. According to the applicant, CYTALUX[supreg] will
have market availability delayed until approximately the middle of 2023
due to supply/product availability. The recommended dose of
CYTALUX[supreg] is a single intravenous infusion of 0.025 mg/kg diluted
in 250 mL of 5% Dextrose Injection, administered prior to surgery over
60 minutes using a dedicated infusion line. We noted that, as discussed
previously, the applicant stated that CYTALUX[supreg] for ovarian
cancer became commercially available on April 15, 2022. We were
interested in additional information regarding whether the versions or
formulations for CYTALUX[supreg] for use in lung cancer and ovarian
cancer are different, or further explanation regarding the longer delay
for the market availability for CYTALUX[supreg] for lung cancer.
The applicant submitted a request for unique ICD-10-PCS procedure
codes for CYTALUX[supreg] and was granted approval to use the following
procedure codes effective October 1, 2023: 8E0W0EN (Fluorescence guided
procedure of trunk region using pafolacianine, open approach), 8E0W3EN
(Fluorescence guided procedure of trunk region using pafolacianine,
percutaneous approach), 8E0W4EN (Fluorescence guided procedure of trunk
region using pafolacianine, percutaneous endoscopic approach), 8E0W7EN
(Fluorescence guided procedure of trunk region using pafolacianine, via
natural or artificial opening), and 8E0W8EN (Fluorescence guided
procedure of trunk region using pafolacianine, via natural or
artificial opening endoscopic). The applicant provided a list of
diagnosis codes that may be used to currently identify this indication
for CYTALUX[supreg], and differentiate it from the ovarian cancer
indication, under the ICD-10-CM coding system. Please refer to the
online application posting for the complete list of ICD-10-CM codes
provided by the applicant.
As previously discussed, if a technology meets all three of the
substantial similarity criteria under the newness criterion, it would
be considered substantially similar to an existing technology and would
not be considered ``new'' for the purpose of new technology add-on
payments.
With respect to the substantial similarity criteria, the applicant
believed that CYTALUX[supreg] is not substantially similar to other
currently available technologies because there are no other optical
imaging agents with the same active ingredient, nor same mechanism of
action, for the same indication, and that therefore, the technology
meets the newness criterion. The following table summarizes the
applicant's assertions regarding the substantial similarity criteria.
Please see the online application posting for CYTALUX[supreg] for the
applicant's complete statements in support of its assertion that
CYTALUX[supreg] is not substantially similar to other currently
available technologies.
BILLING CODE 4120-01-P
[[Page 58811]]
[GRAPHIC] [TIFF OMITTED] TR28AU23.141
We invited public comments on whether CYTALUX[supreg] is
substantially similar to existing technologies and whether
CYTALUX[supreg] meets the newness criterion.
Comment: The applicant submitted a public comment regarding the
newness criterion. The applicant reiterated that there are no existing
FDA approved drugs/biological products that are used as an adjunct for
intraoperative identification of malignant and non-malignant pulmonary
lesions in adult patients with known or suspected cancer in the lung
other than CYTALUX[supreg]. The applicant also reiterated that there is
no other drug marketed under the same active ingredient category or
generic name, nor which has the same mechanism of action to target the
folate receptor to illuminate cancerous lesions in the lung. In terms
of newness, the applicant asserted that the appropriate newness date
for CYTALUX[supreg] for lung cancer is June 5, 2023, the date
CYTALUX[supreg] became available for purchase. The applicant explained
that while CYTALUX[supreg] was approved in December 2022 to assist
surgeons in identifying lung lesions in adult patients with known or
suspected lung cancer, the product has never been sold or made
available to the market after its approval for use in lung cancer. As
discussed previously in this section, the applicant explained that
although the use of CYTALUX[supreg] for ovarian cancer was briefly
available on the market for a small limited pilot of 20 cases from
April through June 2022 at three select centers, the technology was
subsequently taken off the market due to the market withdrawal of the
necessary imaging system, and therefore a commercial lot of
CYTALUX[supreg] was not initiated again until there was strong
confidence that the FDA would approve CYTALUX[supreg] for use in lung
cancer. The applicant further stated that on June 5, 2023, the first
commercial lot of CYTALUX[supreg] became available for use in lung
cancer. The applicant asserted that therefore, because CYTALUX[supreg]
was not available on the market following FDA approval of
CYTALUX[supreg] for lung cancer, the appropriate newness date for
CYTALUX[supreg] for lung cancer would be June 5, 2023, the market
availability of the product.
Response: We thank the applicant for its comments. Based on our
review of comments received and information submitted by the applicant
as part of its FY 2024 new technology add-on payment application for
CYTALUX[supreg], we agree with the applicant that CYTALUX[supreg] is
the only adjunct for intraoperative identification of malignant and
non-malignant pulmonary lesions in adult patients with known or
suspected cancer in the lung with a mechanism of action to target the
folate receptor to illuminate cancerous lesions in the lung. Therefore,
we believe that CYTALUX[supreg] is not substantially similar to
existing treatment options and meets the newness criterion. We consider
the beginning of the newness period to commence when CYTALUX[supreg]
became commercially available on June 5, 2023.
With respect to the cost criterion, to identify potential cases
representing patients who may be eligible for CYTALUX[supreg], the
applicant searched the FY 2021 IPSAF for cases reporting a combination
of ICD-10-CM/PCS codes for malignant or suspected lung lesions. Using
the inclusion/exclusion criteria described in the following table, the
applicant identified 15,033 claims mapping to three MS-DRGs. The
applicant noted that it limited its search to these three MS-DRGs as 99
percent of cases map to these MS-DRGs. Please see Table 10.9.A.--
CYTALUX[supreg] (lung) Codes--FY 2024 associated with the proposed rule
for the complete list of codes that the applicant included in its cost
analysis. The applicant followed the order of operations described in
the following table and calculated a final inflated average case-
weighted standardized charge per case of $122,700, which exceeded the
average case-weighted threshold amount of $101,584. Because the final
inflated average case-weighted standardized charge per case exceeded
the average case-weighted threshold amount, the applicant asserted that
CYTALUX[supreg] meets the cost criterion.
[[Page 58812]]
[GRAPHIC] [TIFF OMITTED] TR28AU23.142
We invited public comments on whether CYTALUX[supreg] meets the
cost criterion.
Comment: The applicant submitted a comment reiterating that because
the final inflated average case-weighted standardized charge per case
exceeded the average case-weighted threshold amount, CYTALUX[supreg]
meets the cost criterion.
Response: We thank the applicant for its comment. We agree that the
final inflated average case-weighted standardized charge per case
exceeded the average case-weighted threshold amount. Therefore,
CYTALUX[supreg] meets the cost criterion.
With regard to the substantial clinical improvement criterion, the
applicant asserted that CYTALUX[supreg] represents a substantial
clinical improvement over existing technologies because CYTALUX[supreg]
enables the surgeon to visualize cancer intraoperatively, in real time,
that otherwise may have gone undetected. Per the applicant, the use of
the CYTALUX[supreg] during pulmonary resection for lung cancer
represents a significant potential advancement over current standards
of surgery by enhancing the intraoperative localization of pulmonary
nodules, improving the ability to remove them with clean margins, and
reducing the probability of leaving otherwise undetected malignant
synchronous lesions behind. The applicant provided six studies to
support these claims and nine background articles. The background
articles included studies about the importance of complete cancer
tissue resection to overall survival, the limitations of thoracoscopic
surgery by localizing the exact location of a pulmonary nodule for
resection, the low 5-year survival for lung cancer patients, and the
high rates of local recurrence after lung cancer surgery; one study
demonstrating that contrasted chest computed tomography (CT) scan is
not sufficient to identify pulmonary nodules that need resection; one
study supporting the need for cleaner margins during resection to
reduce local recurrence of lung cancer; one study supporting the use of
the folate receptor as an appropriate tumor specific marker; one study
indicating that folate-targeted agents may have a place in cancer
treatment before, as well as, after chemotherapy; and a study showing
that the folate receptor is expressed in the majority of lung cancers
and that CYTALUX[supreg] targets and binds to folate receptors and thus
the mechanism of action is a viable target for lung cancer.\27\ The
following table summarizes the applicant's assertions regarding the
substantial clinical improvement criterion. Please see the online
posting for CYTALUX[supreg] for the applicant's complete statements
regarding the substantial clinical improvement criterion and the
supporting evidence provided.
---------------------------------------------------------------------------
\27\ Background articles are not included in the following table
but can be accessed via the online posting for the technology.
---------------------------------------------------------------------------
[[Page 58813]]
[GRAPHIC] [TIFF OMITTED] TR28AU23.143
[[Page 58814]]
[GRAPHIC] [TIFF OMITTED] TR28AU23.144
[[Page 58815]]
[GRAPHIC] [TIFF OMITTED] TR28AU23.145
BILLING CODE 4120-01-C
In the FY 2024 IPPS/LTCH proposed rule (88 FR 26795), after review
of the information provided by the applicant, we stated we had the
following concerns regarding whether CYTALUX[supreg] meets the
substantial clinical improvement criterion. We noted that
CYTALUX[supreg] showed a false positive rate
[[Page 58816]]
of 25.8 percent that led to resections in the Phase 3, multicenter
study of this technology.\28\ While the applicant submitted a separate
comment stating there was no worsening in the safety profile for
patients with false positive results, we continued to question the
impact on patient outcomes when taking additional tissues that were
false positive. We noted that the authors discussed in the results of
the Phase 3 trial that there was a decreased rate of subsequent
diagnostic intervention. We questioned if they were referring to fewer
resections in future surgical procedure, and/or if this also implied a
subsequent positive outcome of reduced mortality. While the studies
provided in support of CYTALUX[supreg] measure identification of
lesions and changes in the scope of the surgical procedure, we noted
that the applicant did not provide data indicating that these endpoints
directly lead to improved clinical outcomes (for example, reduction in
mortality, hospitalizations, subsequent procedures, and/or rate of
recurrence) based on use of CYTALUX[supreg]. Rather, we stated that
improved outcomes were inferred by relying on the assumption that
increased or decreased scope of resection results in better outcomes.
We noted that we were interested in additional information or long-term
data measuring the impact of the technology on treatment outcomes or
the management of the patient to support that CYTALUX[supreg] results
in an improvement over the standard of care.
---------------------------------------------------------------------------
\28\ Singhal S, Sarkaria I., Martin L, Rice D, Blackmon S, Slade
H. Pafolacianine for Intraoperative Molecular Imaging for Cancer in
the Lung--The ELUCIDATE Trial (Manuscript in preparation). 2022.
---------------------------------------------------------------------------
We invited public comments on whether CYTALUX[supreg] meets the
substantial clinical improvement criterion.
Comment: The applicant submitted a public comment regarding the
substantial clinical improvement criterion and provided responses to
CMS's concerns from the proposed rule. With regard to improvement of
patient management, the applicant asserted that CYTALUX[supreg]
objectively improves surgeons' management of the patient through
enabling use of tissue-sparing procedures and by helping surgeons to
identify and more completely resect undetected cancerous lesions during
surgery. The applicant stated that as demonstrated in the Phase 3
ELUCIDATE trial, use of CYTALUX[supreg] allowed surgeons to localize
the primary lesion in 19 percent of patients whose lesion could not be
seen by white light and otherwise localized by the surgeon using
standard techniques and a positive/close margin (<10mm from the
resection line) in 38 percent of patients.\29\
---------------------------------------------------------------------------
\29\ Sarkaria IS, Martin LW, Rice DC, Blackmon SH, Slade HB,
Singhal S; ELUCIDATE Study Group. Pafolacianine for intraoperative
molecular imaging of cancer in the lung: The ELUCIDATE trial. J
Thorac Cardiovasc Surg. 2023 Mar 3:S0022-5223(23)00185-X. doi:
10.1016/j.jtcvs.2023.02.025. Epub ahead of print. PMID: 37019717.
---------------------------------------------------------------------------
In addition, the applicant asserted that the surgeon was able to
identify the lesion more quickly with CYTALUX[supreg] as compared to
preoperative localization techniques, thus improving the management of
the patient through reducing the amount of time the patient is under
anesthesia. The applicant stated that in the Phase 3 ELUCIDATE trial,
the median time to localize the primary nodule was 1 minute (range <1-
23), compared with another study showing that the mean procedural time
for robotic navigational bronchoscopy, which is a preferred method for
preoperative localization, was 67 minutes (range 37-97).\30\
---------------------------------------------------------------------------
\30\ Value of Robotic Navigational Bronchoscopy to Enhance
Diagnostic Yield and Guide Oncological Strategy in Treatment of
Pulmonary Nodules. Abstract presented at the 2023 American
Association of Thoracic Surgeons Annual Meeting.
---------------------------------------------------------------------------
Moreover, the applicant asserted that CYTALUX[supreg] aids
surgeons' ability to perform tissue-sparing procedures by providing
visualization of the precise location and borders of the tumor, which
helps surgeons determine where to resect tissue while ensuring a proper
margin. The applicant stated that results from the Phase 3 ELUCIDATE
trial indicated the maximum depth of lesions detected by
CYTALUX[supreg] alone was 27.9mm increasing to 37.7mm with both
CYTALUX[supreg] and white light while the minimum size of lesions
identified by CYTALUX[supreg] and not by standard white light was as
small as 2mm for synchronous lesions and 5mm for primary lesions.\31\
The applicant stated that Phase 2 and Phase 2 clinical trial date
showed CYTALUX[supreg] increased the surgeon's ability to detect the
primary lesion intraoperatively from 72 percent to 94 percent of
patients. The applicant stated that across all lesions in the Phase 2
and Phase 3 trials, 94 percent were folate receptor alpha or beta
positive, demonstrating the efficacy of CYTALUX[supreg]'s mechanism of
action across a multitude of cancer histologies in both primary lung
cancer and metastatic disease.
---------------------------------------------------------------------------
\31\ Abbas A, Kadakia S, Ambur V, Muro K, Kaiser L.
Intraoperative electromagnetic navigational bronchoscopic
localization of small, deep, or subsolid pulmonary nodules. J Thorac
Cardiovasc Surg. 2017 Jun;153(6):1581-1590. doi: 10.1016/
j.jtcvs.2016.12.044. Epub 2017 Feb 7. PMID: 28314525.
---------------------------------------------------------------------------
Additionally, the applicant asserted that appropriate staging is a
critical area to guide long-term treatment plans adjuvant to surgery,
since correct staging ensures improved patient care, enabling earlier
notification of the extent of disease and faster time to optimal
treatment. According to the applicant, in clinical trials,
CYTALUX[supreg] detected additional synchronous malignant lesions which
were not identified on preoperative imaging. The applicant stated that
one trial, the detection of 9 synchronous lesions in 8 percent of
patients (n = 7 out of 92) resulted in each of the 7 patients being
upstaged, enabling alterations to adjuvant treatment plans to reflect
the greater extent of disease.\32\ The applicant stated that in the
Phase 3 ELUCIDATE trial, CYTALUX[supreg] allowed the surgeon to
identify one more or additional synchronous malignant lesions that were
previously unidentified on preoperative scans nor intraoperatively in 8
percent of patients, with the majority outside the planned field of
resection.\33\
---------------------------------------------------------------------------
\32\ Gangadharan S, Sarkaria IN, Rice D, Murthy S, Braun J,
Kucharczuk J, Predina J, Singhal S. Multiinstitutional Phase 2
Clinical Trial of Intraoperative Molecular Imaging of Lung Cancer.
Ann Thorac Surg. 2021 Oct;112(4):1150-1159. doi: 10.1016/
j.athoracsur.2020.09.037. Epub 2020 Nov 19. PMID: 33221195.
\33\ Sarkaria IS, Martin LW, Rice DC, Blackmon SH, Slade HB,
Singhal S; ELUCIDATE Study Group. Pafolacianine for intraoperative
molecular imaging of cancer in the lung: The ELUCIDATE trial. J
Thorac Cardiovasc Surg. 2023 Mar 3:S0022-5223(23)00185-X. doi:
10.1016/j.jtcvs.2023.02.025. Epub ahead of print. PMID: 37019717.
---------------------------------------------------------------------------
In response to concerns on improvement of patient outcomes, the
applicant claimed that CYTALUX[supreg] improves health outcomes through
the more complete resection of otherwise undetected cancer, which is
supported by substantial peer-reviewed literature and longstanding
bedrock principles relating to the treatment of cancer. According to
the applicant, CYTALUX[supreg] improves surgeons' ability to treat the
disease more completely via resection, which thereby may reduce the
risk of recurrence and has the potential to increase the likelihood of
patient survival by assisting the surgeon to overcome each of these
established surgical challenges. The applicant stated that among the
Phase 3 ELUCIDATE participants, 53 percent had a clinically significant
event from use of CYTALUX[supreg]: in 19 percent of patients,
CYTALUX[supreg] was able to localize the primary lesion otherwise not
found by the surgeon using standard techniques; in 8 percent of
patients, CYTALUX[supreg] identified an unknown occult synchronous
lesions; and in 38 percent
[[Page 58817]]
of patients, CYTALUX[supreg] was able to identify a close resection
margin less than or equal to 10 mm.\34\ The applicant stated that use
of CYTALUX[supreg] led to a change in the overall scope of surgical
procedure for 29 percent of patients.\35\
---------------------------------------------------------------------------
\34\ Singhal S, Martin L, Rice D, Blackmon S, Murthy S,
Gangadharan S, Reddy R, Sarkaria I. Randomized, Multi Center Phase 3
Trial of Pafolacianine during Intraoperative Molecular Imaging of
Cancer in the Lung: Results of the ELUCIDATE Trial. AATS 102nd
Annual Meeting. Boston MA. May 2022.
\35\ Singhal S, Martin L, Rice D, Blackmon S, Murthy S,
Gangadharan S, Reddy R, Sarkaria I. Randomized, Multi Center Phase 3
Trial of Pafolacianine during Intraoperative Molecular Imaging of
Cancer in the Lung: Results of the ELUCIDATE Trial. AATS 102nd
Annual Meeting. Boston MA. May 2022.
---------------------------------------------------------------------------
In response to CMS's questioning if the noted CYTALUX[supreg]
``decreased rate of subsequent diagnostic intervention'' refers to
``fewer resections in future surgical procedure, and/or if this also
implies a subsequent positive outcome of reduced mortality'', the
applicant stated that the ELUCIDATE trial was not designed to follow
patients long term to determine reduction in additional procedures,
oncologic outcomes, nor mortality rates. According to the applicant,
considering existing preoperative procedures commonly utilized today to
provide localization aides to surgeons, CYTALUX[supreg] has the
potential to reduce preoperative localization procedures, including
endobrochial dye marking, microcoil placement, fiducial marker
placement, and transthoracic percutaneous hook wire placement. The
applicant stated that the ELUCIDATE phase 3 trial demonstrated that,
without the use of CYTALUX, synchronous malignant lesions would have
been left behind in 8 percent of patients, confirming similar findings
from the phase 2 trial. The applicant stated that as the synchronous
lesions increased in size, they would have been identified on follow up
scans, and additional surgeries are likely to have been required to
remove these lesions increasing the risk of complications and mortality
in these patients. The applicant stated that the ability to perform a
more complete resection during the initial procedure using a targeted
imaging agent has the potential to reduce the need for future
intervention (for example, additional surgery) and the associated
morbidity risks thus addressing the goal of the surgeon and
patients.\36\
---------------------------------------------------------------------------
\36\ Mohiuddin K, Haneuse S, Sofer T, et al. Relationship
between margin distance and local recurrence among patients
undergoing wedge resection for small (<=2 cm) non-small cell lung
cancer. J Thorac Cardiovasc Surg. 2014 Apr;147(4):1169-75;
discussion 1175-7. doi: 10.1016/j.jtcvs.2013.11.056. Epub 2014 Jan
2. PMID: 24507406.
---------------------------------------------------------------------------
With regards to CMS's concerns about false positives, the applicant
stated that false positive rates for CYTALUX[supreg] do not
meaningfully alter the substantial clinical improvement analysis
presented in the application. The applicant stated that in the Phase 3
trial, the false positive rate for primary lesions in patients with
confirmed cancer was low, at 1.4 percent, demonstrating the ability of
CYTALUX[supreg] to correctly identify malignant lesions with multiple
histologies in the lung, and that in patients with suspected or
confirmed cancer in the lung, the false positive rate was 12.7 percent.
Per the applicant, the difference between 1.4 percent and the 12.7
percent accounts for situations in which the patient did not have a
confirmed diagnosis prior to surgery. Additionally, the applicant
stated that clinical trial results across 769 patients from multiple
clinical trials with CYTALUX[supreg] showed there were no drug-related
serious adverse events among participants. The applicant stated that
patients who had false positive lesions removed showed no associated
increase in respiratory or pulmonary adverse events as compared to
events occurring during standard of care resections. The applicant also
asserted that the presence of false positive results did not cause
negative patient outcomes. The applicant stated that additionally, the
false-positive results after use of CYTALUX[supreg] were comparable to
those following standard treatment without CYTALUX[supreg].
We also received several additional comments in support of the
application for CYTALUX[supreg], stating that the technology represents
a substantial clinical improvement over existing technologies. These
commenters stated that the Phase 3 trial presented in the application
for CYTALUX[supreg] highlighted key challenges in the operative
landscape namely localization of lesions, margin control and occult
synchronous lesions. Commenters stated that CYTALUX[supreg] facilitates
minimally invasive lung cancer surgery, improves the ability to detect
smaller than 1 cm tumors and otherwise undetectable lesions without
unreliable procedurally placed surrogates (for example, percutaneous
wires, dye-marking, or coils) or larger procedures to locate lesions.
Commenters asserted that CYTALUX[supreg] is easy for patients because
they just undergo intravenous safe infusion of a medication
preoperatively. Commenters asserted that CYTALUX[supreg] demonstrated a
better option to visualize occult disease compared to advanced imaging
or standard visualization techniques that fail to reveal occult lesions
during initial operative intervention. Commenters stated that
CYTALUX[supreg] allowed the discovery of synchronous adenocarcinomas
that were not identified by standard CT scan procedures, aided in
confirming the location of a metastatic renal cell carcinoma lesion in
the lung of a patient and allowed more precise detection and
localization of lesions both for primary lung cancer and metastatic
disease to the lung (pancreatic adenocarcinoma and pleomorphic
liposarcoma). Commenters stated that CYTALUX[supreg] provided surgeons
the ability to visually assess margin distance to ensure an adequate
margin was obtained in real time. A commenter asserted that
CYTALUX[supreg] allows the surgeon to see the tumor during stapler
firing to visualize the margin prior to a point that could leave an
inadequate margin or require moving to a full lobectomy procedure.
Commenters believed that CYTALUX[supreg] can transform surgical
techniques, increase operative efficiency, and decrease risk for local
recurrence or inaccurate staging. Commenters believed that
CYTALUX[supreg] offers the possibility to improve cancer surgery
outcomes by enabling surgeons to better identify primary tumors, detect
occult synchronous lesions, ensure adequate margins of resection, and
ensure resection of a related lesion that will upstage the cancer and
likely necessitate adjuvant systemic therapy. A commenter stated that
CYTALUX[supreg] will impact patient outcomes now that more sublobar
resections are occurring as a result of earlier diagnosis of lung
lesions. Another commenter encouraged CMS to assign new technology add-
on payment status for new technologies like CYTALUX[supreg] supporting
personalized medicine; stating this will remove barriers to accessing
innovative tools that advance this approach to care. Another commenter
believed that false positives are not significantly impactful, as very
little tissue is removed to determine histology, and added that as more
experience is gained with CYTALUX[supreg], surgeons will learn how to
better interpret the intraoperative imaging.
Response: We thank the applicant and other commenters for their
comments regarding the substantial clinical improvement criterion.
Based on the additional information received, we agree with the
applicant that CYTALUX[supreg] represents a substantial clinical
improvement over existing technology because CYTALUX[supreg] can
identify lung cancer that is otherwise undetectable using standard
methods, which enables more precise removal of
[[Page 58818]]
the cancer by the surgeon and affects patient management, as the
detection of synchronous lesions using CYTALUX[supreg] results in the
upstaging of patient care, enabling alterations to adjuvant treatment
plans to reflect the greater extent of disease.
After consideration of the information included in the applicant's
new technology add-on payment application, we have determined that
CYTALUX[supreg] meets the criteria for approval for new technology add-
on payment. Therefore, we are approving new technology add-on payments
for this technology for FY 2024. Cases involving the use of
CYTALUX[supreg] that are eligible for new technology add-on payments
will be identified by ICD-10-PCS codes: 8E0W0EN (Fluorescence guided
procedure of trunk region using pafolacianine, open approach), 8E0W3EN
(Fluorescence guided procedure of trunk region using pafolacianine,
percutaneous approach), 8E0W4EN (Fluorescence guided procedure of trunk
region using pafolacianine, percutaneous endoscopic approach), 8E0W7EN
(Fluorescence guided procedure of trunk region using pafolacianine, via
natural or artificial opening), or 8E0W8EN (Fluorescence guided
procedure of trunk region using pafolacianine, via natural or
artificial opening endoscopic).
In its application, the applicant estimated that the cost of
CYTALUX[supreg] is $4,250 per single-use vial (one vial is used per
patient). Under Sec. 412.88(a)(2), we limit new technology add-on
payments to the lesser of 65 percent of the average cost of the
technology, or 65 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 CYTALUX[supreg] is $2,762.50 for FY
2024.
c. EPKINLYTM (Epcoritamab-bysp) and COLUMVITM
(Glofitamab-gxbm)
Two manufacturers, Genmab US and Genentech, Inc., submitted
separate applications for new technology add-on payments for FY 2024
for EPKINLYTM (epcoritamab-bysp) and COLUMVITM
(glofitamab-gxbm), respectively. We note that we discussed both of
these technologies in the proposed rule at 88 FR 26809 and 26816 using
their generic names, epcoritamab and glofitamab, respectively, which
received FDA Marketing Authorization after the proposed rule and are
updated to EPKINLYTM (epcoritamab-bysp) and
COLUMVITM (glofitamab-gxbm), respectively in this final
rule. Both of these technologies are bispecific antibodies used for the
treatment of patients with relapsed/refractory (R/R) large B-cell
lymphoma (LBCL) after two or more prior therapies, with
COLUMVITM specifically targeting the largest subset of LBCL,
diffuse LBCL (DLBCL). The bispecific antibodies directly bind two types
of clusters of differentiation CD simultaneously, CD20 expressing B-
cells and CD3 expressing T-cells, to induce activation, proliferation
and cytotoxic activity of the T-cells against the malignant B-cells. In
the FY 2024 IPPS/LTCH PPS proposed rule we discussed these applications
as two separate technologies. After further consideration and as
discussed later in this section, we believe EPKINLYTM and
COLUMVITM are substantially similar to each other and that
it is appropriate to evaluate both technologies as one application for
new technology add-on payments under the IPPS. We refer the reader
below for a complete discussion regarding our analysis of the
substantial similarity of EPKINLYTM and
COLUMVITM.
Please refer to the online application postings for
EPKINLYTM available at https://mearis.cms.gov/public/publications/ntap/NTP221012JQM0G, and for COLUMVITM
available at https://mearis.cms.gov/public/publications/ntap/NTP221017RK2RD, for additional detail describing the technologies and
the disease treated by the technologies.
With respect to the newness criterion, the applicant for
EPKINLYTM stated that it was seeking Biologic License
Application (BLA) approval from FDA for the indication of treatment of
adult patients with R/R LBCL after two or more lines of systemic
therapy. The applicant for EPKINLYTM stated that
EPKINLYTM is intended for subcutaneous administration with
patients receiving 0.16 milligram (mg) priming and 0.87 mg intermediate
dose before the first full dose of 48 mg. This is administered weekly
in cycles one through three, every 2 weeks in cycles four through nine,
and every 4 weeks in cycles 10 and onward until disease progression.
According to the applicant, in the EPCORE NHL-1 study, all patients
were required per protocol to be hospitalized for 24 hours on the third
dose, which was the first full dose of 48 mg. According to the
applicant, the mean per patient dose, including when provided during or
related to inpatient stays across all 28 injection visits, is 44.61 mg.
The applicant subsequently received BLA approval from FDA for
EPKINLYTM on May 19, 2023, for the indication of treatment
of adult patients with relapsed or refractory diffuse large B-cell
lymphoma (DLBCL), not otherwise specified, including DLBCL arising from
indolent lymphoma, and high-grade B-cell lymphoma after two or more
lines of systemic therapy.
With regard to COLUMVITM, the applicant received BLA
approval from FDA on June 15, 2023, for the indication of treatment of
adult patients with relapsed or refractory diffuse large B-cell
lymphoma (DLBCL), not otherwise specified, including DLBCL arising from
follicular lymphoma after two or more lines of systemic therapy. The
applicant for COLUMVITM stated that COLUMVITM is
administered as an intravenous infusion through a dedicated infusion
line according to a dose step-up schedule leading to the recommended
dosage of 30 mg, after completion of pre-treatment with obinutuzumab on
cycle day 1, where each cycle is 21 days. The applicant recommends
treatment for a maximum of 12 cycles or until the disease progresses to
unmanageable toxicity. According to the applicant, the administration
of COLUMVITM will be treated as part of an inpatient stay
and reimbursed through the DRG when a patient is admitted within 72
hours of the outpatient administration to treat a condition that
results from the administration such as developing grade two or higher
cytokine release syndrome (CRS). The applicant stated that, in clinical
trials, when Grade 2, 3, or 4 CRS developed, 69 percent of the time it
occurred after a 2.5 mg dose, 27 percent of the time it developed after
a 10 mg dose, and 4 percent after a 30 mg dose. Therefore, according to
the applicant, the expected average dose of COLUMVITM
associated with an inpatient hospital stay is ((2.5 mg * 0.69) + (10 mg
* 0.27) + (30mg * 0.04)) = 5.625 mg.
The applicant for EPKINLYTM submitted a request for a
unique ICD-10-PCS code for EPKINLYTM beginning in FY 2024
and was granted approval for the following procedure code effective
October 1, 2023: XW013S9 (Introduction of epcoritamab monoclonal
antibody into subcutaneous tissue, percutaneous approach, new
technology group 9). The applicant for COLUMVITM submitted a
request for a unique ICD-10-PCS code for COLUMVITM beginning
in FY 2024 and was granted approval for the following procedure codes
effective October 1, 2023: XW033P9 (Introduction of glofitamab
antineoplastic into peripheral vein, percutaneous approach, new
technology group 9 and XW043P9 (Introduction of glofitamab
antineoplastic into central vein, percutaneous approach, new technology
group 9). The applicants provided lists of diagnosis codes that may be
used to
[[Page 58819]]
currently identify the indication for EPKINLYTM and
COLUMVITM under the ICD-10-CM coding system. Please refer to
the online application postings for the complete list of ICD-10-CM
codes provided by each applicant.
As stated earlier and for the reasons discussed further later in
this section, we believe that EPKINLYTM and
COLUMVITM are substantially similar to each other such that
it is appropriate to analyze these two applications as one technology
for purposes of new technology add-on payments, in accordance with our
policy. We discuss the information provided by the applicants, as
summarized in the proposed rule, regarding whether EPKINLYTM
and COLUMVITM are substantially similar to existing
technologies prior to their approval by the FDA and their release onto
the U.S. market. 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 respect to the substantial similarity criteria, whether a
product uses the same or a similar mechanism of action to achieve a
therapeutic outcome, the applicant for EPKINLYTM asserted
that the mechanism of action of EPKINLYTM is not the same as
or similar to an existing technology. The applicant described
EPKINLYTM as an anti-CD3xCD20 bispecific antibody with a
unique mechanism of action that will be the first of its kind for the
treatment of R/R LBCL. The following table summarizes the applicant's
assertions regarding the substantial similarity criteria. Please see
the online application posting for EPKINLYTM for the
applicant's complete statements in support of its assertion that
EPKINLYTM is not substantially similar to other currently
available technologies.
BILLING CODE 4120-01-P
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[[Page 58820]]
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[[Page 58821]]
[GRAPHIC] [TIFF OMITTED] TR28AU23.148
The applicant for COLUMVITM asserted that
COLUMVITM offers a novel mechanism of action for the
treatment of R/R DLBCL with two or more prior lines of therapy patients
and is not substantially similar to other currently available
technologies because the mechanism of action of COLUMVITM is
distinct from other available DLBCL therapies because
COLUMVITM does not treat the same or similar type of disease
or patient population, and that therefore, the technology meets the
newness criterion. The applicant's assertions regarding substantial
similarity are summarized briefly in the following table. Please see
the online application posting for COLUMVITM for the
applicant's complete statements in support of its assertion that
COLUMVITM is not substantially similar to other currently
available technologies.
[GRAPHIC] [TIFF OMITTED] TR28AU23.149
[[Page 58822]]
[GRAPHIC] [TIFF OMITTED] TR28AU23.150
BILLING CODE 4120-01-C
In the FY 2024 IPPS/LTCH PPS proposed rule (88 FR 26811 and 88 FR
26817), we noted that EPKINLYTM and COLUMVITM may
have a similar mechanism of action, for the treatment of adult patients
with R/R LBCL/DLBCL after three or more prior lines of therapy. We
noted that COLUMVITM's mechanism of action is described as
bivalent binding of CD20 on malignant B-cells and CD3 on T-cells,
bringing them into close proximity inducing proliferation and targeted
killing of B-cells. According to COLUMVITM's application,
the 2:1 structure of COLUMVITM enables high-avidity,
bivalent binding to CD20 that can result in activity against malignant
B-cells even under low effector-to-target cells. Because of the
potential similarity with the mechanism of binding of the CD3xCD20
bispecific antibody and other actions, we stated our belief that the
mechanism of action for EPKINLYTM may be the same or similar
to that of COLUMVITM. While the applicant for
COLUMVITM stated that the use of COLUMVITM does
not involve treatment of the same or similar patient population when
compared to existing technology, there are existing therapies approved
for LBCL/DLBCL patients with three or more lines of therapy including
CAR-T-cell therapies and others such as POLIVY[supreg], XPOVIO[supreg],
and ZYNLONTA[supreg]. We therefore stated our belief that
COLUMVITM may treat the same or similar patient population
as these existing FDA-approved treatments.
We further stated our belief that EPKINLYTM and
COLUMVITM may treat the same or similar disease (LBCL/DLBCL)
in the same or similar patient population (R/R patients who have
previously received two or more lines of therapy), which is also the
same disease and population as existing treatments for R/R LBCL.
Accordingly, we stated that as it appears that EPKINLYTM and
COLUMVITM are purposed to achieve the same therapeutic
outcome using the same or similar mechanism of action and would be
assigned to the same MS-DRG, we believed that these technologies may be
substantially similar to each other such that they should be considered
as a single application for purposes of new technology add-on payments.
We were interested in information on how these two technologies may
differ from each other with respect to the substantial similarity
criteria and newness criterion, to inform our analysis of whether
EPKINLYTM and COLUMVITM are substantially similar
to each other and therefore should be considered as a single
application for purposes of new technology add-on payments.
We invited public comment on whether EPKINLYTM and
COLUMVITM meet the newness criterion, including whether
EPKINLYTM and COLUMVITM are substantially similar
to each other and therefore should be evaluated as a single technology
for purposes of new technology add-on payments.
Comment: The applicant for EPKINLYTM submitted a letter
maintaining that EPKINLYTM meets the newness criterion. The
applicant stated that EPKINLYTM is an IgG1-bispecific
antibody created using Genmab's proprietary DuoBody[supreg] technology
platform and is administered subcutaneously, designed to simultaneously
bind to CD3 on T-cells and CD20 on B-cells to induce T-cell mediated
killing of CD20+ B-cells. The applicant stated that the DuoBody[supreg]
platform enables controlled Fab-arm exchange to generate whole IgG1
monoclonal antibodies employing specific point mutations while
preserving the natural architecture. The applicant stated that
EPKINLYTM's mechanism of action differs from CAR T-cell
therapy as well as chemotherapy or conventional CD20-targeting
monoclonal antibodies as these
[[Page 58823]]
therapies primarily affect either cellular processes or functions of
rapidly dividing cells through interference with DNA, RNA, or protein
synthesis. We note that the applicant did not discuss whether it
believed EPKINLYTM is substantially similar to
COLUMVITM in its comment.
The applicant for COLUMVITM submitted a letter
maintaining that COLUMVITM meets the newness criterion. With
respect to whether COLUMVITM uses the same or a similar
mechanism or action when compared to an existing technology, the
applicant commented that COLUMVITM is a novel bispecific
antibody that binds to the target B-cell antigen CD20 bivalently,
eliciting a complete response in heavily pre-treated patients with R/R
DLBCL in the third line setting.
With respect to the request for comment on whether
COLUMVITM is substantially similar to EPKINLYTM
and whether these technologies should be evaluated as a single
technology for the purposes of new technology add-on payments, the
applicant for COLUMVITM, while recognizing the
COLUMVITM and EPKINLYTM have similarities, stated
that there are key distinctions between the two bispecific antibodies
and compared the two CD20 binding domains in COLUMVITM as
substantially different than a single CD20 binding domain in
EPKINLYTM. Specifically, the applicant for
COLUMVITM stated that COLUMVITM is a bispecific
antibody with a unique 2:1 configuration, which enables bivalent
binding of CD20 on B cells and monovalent binding of CD3 on T cells,
making COLUMVITM the only bivalent bispecific antibody
available for patients with R/R DLBCL, whereas EPKINLYTM
includes a 1:1 configuration with monovalent binding of CD20 and CD3, a
configuration common to other bispecific antibodies. Furthermore, the
applicant for COLUMVITM stated that COLUMVITM
elicits complete responses (CRs) faster than EPKINLYTM
(citing a median of 1.4 months to CR versus 2.7 months) and is
administered with a dosing schedule that requires fewer total treatment
visits for patients compared with EPKINLYTM. The applicant
for COLUMVITM also stated that COLUMVITM is
administered as a fixed-duration treatment, allowing patients the
benefit of time off therapy while EPKINLYTM requires
continuous administration until disease progression or intolerability.
With respect to CMS's concern regarding existing FDA-approved
therapies that are used to treat R/R DLBCL patients with 3 or more
lines of therapy including CAR T-cell therapies, POLIVY[supreg],
XPOVIO[supreg], and ZYNLONTA[supreg], the applicant stated that there
are significant limitations that render patients ineligible for or
unable to benefit from these therapies. For CAR T-cell therapy, the
applicant stated that despite promising response rates, they have
adverse effect profiles that may not be manageable for some patients
with R/R DLBCL, especially those with comorbidities and who are older.
For POLIVY[supreg], the applicant stated that limitations include
serious adverse effects, such as peripheral neuropathy (40% all grades
and 2.3% grades 3 or higher), which is reflected in the 31 percent
discontinuation rate reported in the U.S. prescribing information. For
XPOVIO[supreg], the applicant stated that XPOVIO[supreg] has shown low
responses (29% ORR and 13% CR) and high toxicity rates, including 80
percent patients that experienced any-grade gastrointestinal events
(13% grade 3 or higher). Lastly, for ZYNLONTA[supreg], the applicant
stated that challenges with ZYNLONTA[supreg] include a low CR rate in
patients (24%) and limited durability in responses (median duration of
response was 10.3 months). Additionally, the applicant stated that the
CD19-targeting MOA of ZYNLONTA[supreg] may impact how the treatment is
sequenced for patients considering CAR T-cell therapy or who have
relapsed after treatment. Lastly, the applicant stated that
ZYNLONTA[supreg] has adverse effects of edema and skin reactions
(including grade 3 or higher).
Response: We thank the applicants for their comments. After
consideration of the public comments we received, although we recognize
that there may be slight molecular differences, we believe
EPKINLYTM and COLUMVITM both fall into the same
class of IG1 bispecific antibodies and are therefore substantially
similar to one another. While COLUMVITM has bivalent binding
domains as opposed to monovalent binding domains for
EPKINLYTM, we do not believe number of domains meaningfully
differentiate the mechanism of action, as discussed in prior rulemaking
(87 FR 48924), and we instead believe that the technologies are
purposed to achieve the same therapeutic outcome using the same or
similar mechanism of action using bispecific CD20 and CD3 binding
antibodies. Further, while COLUMVITM may have a different
administration schedule, we do not believe the administration schedule
affects or substantiates a new mechanism of action. In addition, while
COLUMVITM may elicit a faster time to CR in comparison to
EPKINLYTM, we believe that these differences relate to an
assessment of whether the technologies meet the substantial clinical
improvement criterion, rather than the newness criterion. For these
reasons, while the applicant for COLUMVITM highlighted
differences between COLUMVITM and EPKINLYTM, we
are not convinced that these differences result in the use of a
different mechanism of action, therefore, we believe that the two
technologies' mechanisms of action are the same. Furthermore, we
believe that EPKINLYTM and COLUMVITM are
substantially similar to one another because the technologies are
intended to treat the same or similar disease in the same or similar
patient population--patients with R/R LBCL/DLBCL with two or more prior
lines of therapy, and that potential cases representing patients who
may be eligible for treatment would be assigned to the same MS-DRGs.
We also believe EPKINLYTM and COLUMVITM are
not substantially similar to any other existing technologies because,
as both applicants asserted in their FY 2024 new technology add-on
payment applications and in their comments that they are anti-CD3xCD20
bispecific antibodies with a unique mechanism of action that will be
the first of its kind for the treatment of R/R DLBCL after two or more
lines of prior therapy, the technologies do not use the same or similar
mechanism of action to achieve a therapeutic outcome as any other
existing drug or therapy assigned to the same or different MS-DRG.
Based on the information described in this section, we believe
EPKINLYTM and COLUMVITM meet the newness
criterion.
Based on the previous discussion, we are making one determination
regarding approval for new technology add-on payments that will apply
to both applications, and in accordance with our policy, we use the
earliest market availability date submitted as the beginning of the
newness period for both EPKINLYTM and COLUMVITM.
We believe our current policy for evaluating new technology payment
applications for two technologies that are substantially similar to
each other is consistent with the authority and criteria in section
1886(d)(5)(K) of the Act. We note that CMS is authorized by the Act to
develop criteria for the purposes of evaluating new technology add-on
payment applications. For the purposes of new technology add-on
payments, when technologies are substantially similar to each other, we
believe it is appropriate to evaluate both technologies as one
application for new
[[Page 58824]]
technology add-on payments under the IPPS, for the reasons we discussed
earlier and consistent with our evaluation of substantially similar
technologies in prior rulemaking (82 FR 38120).
With respect to the newness criterion, as previously stated,
EPKINLYTM received FDA approval on May 19, 2023, and
COLUMVITM received FDA approval on June 15, 2023. In
accordance with our policy, because these technologies are
substantially similar to each other, we use the earliest market
availability date submitted as the beginning of the newness period for
both technologies. Therefore, based on our policy, with regard to both
technologies, if the technologies are approved for new technology add-
on payments, we believe that the beginning of the newness period would
be the date on which EPKINLYTM received FDA approval, which
is May 19, 2023.
The applicants submitted separate cost and clinical data, and in
the proposed rule, we reviewed and discussed each set of data
separately. However, as stated previously, for this final rule, we will
make one determination regarding new technology add-on payments that
will apply to both applications. We believe that this is consistent
with our policy statements in the past regarding substantial similarity
(85 FR 58679).
If substantially similar technologies are submitted for review in
different (and subsequent) years, rather than the same year, we
evaluate and make a determination on the first application and apply
that same determination to the second application. However, because the
technologies have been submitted for review in the same year, and
because we believe they are substantially similar to each other, we
consider both sets of cost data and clinical data in making a
determination, and we do not believe that it is possible to choose one
set of data over another set of data in an objective manner.
As we discussed in the proposed rule and as stated previously, each
applicant submitted separate analyses regarding the cost criterion for
each of their products, and both applicants maintained that their
product meets the cost criterion. We summarize each analysis in this
section.
With respect to the cost criterion, the applicant for
EPKINLYTM provided multiple analyses to demonstrate that it
meets the cost criterion. For each analysis, the applicant searched the
FY 2021 MedPAR file using different ICD-10-CM codes to identify
potential cases representing patients who may be eligible for
EPKINLYTM. Each analysis followed the order of operations
described in the following table.
For the first analysis, the applicant searched for cases that
represent potential patients who are being treated for CRS arising from
the administration of EPKINLYTM with a diagnosis code for
DLBCL. The applicant used the inclusion/exclusion criteria described in
the following table. Under this analysis, the applicant identified 33
claims mapping to two MS-DRGs. The applicant calculated a final
inflated average case-weighted standardized charge per case of
$114,027, which exceeded the average case-weighted threshold amount of
$59,550.
For the second analysis, the applicant searched for cases reporting
diagnosis codes for CRS. The applicant used the inclusion/exclusion
criteria described in the following table. Under this analysis, the
applicant identified 101 claims mapping to three MS-DRGs. The applicant
calculated a final inflated average case-weighted standardized charge
per case of $88,482, which exceeded the average case-weighted threshold
amount of $56,682. Because the final inflated average case-weighted
standardized charge per case exceeded the average case-weighted
threshold amount in both scenarios, the applicant maintained that
EPKINLYTM meets the cost criterion.
BILLING CODE 4120-01-P
[[Page 58825]]
[GRAPHIC] [TIFF OMITTED] TR28AU23.151
With respect to the cost criterion, the COLUMVITM
applicant searched the FY 2021 MedPAR file for potential cases
representing patients who may be eligible for COLUMVITM,
defining two cohorts of patients who may be eligible for treatment and
merging the cases for the cost criterion analysis.
For the first cohort, the applicant searched for cases representing
potential patients who, as a result of developing CRS following
outpatient administration of COLUMVITM, require an inpatient
admission within the 3-day payment window following the outpatient
[[Page 58826]]
administration. Using the inclusion/exclusion criteria described in the
following table, the applicant identified 101 claims mapping to 3 MS-
DRGs.
For the second cohort, the applicant searched for cases
representing a potential subset of patients who are admitted as
inpatients for the purposes of being administered COLUMVITM
based on the clinical judgment of their provider. Using the inclusion/
exclusion criteria described in the following table, the applicant
identified 4,705 claims mapping to 9 MS-DRGs.
The applicant combined these two cohorts as there was no overlap
between the MS-DRGs of the two cohorts (see the table that follows for
a list of MS-DRGs for each cohort). The applicant followed the order of
operations described in the following table and calculated a final
inflated average case-weighted standardized charge per case of $134,690
which exceeded the average case-weighted threshold amount of $96,417.
Because the final inflated average case-weighted standardized charge
per case exceeded the average case-weighted threshold amount, the
applicant asserted that COLUMVITM meets the cost criterion.
[GRAPHIC] [TIFF OMITTED] TR28AU23.152
[[Page 58827]]
We invited public comment on whether EPKINLYTM or
COLUMVITM meet the cost criterion.
Comment: The applicant for EPKINLYTM submitted a comment
referring to the two cost analyses submitted with the application; one
scenario using DLBCL diagnosis codes for patients who are being treated
for cytokine release syndrome arising from the outpatient
administration of EPKINLYTM that would require inpatient
admission within the 3-day payment window and the other scenario of
cases reporting diagnosis codes for cytokine release syndrome. Given
the availability of the wholesale acquisition cost (WAC) of EPINKLY,
the applicant re-calculated the cost threshold analyses using the cost
of $11,463.61 ($317.20/mg * 36.14 mg) for EPKINLYTM per
patient to the hospital. The applicant reiterated that
EPKINLYTM meets the cost criterion under both scenarios
where the final inflated case weighted standardized charge per case of
$176,329 exceeds the case weighted threshold of $59,550 by $116,779 in
the first scenario and where the final inflated case weighted
standardized charge per case of $150,780 exceeds the case weighted
threshold of $56,682 by $94,103 in the second scenario.
The applicant for COLUMVITM submitted a comment
reiterating that COLUMVITM meets the cost criterion because
the final inflated average case-weighted standardized charge per case
exceeded the average case-weighted threshold amount in the cost
criterion analysis submitted in its new technology add-on payment
application.
Response: We thank the applicants for their comments. We agree that
the final inflated average case-weighted standardized charge per case
exceeded the average case-weighted threshold amount for both
technologies. Therefore, both EPKINLYTM and
COLUMVITM meet the cost criterion.
With regard to the substantial clinical improvement criterion, the
applicant asserted that EPKINLYTM represents a substantial
clinical improvement over existing technologies because it offers a
treatment option with improved efficacy and safety for R/R LBCL
patients unresponsive to currently available treatments (for example,
CAR T-cell therapies such as KYMRIAH[supreg], YESCARTA[supreg], and
Breyanzi[supreg], and non-CAR T-cell therapies such as POLIVY[supreg],
ADCETRIS[supreg], XPOVIO[supreg], and ZYNLONTA[supreg]); and it
significantly improves clinical outcomes among R/R LBCL patients as
they progress through lines of therapy. The applicant provided two
studies to support these claims, and nine background articles about
other treatments available for R/R DLBCL patients and clinical outcomes
for patients treated with other therapies such as Breyanzi[supreg],
ZYNLONTA[supreg], YESCARTA[supreg], XPOVIO[supreg], KYMRIAH[supreg],
and POLIVY[supreg].\37\ The following table summarizes the applicant's
assertions regarding the substantial clinical improvement criterion.
---------------------------------------------------------------------------
\37\ Background articles are not included in the following table
but can be accessed via the online posting for the technology.
---------------------------------------------------------------------------
[[Page 58828]]
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[[Page 58829]]
[GRAPHIC] [TIFF OMITTED] TR28AU23.154
In the FY 2024 IPPS/LTCH PPS proposed rule (88 FR 26816), after
review of the information provided by the applicant, we had the
following concerns regarding whether EPKINLYTM meets the
substantial clinical improvement criterion. With respect to whether the
technology offers a treatment option for a patient population
unresponsive to, or ineligible for, currently available treatments, the
applicant described EPKINLYTM as having stronger efficacy
data in comparison to other 3L+ treatment options available. We noted
that the applicant provided many background studies regarding R/R DLBCL
treatment options. However, they were unable to provide the complete
study of EPKINLYTM (EPCORE NHL-1) in support of its claim of
EPKINLYTM's stronger efficacy data in comparison to other
3L+ treatment options, providing only the presentation of partial
results used for the European Hematology Association meeting of 2022.
Therefore, we stated we were limited in our ability to fully evaluate
and assess the supporting evidence for this claim. Furthermore, we
noted that there may be other available treatments for this specific
population, including CAR T-cell therapies. We also noted that it is
unclear which patient population is ineligible for these available
treatment options. With respect to whether the technology improves
clinical outcomes relative to services or technologies previously
available, the applicant described EPKINLYTM as having
better safety profiles and efficacy than existing treatments. However,
the comparisons are not matched cases within a comparative study, and
we questioned whether there are differences between the trials, such as
differences in the patient populations included and the way outcomes
are defined, that should be considered in assessing the comparison of
clinical outcomes across these studies. We were interested in
additional information to demonstrate that EPKINLYTM has
significantly better efficacy and safety profiles than other available
treatments.
With regard to the substantial clinical improvement criterion, the
applicant asserted that COLUMVITM represents a substantial
clinical improvement over existing technologies because it offers a
treatment option for R/R DLBCL patients who have progressed after three
or more lines of therapy that engages T-cells in its mechanism of
action with off-the-shelf access and a fixed-treatment duration; and it
significantly improves clinical outcomes among R/R DLBCL patients with
three or more lines of therapy as compared to placebo. The applicant
provided two studies to support these claims, as well as 41 background
articles about current therapies for R/R DLBCL patients including
access and clinical outcomes for this patient population.\38\ The
following table summarizes the applicant's assertions regarding the
substantial clinical improvement. Please see the online posting for
COLUMVITM for the applicant's complete statements regarding
the substantial clinical improvement criterion and the supporting
evidence provided.
---------------------------------------------------------------------------
\38\ Background articles are not included in the following table
but can be accessed via the online posting for the technology.
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[[Page 58830]]
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[[Page 58831]]
[GRAPHIC] [TIFF OMITTED] TR28AU23.156
[[Page 58832]]
[GRAPHIC] [TIFF OMITTED] TR28AU23.157
BILLING CODE 4120-01-C
In the FY 2024 IPPS/LTCH PPS proposed rule (88 FR 26823), after
review of the information provided by the applicant, we stated we had
the following concerns regarding whether COLUMVITM meets the
substantial clinical improvement criterion. To support its assertion
that COLUMVITM offers a treatment option for a patient
population unresponsive to, or ineligible for, currently available
treatments, the applicant asserted that COLUMVITM expands
treatment options for R/R DLBCL patients who have progressed after
other 2L or 3L+ therapies. However, we noted that there are other
technologies and treatments approved for this specific population, as
mentioned earlier, such that it is not clear that this would represent
a patient population unresponsive to, or ineligible for, currently
available treatments. With respect to the applicant's claim that
COLUMVITM reduces mortality of patients who had progressed
after ASCT or CAR T-cell therapy, we noted that the applicant provided
several background studies 39 40 41 42 regarding other
existing treatments for R/R DLBCL as well as the main
COLUMVITM study, however, as this conclusion was based on
the comparison of results across these independent studies, we stated
we would be interested in additional information regarding the
comparability of these findings regarding mortality reduction for each
respective technology. With respect to the applicant's claims that
COLUMVITM is an off-the-shelf therapy without any delay due
to personalized manufacturing, such as CAR T-cell therapy, and that
COLUMVITM can be made available across various geographies
for patients with DLBCL, we questioned whether other available
therapies, such as POLIVY[supreg], XPOVIO[supreg], and
ZYNLONTA[supreg], that may be used to treat patients with multiple
relapses or who are refractory to other therapies, also would not have
those limitations.
---------------------------------------------------------------------------
\39\ Gisselbrecht C, et al. J Clin Oncol 2010; 28(27):4184-90.
\40\ Schuster SJ, et al. Lancet Oncol 2021;21:1403-15.
\41\ Abramson JS, et al. The Lancet. 2020;396(10254):839-52.
\42\ Locke FL, et al. Lancet Oncol 2019;20:31-42.
---------------------------------------------------------------------------
With respect to the applicant's claims that COLUMVITM
improves outcomes as compared to existing treatments, including safety
and rate of treatment discontinuations, we noted that only one single
arm trial with no comparators was provided in support of this claim. We
further noted that the comparisons of the supporting evidence
43 44 provided for other existing technologies to the main
COLUMVITM study are not matched cases; for example, the
studies do not adjust for type and severity of AEs. Therefore, we
questioned whether these comparisons can be used to demonstrate a
significant difference in safety or efficacy.
---------------------------------------------------------------------------
\43\ Salles G, et al. Lancet Oncol 2020;21(7):978-88.
\44\ MONJUVI[supreg] (tafasitamab) [prescribing information].
Boston, MA: Morphosys US Inc.; June 2021.
---------------------------------------------------------------------------
With respect to the applicant's claim that COLUMVITM is
a fixed-treatment duration therapy, providing patients with time off
treatment and the potential to improve patient quality of life, we
noted that this appears to be an inference, as the applicant did not
provide any evidence that a fixed-treatment improves quality of life.
According to the applicant, during the first cycle (each cycle is 21
days), the patient is required to receive the drug infusion once a
week. After cycle 1, the frequency of infusion is reduced to once a
month. While COLUMVITM provides a fixed-treatment, it
requires weekly up to monthly infusions in comparison to CAR-T cell
therapy, which is a one-time treatment. We were interested in
additional information regarding the association between treatment type
and duration and quality of life, particularly how
COLUMVITM's treatment type and duration results in higher
quality of life as compared to the treatment type and duration of
existing technologies.
We invited public comments on whether EPKINLYTM or
COLUMVITM meet the substantial clinical improvement
criterion.
Comment: The applicant for EPKINLYTM submitted a comment
regarding the substantial improvement criterion and provided responses
to concerns raised by CMS in the proposed rule. In response to CMS's
request for additional support of the claim that EPKINLYTM
has stronger efficacy in comparison to other 3L+ treatment options
available, the applicant for EPKINLYTM stated
EPKINLYTM was shown to have significantly better clinical
outcomes compared to chemoimmunotherapy in two indirect treatment
comparisons. The applicant stated that R/R DLBCL patients face
significant disease burden and poor clinical outcomes. The applicant
further stated that for patients who have failed two or more prior
lines of therapy (LOT), there is no standard of care; although
chemoimmunotherapy (CIT) regimens are commonly used, they do not
provide optimal outcomes. The applicant also stated that while direct
[[Page 58833]]
treatment comparisons have not yet been made, real world indirect
comparisons have shown that compared to chemoimmunotherapy,
EPKINLYTM offers a substantially higher chance of response
and significantly lower risks of progression and
mortality.45 46 The applicant also stated that
EPKINLYTM demonstrated clinically meaningful outcomes
compared to polatuzumab vedotin and tafasitamab plus lenalidomide in a
matched cohort comparative analysis. Furthermore, the applicant stated
that two indirect treatment comparison studies have been conducted
comparing EPKINLYTM and CAR T-cell therapy in patients with
R/R LBCL, and that in both studies, EPKINLYTM was shown to
have no statistically significant difference in efficacy compared to
CAR T-cell therapy. The applicant stated that EPKINLYTM is
an off-the-shelf therapy that may be effective for patients who cannot
easily access CAR T-cell therapy, who are ineligible for CAR T-cell
therapy, or who have progressed from CAR T-cell therapy. The applicant
indicated that access to CAR T-cell therapy is limited due to its
availability only at approximately 200 centers in specialized medical
centers to which older adults may be unable to travel to. In addition,
the applicant indicated that an estimated 35 percent to 50 percent of
patients would not be eligible for second line CAR T-cell therapy and
that this number likely increases in third and subsequent lines of
therapy.\47\ The applicant stated that in a real-world analysis of
patients who received CAR T-cell therapy, ~60 percent of patients never
respond to treatment with a median failure at only 49 days. For these
patients, who relapse or who are refractory to CAR T-cell therapy, a
standard of care has not been established.\48\ The applicant concluded
that EPKINLYTM would be effective for those patients who are
either ineligible or have progressed from CAR T-cell therapy, and that
because EPKINLY is an off-the-shelf therapy, it is not constrained by
the same individualized manufacturing timelines and associated
challenges that can delay patient starts on CAR T-cell therapy.
---------------------------------------------------------------------------
\45\ Ip, A., et al. Comparison of Real-World Clinical Outcomes
in Patients With Relapsed/Refractory Large B-cell Lymphoma Treated
With Epcoritamab vs Chemoimmunotherapy. The European Hematology
Association Abstract Library. 2023.
\46\ Ip, A., et al. Comparison of Real-World Clinical Outcomes
in Patients With Relapsed/Refractory Large B-cell Lymphoma Treated
With Epcoritamab vs Chemoimmunotherapy. The European Hematology
Association Abstract Library. 2023.
\47\ Puckrin R., et al. Real-World Eligibility for Second-Line
Chimeric Antigen Receptor T Cell Therapy in Large B Cell Lymphoma: A
Population-Based Analysis. Transplant Cell Ther. 2022
Apr;28(4):218.e1-218.
\48\ Dodero, A., et al. Patients Outcome after Chimeric Antigen
Receptor (CAR) T-Cells Failure in Aggressive B-Cell Lymphomas: Role
of Immunotherapy and Prognostic Factors. Blood 2022; 140 (Supplement
1): 9468-9469.
---------------------------------------------------------------------------
Another commenter submitted a comment in support of the approval of
the new technology add-on payment application for EPKINLYTM,
citing its efficacy in the third line setting in patients with R/R LBCL
with an overall response rate of 63.1 percent and a complete response
rate of 39 percent based on Lugano criteria and a manageable safety
profile.\49\ Furthermore, the commenter stated that despite recent
approval and expanded utilization of CAR T-cell therapy, there remains
no clear standard of care for treatment of many patients with R/R LBCL
due to issues surrounding access. The commenter stated that CAR T-cell
therapy is offered at only ~210 centers in the U.S, often concentrated
in major metropolitan areas, creating significant barriers for patients
living in remote or rural areas.\50\ The commenter further stated that
even when CAR T-cell therapy is accessible, CAR T-cell therapy poses
several challenges for patients, starting with the potentially lengthy
manufacturing process that includes pre-treatment procedures like
leukapheresis, to collect T-cells, and then genetically modifying T-
cells to express CARs, which can take up to several weeks.\51\ Lastly,
the commenter stated that approximately 40 percent of DLBCL patients
were ineligible for CAR T-cell therapy due to factors such as organ
dysfunction, active infections or prior stem cell transplantation,
while around 18-20 percent of those that were eligible underwent
leukapheresis but did not receive CAR T-cells due to disease
progression, adverse events, or clinical deterioration.52 53
The commenter concluded that, in summary, the significant challenges
associated with CAR T-cell therapy including limited access, lengthy
manufacturing processes, eligibility restrictions, and risk of
treatment failure, underscore the need for effective treatments with
comparable clinical benefits and broader patient reach.
---------------------------------------------------------------------------
\49\ Thieblemont C., et al. Epcoritamab, a Novel, Subcutaneous
CD3xCD20 Bispecific T-Cell-Engaging Antibody, in Relapsed or
Refractory Large B-Cell Lymphoma: Dose Expansion in a Phase I/II
Trial. J Clin Oncol. 2023 Apr 20;41(12):2238-2247.
\50\ Snyder S., et al. Access to Chimeric Antigen Receptor T
Cell Therapy for Diffuse Large B Cell Lymphoma. Adv Ther. 2021
Sep;38(9):4659-4674.
\51\ Bishop M., et al. Second-Line Tisagenlecleucel or Standard
Care in Aggressive B-Cell Lymphoma. N Engl J Med. 2022; 386: 629-39.
\52\ Schuster S., et al. Tisagenlecleucel in Adult Relapsed or
Refractory Diffuse Large B-Cell Lymphoma. N Engl J Med.
2019;380(1):45-5.
\53\ Jacobson C., et al. Axicabtagene Ciloleucel in the Non-
Trial Setting: Outcomes and Correlates of Response, Resistance, and
Toxicity. J Clin Oncol. 2020;38(27):3095-3106.
---------------------------------------------------------------------------
The applicant for COLUMVITM submitted comments in
response to CMS's concerns in the FY 2024 IPPS/LTCH PPS proposed rule
regarding whether COLUMVITM meets the substantial clinical
improvement criterion. The applicant reiterated its support for
COLUMVITM stating that COLUMVITM significantly
improves clinical outcomes of patients with R/R DLBCL after at least
two prior systemic therapies.
With respect to CMS's concern that the existence of other
technologies and treatments approved for the R/R DLBCL patients with
two or more lines of therapy made it unclear that this would represent
a patient population unresponsive to or ineligible for currently
available treatments, the applicant stated that COLUMVITM
expands treatment options for three key subsets of patients in the R/R/
DLBCL setting receiving and inadequately treated by existing therapies,
including: patients who are ineligible for or who cannot access ASCT or
CAR T-cell therapy, patients who have progressed after ASCT or CAR T-
cell therapy, and patients who have progressed after two or more other
lines of approved therapies. The applicant stated that
COLUMVITM is a treatment option for patients who are
ineligible for or cannot access ASCT or CAR T-cell therapy, indicating
that about half of patients with R/R DLBCL with three or more lines of
therapies are ineligible for ASCT or CAR T-cell therapies because of
treatment-related toxicities. The applicant stated that this patient
population is further vulnerable to accessing ASCT or CAR T-cell
therapy as there are limited treatment sites and manufacturing delays.
The applicant cited a retrospective study which showed that in patients
with R/R DLBCL receiving three or more lines of treatment (3L) post CAR
T-cell therapy approval, less than 20 percent of patients received CAR
T-cell therapy in 3L between October 2017 and March 2020.\54\ The
applicant further stated COLUMVITM is a new option for
patients who have progressed after ASCT or CAR T-cell therapy, stating
that about two-thirds of patients with R/R DLBCL relapse after ASCT,
and about half of patients receiving CAR T-cell therapies experience
disease
[[Page 58834]]
progression.55 56 The applicant stated that many patients in
the 3L+ setting have low response rates to available therapies, and
that tolerability of approved treatments can be poor with a range of
potential adverse events (AEs) associated with these therapies. The
applicant stated that tolerability of COLUMVITM was
demonstrated by low rates of treatment discontinuation and an overall
favorable safety profile with AEs that are more tolerable than those
associated with other treatment options in the 3L+ setting.
---------------------------------------------------------------------------
\54\ Xie, J., et al. 2021. ``Characteristics and Treatment
Patterns of Relapsed/Refractory Diffuse Large B-Cell Lymphoma in
Patients Receiving >=3 Therapy Lines in Post-CAR-T Era.'' Curr Med
Res Opin 37, no. 10 (Oct): 1789-1798.
\55\ Dickinson, M. J., et al. 2022. ``Glofitamab for Relapsed or
Refractory Diffuse Large B-Cell Lymphoma.'' N Engl J Med 387, no. 24
(Dec 15): 2220-2231.
\56\ Sehn, L. H., et al. 2021. ``Diffuse Large B-Cell
Lymphoma.'' N Engl J Med 384, no. 9 (Mar 4): 842-858.
---------------------------------------------------------------------------
With respect to CMS's concern that the applicant provided several
background studies regarding other existing treatments for R/R DLBCL as
well as the main COLUMVITM study to support the applicant's
claim that COLUMVITM reduces mortality of patients who had
progressed after ASCT or CAR T-cell therapy, the applicant for
COLUMVITM stated that while ASCT can produce long-term
remissions in about one-third of patients who undergo the procedure,
the remaining patients who experience disease progression have poor
outcomes. The applicant stated that effective treatments for patients
who progress after ASCT is an unmet need in R/R DLBCL and cited the
CORAL \57\ study where patients who relapsed after ASCT had a median
overall survival (OS) of 10 months and an estimated 1-year OS of 39
percent whereas for patients who relapse within 6 months the median OS
was 5.7 months. The applicant further stated that about half of
patients receiving CAR T-cell therapy experience disease progression
with 48 percent of patients who receive CAR T-cell therapy in 3L began
a 4L treatment within 4 months. The applicant stated there is limited
data on how patients progress after CAR T-cell therapy progression and
patient response to salvage treatment given the recent introduction of
commercial CAR T-cell therapy. The applicant indicated the outcomes
from limited data are poor and cited a recent analysis of 298 patients
who received CAR T-cells in the United Kingdom, 54 percent experienced
disease with a median of 2.4 months to progression and had a median OS
of 4.4 months.\58\ The applicant further stated that patients who went
on to additional therapies had a median OS of 8.8 months with only 22
percent achieving a CR whereas patients who did not receive further
treatment had a median OS of 1.7 months.\59\ The applicant stated that
among currently approved 3L+ options, there is either no data or a lack
of efficacy for patients after CAR T-cell therapy, indicating that in a
trial of one therapy, enrolled patients with prior ASCT and CAR T-cell
therapy 29 percent and 15 percent respectively achieved CRs.\60\ The
applicant indicated that COLUMVITM study patients with prior
ASCT and CAR T-cell therapy achieved CRs at rates of 67 percent and 35
percent respectively indicating that this is a substantial clinical
improvement for a patient population with an unmet need.
---------------------------------------------------------------------------
\57\ Van Den Neste, E., et al. 2016. ``Outcome of Patients with
Relapsed Diffuse Large B-Cell Lymphoma Who Fail Second-Line Salvage
Regimens in the International CORAL Study.'' Bone Marrow Transplant
51, no. 1 (Jan): 51-7.
\58\ Xie, J., et al. 2021. ``Characteristics and Treatment
Patterns of Relapsed/Refractory Diffuse Large B-Cell Lymphoma in
Patients Receiving >/=3 Therapy Lines in Post-CAR-T Era.'' Curr Med
Res Opin 37, no. 10 (Oct): 1789-1798.
\59\ Kuhnl, A., et al. 2021. ``Outcome of Large B-Cell Lymphoma
Patients Failing CD19 Targeted CAR T Therapy.'' ICML Oral 087.
\60\ Caimi, P. F., et al. 2021. ``Loncastuximab Tesirine in
Relapsed or Refractory Diffuse Large B-Cell Lymphoma (LOTIS-2): A
Multicentre, Open-Label, Single-Arm, Phase 2 Trial.'' The Lancet
Oncol 22, no. 6: 790-800.
---------------------------------------------------------------------------
With respect to CMS's concerns as to whether other available
therapies, such as POLIVY[supreg], XPOVIO[supreg], and
ZYNLONTA[supreg], may be used to treat patients with multiple relapses
and do not require personalized manufacturing such as CAR T-cell
therapy, the applicant for COLUMVITM stated that although
these therapies are available off the shelf, COLUMVITM is an
off-the-shelf therapy that provides a substantial clinical improvement
via efficacy, durability, and low toxicity in a heavily pretreated,
highly refractory patient population.
With respect to CMS's concerns as to whether COLUMVITM
improves outcomes as compared to existing treatments, including safety
and rate of treatment discontinuations, the applicant for
COLUMVITM stated that head-to-head data of therapies in 3L+
are not available and that while direct comparisons across different
trials are subject to confounding and bias because of systematic
differences, consideration of outcomes in clinical trials for currently
approved therapies indicate the outcomes are in line with historical
rates of response in the 3L+ setting where typically less than half of
patients respond to conventional 3L therapies and the median OS of
patients in the 3L setting is 4-10 months.61 62 63 The
applicant further stated that single-arm studies are an important
mechanism to facilitate faster access to novel therapies, particularly
for patients who have exhausted other approved options.
---------------------------------------------------------------------------
\61\ Gisselbrecht, C., et al. 2010. ``Salvage Regimens with
Autologous Transplantation for Relapsed Large B-Cell Lymphoma in the
Rituximab Era.'' J Clin Oncol 28, no. 27 (Sep 20): 4184-90.
\62\ Van Den Neste, E., et al. 2017. ``Outcomes of Diffuse Large
B-Cell Lymphoma Patients Relapsing after Autologous Stem Cell
Transplantation: An Analysis of Patients Included in the CORAL
Study.'' Bone Marrow Transplant 52, no. 2 (Feb): 216-221.
\63\ Crump, M., et al. 2017. ``Outcomes in Refractory Diffuse
Large B=Cell Lymphoma: Results from the International SCHOLAR-1
Study.'' Blood 130: 1800-1809.
---------------------------------------------------------------------------
With respect to our request for additional information regarding
the association between treatment type and the applicant for
COLUMVITM's claim that COLUMVITM is a fixed-
treatment duration therapy that provides patients with time off
treatment and the potential to improve patient quality of life, the
applicant responded that while there is no data available on this
subject in 3L+ DLBCLs yet, fixed-duration versus continuous therapy
have been studied in other therapeutic areas and a range of benefits
have been associated with fixed-duration therapies. The applicant
indicated that the time off treatment may be associated with
improvement in quality of life based on a nonrandomized study of
patients with chronic myeloid leukemia whose patient-reported outcomes
included improvement in treatment-related adverse effects when
discontinuing a tyrosine kinase inhibitor treatment.\64\ The applicant
indicated that patients prefer fixed-duration therapies to continuous
therapies citing surveys of patients with chronic lymphocytic leukemia
and Waldenstrom's macroglobulinemia identified fixed duration therapy
as a positive attribute when compared to continuous
therapy.65 66 The applicant for COLUMVITM further
stated that fixed-duration therapy can reduce costs as compared to
continuous treatment options.
---------------------------------------------------------------------------
\64\ Atallah, E., et al. 2021. ``Assessment of Outcomes after
Stopping Tyrosine Kinase Inhibitors among Patients with Chronic
Myeloid Leukemia: A Nonrandomized Clinical Trial.'' JAMA Oncol 7,
no. 1 (Jan 1): 42-50.
\65\ Ravelo, A, et al. 2022. ``Understanding Patient Preferences
for Chronic Lymphocytic Leukemia Treatments.'' Blood 140, no.
Supplement 1: 10803-10805.
\66\ Amaador, K., et al. 2023. ``Patient Preferences Regarding
Treatment Options for Waldenstrom's Macroglobulinemia: A Discrete
Choice Experiment.'' Cancer Med 12, no. 3 (Feb): 3376-3386.
---------------------------------------------------------------------------
Response: We thank the commenters for their comments regarding the
[[Page 58835]]
substantial clinical improvement criterion. Based on the additional
information received, we agree that EPKINLYTM and
COLUMVITM represent a substantial clinical improvement over
existing technologies because these technologies offer treatment
options for patients with R/R DLBCL after two or more prior therapies
who are unresponsive to, or ineligible for, currently available
treatments, who are ineligible due to factors such as organ
dysfunction, active infection, or prior stem cell transplantation, or
for whom CAR T-cell therapy is not an available treatment option.
After consideration of the public comments we received, and the
information included in both the applicants' new technology add-on
payment applications, we have determined that EPKINLYTM and
COLUMVITM meet all of the criteria for approval of new
technology add-on payments. Therefore, we are approving new technology
add-on payments for EPKINLYTM and COLUMVITM for
FY 2024. As previously stated, cases involving EPKINLYTM
that are eligible for new technology add-on payments will be identified
by ICD-10-PCS procedure code XW013S9 (Introduction of epcoritamab
monoclonal antibody into subcutaneous tissue, percutaneous approach,
new technology group 9). Cases involving COLUMVITM that are
eligible for new technology add-on payments will be identified by ICD-
10-PCS procedure code XW033P9 (Introduction of glofitamab
antineoplastic into peripheral vein, percutaneous approach, new
technology group 9) or XW043P9 (Introduction of glofitamab
antineoplastic into central vein, percutaneous approach, new technology
group 9).
Each of the applicants submitted cost information for its
application. The manufacturer of EPKINLYTM stated that the
cost of its technology is $11,463.61 per patient. The applicant
projected that 117 cases will involve the use of EPKINLYTM
in FY 2024. The manufacturer of COLUMVITM stated that the
cost of its technology is $5,748.53. The applicant projected that 40
cases will involve the use of COLUMVITM in FY 2024. Because
the technologies are substantially similar to each other, we believe
using a single cost for purposes of determining the new technology add-
on payment amount is appropriate for EPKINLYTM and
COLUMVITM even though each applicant has its own set of
codes. We also believe using a single cost provides predictability
regarding the add on payment when using EPKINLYTM or
COLUMVITM for the treatment of patients with R/R DLBCL. As
such, consistent with prior rulemaking (85 FR 58684), we believe that
the use of a weighted average of the cost of EPKINLYTM and
COLUMVITM based on the projected number of cases involving
each technology to determine the maximum new technology add-on payment
would be most appropriate. To compute the weighted cost average, we
summed the total number of projected cases for each of the applicants,
which equaled 157 cases (117 plus 40). We then divided the number of
projected cases for each of the applicants by the total number of
cases, which resulted in the following case-weighted percentages: 74.5
percent for EPKINLYTM and 25.5 percent for
COLUMVITM. We then multiplied the cost per case for the
manufacturer specific drug by the case-weighted percentage (0.745 *
$11,463.61 = $8,540.39 for EPKINLYTM and 0.255 * $5,748.53 =
$1,465.87 for COLUMVITM). This resulted in a case-weighted
average cost of $10,006.26 for the technology. Under Sec.
412.88(a)(2), we limit new technology add-on payments to the lesser of
65 percent of the average cost of the technology, or 65 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
EPKINLYTM or COLUMVITM is $6,504.07 for FY 2024.
d. LunsumioTM (Mosunetuzumab)
Genentech, Inc. submitted an application for new technology add-on
payments for LunsumioTM for FY 2024. Per the applicant,
LunsumioTM is a novel, full-length, humanized,
immunoglobulin G1 (IgG1) bispecific antibody that is designed to
concomitantly bind CD3 on T cells and CD20 on B cells, in the treatment
of adults with relapsed/refractory (R/R) follicular lymphoma (FL) who
have received at least 2 (>=2) prior systemic therapies (also referred
to herein as 3L+FL). The applicant further stated that target B cell
killing occurs only upon simultaneous binding to both targets, as it is
a conditional agonist. We note that Genentech, Inc submitted an
application for new technology add-on payments for
LunsumioTM for FY 2023 under the name mosunetuzumab, as
summarized in the FY 2023 IPPS/LTCH PPS proposed rule (87 FR 28261
through 28274), that it withdrew prior to the issuance of the FY 2023
IPPS/LTCH PPS final rule (87 FR 48920).
Please refer to the online application posting for
LunsumioTM, available at https://mearis.cms.gov/public/publications/ntap/NTP221017LJLDM, for additional detail describing the
drug and the disease treated by the technology.
With respect to the newness criterion, LunsumioTM was
granted accelerated approval of its BLA from FDA on December 22, 2022,
for the treatment of adult patients with relapsed or refractory
follicular lymphoma after two or more lines of systemic therapy.
According to the applicant, LunsumioTM was not commercially
available immediately after FDA approval. The applicant stated that
LunsumioTM was made available for sale after the new year
with the first order occurring on January 6, 2023, due to a companywide
holiday shutdown and to provide manufacturing time. We noted in the FY
2024 IPPS/LTCH PPS proposed rule (88 FR 26824), for the purposes of new
technology add-on payments, we do not consider the date of first sale
as an indicator of the entry of a product onto the U.S. market.
According to the applicant, LunsumioTM is sold in a 1 mg and
30 mg single dose vial and is administered for eight cycles according
to the dosage schedule in the following table unless patients
experience unacceptable toxicity or disease progression. Per the
applicant, most of the inpatient usage of LunsumioTM will
occur as the result of adverse events, mainly CRS, that develop after
outpatient administration of the drug. The applicant stated that
clinical protocols require that inpatient hospitalization occur for
most Grade 2 CRS patients, and for all patients with Grade 3 or 4 CRS.
In clinical trials, when Grade 2, 3, or 4 CRS developed, 75 percent of
the time it occurred after a 60 mg dose, 20 percent of the time it
developed after a 1 mg dose, and 5 percent after a 2 mg dose. Based on
this information, it seems that the weighted average inpatient dose
would be 45.3 mg.
BILLING CODE 4120-01-P
[[Page 58836]]
[GRAPHIC] [TIFF OMITTED] TR28AU23.158
According to the applicant, effective October 1, 2022, the
following ICD-10-PCS procedure codes may be used to distinctly identify
administration of LunsumioTM: XW03358 (Introduction of
mosunetuzumab antineoplastic into peripheral vein, percutaneous
approach, new technology group 8) or XW04358 (Introduction of
mosunetuzumab antineoplastic into central vein, percutaneous approach,
new technology group 8). The applicant stated that diagnosis code C82
(Follicular lymphoma) may be used to currently identify the indication
for LunsumioTM under the ICD-10-CM coding system.
As previously discussed, if a technology meets all three of the
substantial similarity criteria under the newness criterion, it would
be considered substantially similar to an existing technology and would
not be considered ``new'' for the purpose of new technology add-on
payments.
With respect to the substantial similarity criteria, the applicant
asserted that LunsumioTM is not substantially similar to
other currently available technologies because it does not use the same
or a similar mechanism of action compared to any existing technology
approved for treatment of 3L+ FL and because the use of
LunsumioTM in 3L+ FL does not involve the treatment of the
same or a similar type of disease or the same or similar patient
population when compared to an existing technology. The following table
summarizes the applicant's assertions regarding the substantial
similarity criteria. Please see the online application posting for
LunsumioTM for the applicant's complete statements in
support of its assertion that LunsumioTM is not
substantially similar to other currently available technologies.
[[Page 58837]]
[GRAPHIC] [TIFF OMITTED] TR28AU23.159
In the FY 2024 IPPS/LTCH PPS proposed rule (88 FR 26825), we stated
that while the applicant indicated that the technology does not involve
the treatment of the same or similar patient population as compared to
existing technology, we noted that FL in 3L+ settings is not a new
population because there are FDA approved therapies indicated in the
treatment of patients with r/r FL after two or more lines of systemic
therapy. We stated our belief that LunsumioTM would be used
for the same disease and patient population when compared to other
therapies approved to treat FL in 3L+ settings.
We invited public comments on whether LunsumioTM is
substantially similar to existing technologies and whether
LunsumioTM meets the newness criterion.
[[Page 58838]]
Comment: The applicant submitted a public comment regarding the
newness criterion. In response to CMS's questions related to newness,
the applicant stated that although several treatment regimens have been
developed and approved for R/R FL in the U.S., there are no preferred
treatment options for patients in the 3L+ setting. The applicant
further stated that although currently available therapies for patients
with R/R FL who have had two or more prior therapies may be appropriate
for certain patients, substantial clinical factors impact whether a
patient can benefit from these 3L+ treatment options (for example,
copanlisib, tazemetostat, axicabtagene ciloleucel, and
tisagenlecleucel). The applicant noted these include high-risk features
such as refractoriness to prior therapy, double refractoriness to prior
alkylator and anti-CD20 monoclonal antibody therapy, POD24 of 1L
chemoimmunotherapy, FLIPI score of 3-5, or older age. The applicant
further stated that certain treatment options for patients with R/R FL
who have had two or more prior therapies have their own limitations
that may restrict the eligible patient population. The applicant used
copanlisib, tazemetosib, and CAR T-cell therapy as examples. According
to the applicant, copanlisib is associated with severe toxicities and
suboptimal responses that limit its use in patients with R/R FL who
have received 2+ prior systemic therapies. With regard to tazemetostat,
the applicant stated that it offers limited efficacy to patients with
R/R FL who have received >=2 prior systemic therapies and do not have
an EZH2 mutation. The applicant stated that while tazemetostat is still
approved for patients with wildtype EZH2, the label includes language
that tazemetostat is indicated for the treatment of ``Adult patients
with relapsed or refractory follicular lymphoma who have no
satisfactory alternative treatment options,'' and that because EZH2
mutations are found in less than 30 percent of FL cases, 70 percent of
the patients who progress after 2+ prior systemic treatments can
benefit from additional options. With regard to CAR T-cell therapy, the
applicant maintained that benefits of this treatment in patients with
R/R FL who have received 2+ prior systemic therapies are limited by
tolerability and accessibility. The applicant stated that patients aged
65 years or older make up about 35 percent of CAR T-cell recipients
(25%-41%) and may experience higher rates of CRS and neurological AEs
than patients under 65 years of age, and that unlike treatment-emergent
AEs with other therapies, CAR T cells cannot be dose-reduced or delayed
managing these AEs, nor can treatment be discontinued once
administered.
According to the applicant, additional treatment options are needed
for patients who may not be candidates for CAR T-cell therapies or who
cannot access the therapy. The applicant argued that even for patients
who are fit enough to tolerate CAR T-cell therapy toxicities, access to
treatment remains a significant barrier. The applicant noted that
twelve states currently have no available CAR T-cell therapy sites. The
applicant stated that even for those with access to a treatment center,
additional barriers limit the number of patients who can receive CAR T-
cell therapy, such as with ensuring that a manufacturing slot is
available when a patient's cells are collected (if frozen cells are not
an option), or obtaining necessary reagents.
The applicant asserted that LunsumioTM is efficacious in
patients with R/R FL who have received 2+ lines of systemic therapy.
According to the applicant, LunsumioTM is efficacious across
all subgroups, including those who are heavily pretreated and highly
refractory, and those who aged 65 years or older, and has a generally
manageable safety profile. In addition, the applicant maintained that
the tolerability of LunsumioTM compared with currently
approved 3L+ treatment options is a substantial clinical improvement.
Per the applicant, LunsumioTM is anticipated to be a
reasonable treatment option for patients who have progressed after CAR
T-cell therapy, substantially improving access to 3L+ treatment for
these patients. According to the applicant, as an off-the-shelf therapy
that does not require patient-specific manufacturing,
LunsumioTM will be widely available at hospitals and clinics
across the country, substantially improving access to treatment
compared with CAR T-cell therapies. The applicant expected that
LunsumioTM will fill an unmet need left by other approved
3L+ therapies and therefore does not treat the same or similar type of
disease in the same or similar patient population when compared with
existing technologies.
Another commenter submitted a public comment supporting the newness
of LunsumioTM in the treatment of multiply relapsed FL, as
the first approved CD20xCD3 bispecific antibody. According to the
commenter, while there are other agents approved for the treatment of
multiply relapsed FL, they have clinical limitations that significantly
constrain their utility, such as lower response rates, inferior
durability of response, treatment schedules that limit routine use, and
key toxicities. The commenter also explained that the use of CAR-T cell
therapies for FL are limited by toxicity and by access to centers of
excellence with the resources to administer such treatment. The
commenter asserted that LunsumioTM represents a critical
innovation for patients with multiply relapsed FL, offers a potent
immunotherapy appropriate for outpatient and community-based use, and
has a new and unique mechanism of action.
Response: We thank the applicant and commenter for their comments.
We disagree with the commenter and continue to believe that
LunsumioTM would be used for the same disease in a similar
patient population when compared to other therapies approved to treat
FL in 3L+ settings. We note that according to the applicant, treatment
options are available for R/R FL patients, though limitations impact
which patients can benefit from these available 3L+ treatment options.
However, we believe that these limitations relate to an assessment of
whether the technology meets the substantial clinical improvement
criterion rather than the newness criterion. As a result, we believe
that LunsumioTM treats the same or similar disease in the
same or similar patient population when compared to existing treatments
for FL in 3L+ settings. Based on our review of the comments received
and information submitted by the applicant as part of its FY 2024 new
technology add-on payment application for LunsumioTM, we
agree with the applicant that LunsumioTM has a unique
mechanism of action as a CD20xCD3 bispecific monoclonal antibody for
the treatment of 3L+ FL. Therefore, we believe that
LunsumioTM is not substantially similar to existing
treatment options and meets the newness criterion. As we have discussed
in prior rulemaking (77 FR 53348), generally, our policy is to begin
the newness period on the date of FDA approval or clearance or, if
later, the date of availability of the product on the U.S. market. The
applicant stated that LunsumioTM was FDA approved for 3L+
treatment of adult patients with R/R FL on December 22, 2022, and
became available for sale after the new year with a date of first sale
on January 6, 2023. However, it is unclear from the information
provided whether the technology would have been available for sale
prior to January 6, 2023. Nonetheless, we note that using either
[[Page 58839]]
the FDA approval date of December 22, 2022, or the date suggested by
manufacturer of January 6, 2023, LunsumioTM is still new for
FY 2024 because the 3-year anniversary date (December 22, 2025, or
January 6, 2026, respectively) would occur after FY 2024. Because we
did not receive any additional information about whether the technology
was available for sale before January 6, 2023, we therefore consider
the beginning of the newness period to commence on December 22, 2022.
With respect to the cost criterion, the applicant provided multiple
analyses to demonstrate that it meets the cost criterion. For each
analysis, the applicant searched the FY 2021 MedPAR file using
different ICD-10-CM codes to identify potential cases representing
patients who may be eligible for LunsumioTM. The applicant
explained that it used different codes to identify different cohorts
that may be eligible for the technology. Each analysis followed the
order of operations described in the following table.
For the first analysis, the applicant searched for cases reporting
ICD-10-CM diagnosis codes for follicular lymphoma without a
corresponding chemotherapy administration code. The applicant used the
inclusion/exclusion criteria described in the following table. Under
this analysis, the applicant identified 704 claims mapping to 12 MS-
DRGs. The applicant followed the order of operations described in the
following table and calculated a final inflated average case-weighted
standardized charge per case of $104,824, which exceeded the average
case-weighted threshold amount of $96,820.
For the second analysis, the applicant searched for cases reporting
ICD-10-CM diagnosis codes for follicular lymphoma excluding follicular
lymphoma grade 3B (FL3B) without a corresponding chemotherapy
administration code. The applicant used the inclusion/exclusion
criteria described in the following table. Under this analysis, the
applicant identified 687 claims mapping to 12 MS-DRGs. The applicant
followed the order of operations described in the following table and
calculated a final inflated average case-weighted standardized charge
per case of $103,171, which exceeded the average case-weighted
threshold amount of $96,578.
For the third analysis, the applicant searched for cases reporting
ICD-10-CM diagnosis codes for follicular lymphoma with accompanying
chemotherapy administration codes. The applicant used the inclusion/
exclusion criteria described in the following table. Under this
analysis, the applicant identified 844 claims mapping to 13 MS-DRGs.
The applicant followed the order of operations described in the
following table and calculated a final inflated average case-weighted
standardized charge per case of $101,992, which exceeded the average
case-weighted threshold amount of $98,198.
For the fourth analysis, the applicant searched for cases reporting
ICD-10-CM diagnosis codes for follicular lymphoma excluding FL3B with
accompanying chemotherapy administration codes. The applicant used the
inclusion/exclusion criteria described in the following table. Under
this analysis, the applicant identified 813 claims mapping to 13 MS-
DRGs. The applicant followed the order of operations described in the
following table and calculated a final inflated average case-weighted
standardized charge per case of $99,322, which exceeded the average
case-weighted threshold amount of $97,505.
[[Page 58840]]
[GRAPHIC] [TIFF OMITTED] TR28AU23.160
We invited public comments on whether LunsumioTM meets
the cost criterion.
Comment: The applicant submitted a comment that summarized the
results of the four analyses discussed in the proposed rule, and
reiterated that regardless of the criteria for selecting the cases for
the analysis, the final inflated average case-weighted standardized
charge per case exceeded the average case-weighted threshold amount.
Response: We thank the applicant for their comment. We agree that
the final inflated average case-weighted standardized charge per case
exceeded the average case-weighted threshold amount. Therefore,
LunsumioTM meets the cost criterion.
With regard to the substantial clinical improvement criterion, the
applicant asserted that LunsumioTM represents a substantial
clinical improvement over existing technologies because it will expand
access to patients for whom existing therapies are not adequate and
because it offers patients with 3L+ FL multiple substantial clinical
benefits, including high efficacy with significant tolerability; broad
efficacy across patients with 3L+; and the opportunity to achieve
sustained remission without continuous treatment. The applicant
provided 13 studies to support these claims as well as 34 background
articles. The following table summarizes the applicant's assertions
regarding the substantial clinical improvement criterion. Please see
the online posting for LunsumioTM for the applicant's
complete statements regarding the substantial clinical improvement
criterion and the supporting evidence provided.
[[Page 58841]]
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[[Page 58842]]
[GRAPHIC] [TIFF OMITTED] TR28AU23.162
[[Page 58843]]
[GRAPHIC] [TIFF OMITTED] TR28AU23.163
BILLING CODE 4120-01-C
In the FY 2024 IPPS/LTCH PPS proposed rule (88 FR 26830), after
review of the information provided by the applicant, we stated that we
had the following concerns regarding whether LunsumioTM
meets the substantial clinical improvement criterion. We noted that the
applicant provided a single-arm, phase II trial of 90 patients, sub-
study analysis, and another single-arm phase I/II trial of 15 patients
to support its claims of substantial clinical improvement. As noted in
the previous table, the studies evaluated complete response rates or
indicators of safety, but did not evaluate survival as a primary
outcome. They were also single-arm, without comparison to other
existing treatments for the patient population. The applicant compared
outcomes of the phase II trial with LunsumioTM to outcomes,
including QOL and AE from background studies of other
technologies.67 68 69 However, we noted limitations in
comparing to rates found in other clinical trials that were conducted
in earlier time periods and under different circumstances of patient
enrollment and treatment options. Additionally, the historical rates
were compared directly to those from LunsumioTM without more
detailed adjustment for patient characteristics. Without a direct
comparison of outcomes between these therapies, we were concerned as to
whether the differences in outcomes identified by the applicant
translate to clinically meaningful differences or improvements for
patients treated with LunsumioTM as compared to historical
rates for other treatments.
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\67\ Cheah, Y.C. et al. (2022), op.cit.
\68\ Morschhauser, F., H. Tilly, A. Chaidos, et al. (2020)
Tazemetostat for patients with relapsed or refractory follicular
lymphoma: an open-label, single-arm, multicenter, phase 2 trial.
Lancet Oncology. 21(11):1433-1442. doi:10.1016/S1470-2045(20)30441-
1.
\69\ Budde, L. et al. (2022), op.cit.
---------------------------------------------------------------------------
We invited public comments on whether LunsumioTM meets
the substantial clinical improvement criterion.
Comment: The applicant submitted a public comment in response to
CMS's concerns regarding substantial clinical improvement. In response
to the issue of study design, the applicant responded that there are
benefits and limitations to single-arm studies in the 3L+ FL setting.
The applicant noted that single-arm studies are an important mechanism
to facilitate faster access to novel therapies, especially for patients
who have exhausted other approved options. According to the applicant,
investigating LunsumioTM for patients in the 3L+ FL setting
is an example of using a single-arm clinical trial strategy to bring a
novel treatment to patients who have an unmet need. Other benefits of
single-arm trials are smaller sample size requirements, shorter
completion time, and the ability to identify signs of efficacy early in
drug development.70 71 At the same time, the applicant
acknowledged that single-arm studies are most appropriate for assessing
response rates and since they lack a comparator arm, time-to-event
endpoints, such as progression-free survival and overall survival, can
only be understood in the context of a historical control. The
applicant also noted that evaluation of safety outcomes is likewise
limited by a lack of a comparator arm.72 73 Nonetheless, the
applicant maintained that despite these limitations, single-arm trials
are a valuable tool for drug discovery.
---------------------------------------------------------------------------
\70\ Nierengarten, M.B. 2023. ``Single-Arm Trials for US Food
and Drug Administration Cancer Drug Approvals.'' Cancer 129, no. 11
(Jun 1): 1626.
\71\ Agrawal, S., et al. 2023. ``Use of Single-Arm Trials for US
Food and Drug Administration Drug Approval in Oncology, 2002-2021.''
JAMA Oncol 9, no. 2 (Feb 1): 266-272.
\72\ Budde, L.E., et al. 2022. ``Safety and Efficacy of
Mosunetuzumab, a Bispecific Antibody, in Patients with Relapsed or
Refractory Follicular Lymphoma: A Single-Arm, Multicentre, Phase 2
Study.'' Lancet Oncol 23, no. 8: 1055-1065.
\73\ Salles, G.A., et al. 2022. ``Efficacy Comparison of
Tisagenlecleucel vs Usual Care in Patients with Relapsed or
Refractory Follicular Lymphoma.'' Blood Adv (Aug 16).
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With regard to the use of historical control without adjusting for
potential confounders, the applicant stated that
[[Page 58844]]
head-to-head data comparing LunsumioTM to other approved 3L+
treatments are not available. The applicant acknowledged that direct
comparisons across different trials are subject to confounding and bias
because of systematic differences including study population,
comparators, and outcomes between or among trials being compared.
Nonetheless, the applicant argued that information regarding how
pivotal studies of other therapies were carried out may still be useful
when considering clinical trial outcomes.
With regard to the absence of endpoints related to survival, the
applicant asserted that the response criteria used to assess responses
in LunsumioTM were similar to those in pivotal clinical
trials for other currently available therapies. The applicant noted
that for instance, the response rates for LunsumioTM in
patients with R/R FL who have received 2+ prior therapies were assessed
using the International Working Group Revised Response Criteria for
Malignant Lymphoma, for which a response was defined as a CR (that is,
positron emission tomography [PET]-negative response) even if a mass of
any size is persistent, and a PR was defined as a regression of
measurable disease via at least a 50 percent decrease in sum of the
product of the diameters (SPD) of up to six of the largest dominant
nodes or nodal masses and no new sites.\74\ The applicant also argued
that the response rates for copanlisib and tazemetostat in patients
with R/R indolent lymphoma and patients with mutated or wild type EZH2
R/R FL, respectively, were assessed using the same International
Working Group Revised Response Criteria for Malignant Lymphoma. The
applicant added that the response rates for axicabtagene ciloleucel in
adult patients with indolent NHL after 2+ lines of prior therapy and
tisagenlecleucel in adult patients with R/R FL after 2+ lines of prior
therapy were assessed using the 2014 Lugano classification, which
defines CR as a complete metabolic response even with a persistent
mass, and defines PR as a decrease by more than 50 percent in the SPD
of up to six representative nodes or extranodal lesions, which are
consistent with the definitions from the International Working Group
Revised Response Criteria for Malignant Lymphoma.75 76 The
applicant asserted that therefore, the criteria used to assess response
in patients with R/R FL who had 2+ prior systemic therapies across all
pivotal trials reflects a similar approach to assessing antitumor
activity for each therapeutic option.
---------------------------------------------------------------------------
\74\ Cheson, B.D., et al. 2007. ``Revised Response Criteria for
Malignant Lymphoma.'' J Clin Oncol 25, no. 5 (Feb 10): 579-86.
\75\ Cheson, B.D., et al. 2014. ``Recommendations for Initial
Evaluation, Staging, and Response Assessment of Hodgkin and Non-
Hodgkin Lymphoma: The Lugano Classification.'' J Clin Oncol 32, no.
27 (Sep 20): 3059-68.
\76\ Cheson et al., 2007, op.cit.
---------------------------------------------------------------------------
In addition, the applicant included results of an updated analysis
of the pivotal LunsumioTM study (that is, Budde et al. 2022)
in their comments. According to the applicant, the median duration of
complete response (DOCR) was not reached (median time on study was 28.6
months). The 24-month DOCR rate after first CR was 65 percent (95% CI,
39-90). Also, the applicant stated that median Physician Fee Schedule
(PFS) was not reached; 24-month PFS rate was 77 percent (95% CI, 63-
91). Per the applicant, two years after the end of fixed-duration
treatment, 67 percent of these 49 patients remained free of progressive
disease or death.\77\ The applicant maintained that these outcomes
approached the best ORRs and CRs reported with axicabtagene ciloleucel
and tisagenlecleucel (ORRs of 91% and 86% and CRs of 60% and 68%,
respectively)78 79 and were substantially better than the
best outcomes with copanlisib (ORR of 59% and CR 14%) and tazemetostat
(mutant EZH2 was 69% ORR and 12% CR; wild-type EZH2 was 34% ORR and 4%
CR).80 81 The applicant stated that in addition, at 22.8
months, the median DOR with LunsumioTM was longer than both
copanlisib (DOR: 12.2 months) and tazemetostat (mutant EZH2 DOR of 10.9
months, wild-type EZH2 was 10.9 months).82 83 84
---------------------------------------------------------------------------
\77\ Sehn, L., et al. 2023. ``Mosunetuzumab Demonstrates Durable
Responses in Patients with Relapsed and/or Refractory Follicular
Lymphoma Who Have Received >=2 Prior Therapies: Updated Analysis of
a Pivotal Phase II Study.'' EHA Annual Meeting Abstract P1078.
\78\ Kymriah (Tisagenlecleucel) [Prescribing information]. East
Hanover, NJ: Novartis Pharmaceuticals Corporation; 2022.
\79\ Yescarta (Axicabtagene Ciloleucel) [Prescribing
information]. Santa Monica, CA: Kite Pharma Inc.; 2017.
\80\ Aliqopa (Copanlisib) [Prescribing information]. Whippany,
NJ: Bayer Healthcare Pharmaceuticals In; 2017.
\81\ Tazverik (Tazemetostat) [Prescribing information].
Cambridge, MA: Epizyme, Inc.; 2020.
\82\ LunsumioTM (mosunetuzumab-axgb). 1 DNA Way South
San Francisco, CA. Genentech, Inc.; 2022.
\83\ Tazverik (Tazemetostat) [Prescribing information].
Cambridge, MA: Epizyme, Inc.; 2020.
\84\ Aliqopa (Copanlisib) [Prescribing information]. Whippany,
NJ: Bayer Healthcare Pharmaceuticals Inc.; 2017.
---------------------------------------------------------------------------
Response: We thank the applicant for their comment regarding the
substantial clinical improvement criterion. Based on the additional
information received, we agree that LunsumioTM represents a
substantial clinical improvement over existing technologies for the
treatment of patients with 3L+FL because LunsumioTM offers a
treatment option for a patient population unresponsive to, or
ineligible for, currently available treatments, in particular: R/R FL
patients who have undergone 2+ prior treatments, but cannot access any
of the four PI3K inhibitors or EZH2 inhibitor approved by FDA for 3L+
treatment of R/R FL; patients with EZH2 mutation, who are contra-
indicated for tazemetostat, an EZH2 inhibitor approved for R/R FL; and
patients who were unable to tolerate CAR T-cell therapy.
After consideration of the public comments received and the
information included in the applicant's new technology add-on payment
application, we have determined that LunsumioTM meets the
criteria for approval for new technology add-on payment. Therefore, we
are approving new technology add-on payments for this technology for FY
2024. Cases involving the use of LunsumioTM that are
eligible for new technology add-on payments will be identified by ICD-
10-PCS codes: XW03358 (Introduction of mosunetuzumab antineoplastic
into peripheral vein, percutaneous approach, new technology group 8),
or XW04358 (Introduction of mosunetuzumab antineoplastic into central
vein, percutaneous approach, new technology group 8).
Per the applicant, the WAC of LunsumioTM is $594.06 for
a 1 mg single dose vial. As stated previously, according to the
applicant, LunsumioTM is sold in a 1 mg and 30 mg single
dose vial (we note, a 30 mg single dose vial is priced at the 1 mg
single dose vial x 30 = $17,821.80). According to the applicant, most
of the inpatient usage would occur as the result of adverse events,
mainly CRS, that develop after outpatient administration of the drug,
and that in clinical trials, when Grade 2, 3, or 4 CRS developed, 75
percent of the time it occurred after a 60 mg dose, 20 percent of the
time it developed after a 1 mg dose, and 5 percent after a 2 mg dose.
Based on this information, we determined a weighted average inpatient
dose of 45.3 mg. Therefore, the average cost per patient for
LunsumioTM is $26,910.92 (45.3 mg * $594.06 per 1 mg vial).
Under Sec. 412.88(a)(2), we limit new technology add-on payments to
the lesser of 65 percent of the average cost of the technology, or 65
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
[[Page 58845]]
case involving the use of LunsumioTM is $17,492.10 for FY
2024.
e. NexoBrid\TM\ (Anacaulase-bcdb)
Vericel Corporation submitted an application for new technology
add-on payments for NexoBrid\TM\ for FY 2024. According to the
applicant, NexoBrid\TM\ is a novel, non-surgical option for eschar
removal (debridement) in adult patients with deep partial thickness
(DPT) and/or full thickness (FT) thermal burns. Per the applicant,
NexoBrid\TM\ is a botanical and biologic product for topical use
consisting of a concentrate of proteolytic enzymes enriched in
bromelain extracted from pineapple stems. We note that Vericel
Corporation submitted an application for new technology add-on payments
for NexoBrid\TM\ for FY 2022, as summarized in the FY 2022 IPPS/LTCH
PPS proposed rule (86 FR 25286 through 25291), that it withdrew prior
to the issuance of the FY 2022 IPPS/LTCH PPS final rule (86 FR 44774).
Please refer to the online application posting for NexoBrid\TM\,
available at https://mearis.cms.gov/public/publications/ntap/NTP221017WGWTP, for additional detail describing the technology and the
condition treated by the technology.
With respect to the newness criterion, according to the applicant,
NexoBrid\TM\ was granted BLA approval from FDA on December 28, 2022,
for eschar removal (debridement) in adults with DPT and/or FT thermal
burns. According to the applicant, NexoBrid\TM\ is expected to be
commercially available the end of June or beginning of July 2023 in the
U.S. market as manufacturing preparations are currently underway.
NexoBrid\TM\ is applied topically to the wound at 2-gram lyophilized
powder with 20-gram gel vehicle per 1% total body surface area (TBSA),
or 5-gram lyophilized powder with 50-gram gel vehicle per 2.5% TBSA, up
to an area of up to 15% TBSA in one application. The applicant
estimated that the average U.S. patient will receive approximately 2.8
5-gram packs of NexoBrid\TM\ per inpatient stay, based upon the average
NexoBrid\TM\-treated area of 6.28% TBSA in the DETECT clinical trial
with an expected wastage assumption of approximately 10 percent, as
well as commercial use of the technology in Europe.
The applicant stated that effective October 1, 2021, the following
ICD-10-PCS codes may be used to uniquely describe procedures involving
the use of NexoBrid\TM\: XW00X27 (Introduction of bromelain-enriched
proteolytic enzyme into skin, external approach, new technology group
7) and XW01X27 (Introduction of bromelain-enriched proteolytic enzyme
into subcutaneous tissue, external approach, new technology group 7).
As previously discussed, if a technology meets all three of the
substantial similarity criteria under the newness criterion, it would
be considered substantially similar to an existing technology and would
not be considered ``new'' for the purpose of new technology add-on
payments.
With respect to the substantial similarity criteria, the applicant
asserted that NexoBrid\TM\ is not substantially similar to other
currently available technologies because NexoBrid\TM\ has a novel
mechanism of action and is the first enzymatic technology to achieve
rapid, consistent eschar removal; the applicant further asserted that
the active ingredient in NexoBrid\TM\ has never been approved in any
application under section 505(b)(1) of the Federal Food, Drug, and
Cosmetic Act (FD&C Act) of 1938 or section 351(a) of the Public Health
Service (PHS) Act; and no existing technology under the existing burn
DRGs is similar to NexoBrid\TM\, and that therefore, the technology
meets the newness criterion. The following table summarizes the
applicant's assertions regarding the substantial similarity criteria.
Please see the online application posting for NexoBrid\TM\ for the
applicant's complete statements in support of its assertion that
NexoBrid\TM\ is not substantially similar to other currently available
technologies.
BILLING CODE 4120-01-P
[[Page 58846]]
[GRAPHIC] [TIFF OMITTED] TR28AU23.164
BILLING CODE 4120-01-C
However, we had the following concerns with regard to the newness
criterion. We noted in the FY 2024 IPPS/LTCH PPS proposed rule (88 FR
26831) that as discussed in the FY 2022 IPPS/LTCH PPS proposed rule (86
FR 25288), while the applicant discussed the differences between
NexoBrid\TM\ and collagenase-based products, we did not receive enough
information regarding the specific composition of the proteolytic
enzymes used within the NexoBrid\TM\ active pharmaceutical ingredient
and its mechanism of action. Specifically, it was unclear whether the
proteolytic enzymes act similarly to existing collagenase-based
enzymatic debridement products since the applicant claimed that
NexoBrid\TM\ debrides denatured collagen in the wound. We also noted
that the applicant asserted that NexoBrid\TM\ is not assigned to the
same MS-DRGs as existing technologies used for burns, although it
seemed that NexoBrid\TM\ would be assigned to the same burn MS-DRGs as
other enzymatic and surgical debridement technologies.
We invited public comments on whether NexoBrid\TM\ is substantially
similar to existing technologies and whether NexoBrid\TM\ meets the
newness criterion.
Comment: A commenter stated that NexoBrid\TM\ does not meet the
newness criterion because it has been commercially available in the
European Union for a decade. Additionally, the commenter noted fruit-
based enzymatic debridement products have been utilized for decades and
marketed under various trade names, including Accuzyme[supreg],
Allanzyme, Ethezyme, GladaseTM, Kovia, and Panafil. The
commenter explained that these enzymatic debridement products utilize
papain extract from papaya fruit (Carica papaya) and exhibit identical
activation catalytic mechanisms as NexoBrid\TM\'s pineapple-derived
enzymes. The commenter further explained that papain and bromelain are
fruit-derived cysteine proteases, also known as thiol proteases, with
non-specific degradation profiles and proteolytic mechanisms of action.
The commenter added that in addition to the fruit-based enzymatic
debridement products mentioned, SANTYL[supreg] Collagenase Ointment is
an enzymatic debridement product that has been commercially available
since its approval in 1965 and is utilized to treat chronic dermal
ulcers and severe burns.
Response: We thank the commenter and have taken it into
consideration in determining whether NexoBrid\TM\ meets the newness
criterion, discussed later in this section.
[[Page 58847]]
Comment: The applicant submitted a comment reiterating its
assertion that NexoBrid\TM\ has a novel mechanism of action that
satisfies the newness criterion. The applicant stated that the active
pharmaceutical ingredient in NexoBrid\TM\, anacaulase-bcbd, is a
mixture of proteolytic enzymes extracted from the stems of pineapple
plants and is composed mainly (80% to 95% weight by weight [w/w]) of
stem bromelain, ananain, jacalin-like lectin, bromelain inhibitors,
phytocystatin inhibitor, small molecule metabolites, and saccharides,
as both free monosaccharides and the N-linked glycan of stem
bromelain.\85\ The applicant further explained that bromelain is a
combination of thiol endopeptidases and other components, such as
phosphatases, glucosidases, peroxidases, cellulases, glycoproteins,
carbohydrates, and several protease inhibitors.\86\
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\85\ NexoBrid[supreg] Prescribing Information. Vericel
Corporation. Cambridge, MA. 20222. Page 9.
\86\ Pavan R, Jain S, Kumar A. Properties and therapeutic
application of bromelain: a review. Biotechnology research
international. 2012. Page 2
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In response to CMS's concern regarding NexoBrid\TM\'s mechanism of
action, the applicant stated that NexoBrid\TM\ degrades collagen by
bromelain via a combination of endopeptidases and other enzymes. The
applicant further explained that this degradation by bromelain results
in a wide range of reactions beyond hydrolysis, such as peroxidases
catalyze oxidation reactions,\87\ and acts on a group of substrates,
including gelatin, chromogenic tripeptides, and casein.\88\
Additionally, the applicant noted, in the context of eschar removal, it
has been hypothesized that the presence of multiple proteolytic enzymes
likely results in the degradation of multiple substrates contained
within the eschar in addition to denatured collagen.\89\ The applicant
stated that NexoBrid\TM\'s combination of enzymes is unique and
distinct from collagenase-based debridement agents, which are primarily
composed of collagenase derived from Clostridium histolyticum in
petrolatum USP.\90\ The applicant explained that clostridial
collagenase-based debridement agents are based on proteolysis of a
collagen substrate through hydrolysis reactions \91\ and result in
cleavage of necrotic tissue at seven specific sites along the denatured
collagen strand.\92\
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\87\ Pavan R, Jain S, Kumar A. Properties and therapeutic
application of bromelain: a review. Biotechnology research
international. 2012. Page 2.
\88\ Chakraborty AJ, Mitra S, Tallei TE, Tareq AM, Nainu F,
Cicia D, Dhama K, Emran TB, Simal-Gandara J, Capasso R. Bromelain a
Potential Bioactive Compound: A Comprehensive Overview from a
Pharmacological Perspective. Life. 2021; 11(4):317.
\89\ Singer AJ, Goradia EN, Grandfield S, Zhang N, Shah K,
McClain SA, et al. A Comparison of Topical Agents for Eschar Removal
in a Porcine Model: Bromelain-enriched vs Traditional Collagenase
Agents. Journal of Burn Care & Research. 2023;44(2):408-13. Page
408, ``The bromelain-enriched enzymatic debridement agent is derived
from the stems of pineapples and contains a mixture of other
proteolytic enzymes including at least four distinct cysteine
proteinases: ananain1, ananain2, stem bromelain, and comosain. The
presence of multiple proteolytic enzymes likely results in the
degradation of multiple substrates contained within the eschar in
addition to denatured collagen.''
\90\ SANTYL[supreg] Prescribing Information. Smith & Nephew,
Inc. Fort Worth, TX. 2016. Page 1.
\91\ Eckhard U, Sch[ouml]nauer E, Brandstetter H. Structural
Basis for Activity Regulation and Substrate Preference of
Clostridial Collagenases G, H, and T*. Journal of Biological
Chemistry. 2013; 288(28): 20184.
\92\ Shi L, Ermis R, Garcia A, Telgenhoff D, Aust D. Degradation
of human collagen isoforms by Clostridium collagenase and the
effects of degradation products on cell migration. International
Wound Journal. 2010;7(2): 94.
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The applicant also asserted that since the mechanism of action of
NexoBridTM differs significantly from collagenase-based
debridement agents, the dosage and administration, as well as resulting
clinical outcome, is also different. The applicant explained that
NexoBridTM is applied to the burn wound once (in some cases
twice, for a four-hour period) and was shown in clinical studies to
achieve complete eschar removal (>=95% eschar removal) in 93 percent of
patients, while on the other hand, collagenase-based debridement agents
are typically used daily, as a continuous application for multiple days
with varying results.
In response to CMS's concern regarding the MS-DRG assignment for
procedures in which NexoBrid\TM\ is administered, the applicant stated
that it may be appropriate for NexoBrid\TM\ administration to be
assigned to existing burn MS-DRGs (for example, 927, 928, 929, 933,
934, 935); however, the payment associated with these MS-DRGs would not
adequately account for NexoBrid\TM\'s cost.
Response: We appreciate the additional information from the
applicant and commenters with respect to whether NexoBridTM
is substantially similar to existing technologies.
As stated in the preamble of this section, a specific medical
service or technology will no longer be considered ``new'' for purposes
of new medical service or technology add-on payments after CMS has
recalibrated the MS-DRGs, based on available data, to reflect the cost
of the technology. Therefore, we disagree with the commenter that
NexoBridTM would not be considered new because it was
launched a decade ago in the European Union, as the available data to
reflect the cost of the technology would not have been available for
CMS to recalibrate the MS-DRGs for those administrations.
We also disagree with the commenter that fruit-based enzymatic
debridement products that have not received FDA marketing authorization
are appropriate existing technology comparators for evaluating whether
a new technology is substantially similar to an existing technology. As
stated in the preamble of this section, 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. We believe that technologies that receive FDA marketing
authorization have met regulatory standards that provide a reasonable
assurance of safety and efficacy. We maintain that our intent in
requiring applicants to receive FDA marketing authorization was to
exclude technologies that lack FDA marketing authorization. Therefore,
we do not believe that medical products that have not received FDA
marketing authorization are appropriate comparators for evaluating if a
new technology 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 regard to the first criterion, whether a technology uses the
same or similar mechanism of action to achieve a therapeutic outcome,
we agree with the commenter that there is an existing enzymatic
debrider, the SANTYL Collagenase Ointment, that is commercially
available for the treatment of burn and chronic wounds. We note that
the applicant asserted that NexoBridTM has a novel
composition because it contains a unique pharmaceutical ingredient
derived from pineapple and therefore has a unique combination of
proteolytic enzymes as compared to collagenase-based debridement agents
that are derived from Clostridium histolyticum. However, we note that
the composition/ingredients of a technology does not represent the
mechanism of action. Further, while the applicant asserted that
NexoBridTM degrades collagen via multiple reactions beyond
hydrolysis, while clostridial collagenase degradation is based on
hydrolysis reactions, we note that the applicant hypothesizes, but does
not demonstrate that the presence of multiple proteolytic
[[Page 58848]]
enzymes by NexoBridTM results in the degradation of multiple
substrates contained within the eschar in addition to denatured
collagen. In addition, although we recognize that NexoBridTM
has a different use case than collagenase-based debridement agents with
respect to the dosage and administration, these differences do not
result in a substantially different therapeutic mechanism of action,
and in our view, any differences in the resulting clinical outcome
relate to an assessment of whether NexoBridTM meets the
substantial clinical improvement criterion. Therefore, even though
there may be differences in composition between bromelain and
clostridial collagenase, resulting in collagen degradation through
hydrolysis and other reactions, these two technologies use a similar
mechanism of action to achieve the same therapeutic outcome: the
enzymatic degradation of collagen to debride eschar for the treatment
of burns.
In regard to the second criterion, whether a technology is assigned
to the same or a different MS-DRG, we note that the applicant
acknowledged that the use of NexoBridTM may be assigned
under the existing MS-DRGs (for example, 927, 928, 929, 933, 934, 935),
but stated the payment associated with these MS-DRGs does not
adequately account for the cost of NexoBridTM. We agree with
the applicant that NexoBridTM would be assigned to these
same burn MS-DRGs as other enzymatic and surgical debridement
technologies used in the treatment of burns. However, we believe that
inadequate payment for the technology associated with these MS-DRGs
relates to an assessment of whether NexoBridTM meets the
cost criterion, rather than an assessment of substantial similarity.
In regard to the third criterion, whether a technology treats the
same or similar type of disease and patient populations, we agree with
the applicant's assertion in its application that use of the technology
would involve the treatment of a similar type of disease and a similar
patient population when compared to existing approaches for eschar
removal.
Because NexoBridTM meets all three of the substantial
similarity criteria, we believe the NexoBridTM is
substantially similar to an existing collagenase-based debridement
agent, SANTYL Collagenase Ointment. Therefore, we consider the
beginning of the newness period for NexoBridTM to begin on
the date on which SANTYL Collagenase Ointment received FDA approval for
the treatment of burns. Since SANTYL Collagenase Ointment has been on
the U.S. market for many years, the 3-year anniversary date of its
entry onto the market occurred prior to FY 2024,\93\ and therefore,
NexoBridTM does not meet the newness criterion and is not
eligible for new technology add-on payments for FY 2024. We note that
we received public comments with regard to the cost and substantial
clinical improvement criteria for this technology, but because we have
determined that the technology does not meet the newness criterion and
therefore is not eligible for approval for new technology add-on
payments for FY 2024, we are not summarizing comments received or
making a determination on those criteria in this final rule.
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\93\ CDER Therapeutic Biologic Products, https://www.fda.gov/media/76650/download.
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f. REBYOTATM (Fecal Microbiota, Live-jslm) and
VOWSTTM (Fecal Microbiota Spores, Live-brpk)
Two manufacturers, Ferring Pharmaceuticals, Inc., an affiliate of
the manufacturer, Rebiotix Inc., and Seres Therapeutics, Inc.,
submitted separate applications for new technology add-on payments for
FY 2024 for REBYOTATM (fecal microbiota, live-jslm, referred
to as `RBX2660' in the proposed rule) and VOWSTTM (fecal
microbiota spores, live-brpk, referred to as `SER-109' in the proposed
rule), respectively. Both of these technologies are microbiota-based
treatments indicated for the reduction or prevention of recurrence of
Clostridioides difficile infection (CDI) in individuals 18 years of age
and older, following antibiotic treatment for recurrent CDI (rCDI). In
the FY 2024 IPPS/LTCH PPS proposed rule, we discussed these
applications as two separate technologies. After further consideration,
and as discussed elsewhere, we believe REBYOTATM and
VOWSTTM are substantially similar to each other and that it
is appropriate to evaluate both technologies as one application for new
technology add-on payments under the IPPS. We refer the reader
elsewhere for a complete discussion regarding our analysis of the
substantial similarly of REBYOTATM and VOWSTTM.
Please refer to the online application posting for
REBYOTATM, available at https://mearis.cms.gov/public/publications/ntap/NTP221017WUDXM, and the online application posting
for VOWSTTM, available at https://mearis.cms.gov/public/publications/ntap/NTP221016VHL8B, for additional detail describing the
technologies and the disease treated by the technologies.
With respect to the newness criterion, the applicant for
REBYOTATM received BLA approval from FDA on November 30,
2022, for the prevention of rCDI in individuals 18 years of age and
older, following antibiotic treatment for rCDI. According to the
applicant, REBYOTATM is a broad consortium microbiota-based
live biotherapeutic suspension indicated for the prevention of
recurrence of CDI in individuals 18 years of age and older, following
antibiotic treatment for rCDI. Per the applicant, REBYOTATM
is administered rectally, 24 to approximately 72 hours after the last
dose of antibiotics for CDI. The applicant stated that each 150mL dose
of REBYOTATM contains between 1x10\8\ and 5x10\10\ colony
forming units (CFU) per mL of fecal microbes including more than
1x10\5\ CFU/mL of Bacteroides and contains not greater than 5.97 grams
of PEG3350 in saline. Per the applicant, REBYOTATM first
became commercially available on January 23, 2023, as the process to
create packaging components and then start the packaging process could
not start until FDA approval was received.
The applicant for VOWSTTM stated that it received BLA
approval from FDA on April 26, 2023, for the prevention of the
recurrence of CDI in individuals 18 years of age and older following
antibacterial treatment for rCDI. The applicant stated that the dose is
four capsules taken orally once daily on an empty stomach before the
first meal of the day for 3 consecutive days. The applicant stated that
VOWSTTM is an oral microbiome therapeutic administered to
reduce CDI recurrence as part of a two-pronged treatment approach of
(1) antibiotics to kill vegetative C. diff bacteria, followed by (2)
VOWSTTM to repair the microbiome to manage CDI and prevent
its recurrence. According to the applicant, VOWSTTM is a
consortium of purified Firmicutes bacteria spores collected from
healthy stool donors. The applicant stated that engraftment of spore
producing Firmicutes bacteria is a necessary first step in microbiome
repair, as Firmicutes bacteria produce metabolites, such as secondary
bile acids, which inhibit C. diff spore germination and vegetative
growth.
The applicant for REBYOTATM stated that, effective
October 1, 2022, the following ICD-10-PCS code may be used to uniquely
describe procedures involving the use of REBYOTATM: XW0H7X8
(Introduction of broad consortium microbiota-based live biotherapeutic
suspension into lower GI, via natural or artificial opening, new tech.
group 8). The applicant for VOWSTTM submitted a request for
approval for a unique ICD-10-PCS code for VOWSTTM beginning
in FY 2024 and
[[Page 58849]]
was granted approval for the following ICD-10-PCS procedure code,
effective October 1, 2023: XW0DXN9 (Introduction of SER-109 into mouth
and pharynx, external approach, new technology group 9). Both
applicants stated that diagnosis codes A04.71 (Enterocolitis due to
Clostridium difficile, recurrent) and A04.72 (Enterocolitis due to
Clostridium difficile, not otherwise specified as recurrent) may be
used to currently identify the indication for their technologies under
the ICD-10-CM coding system.
As stated earlier and for the reasons discussed later in this
section, we believe that REBYOTATM and VOWSTTM
are substantially similar to each other such that it is appropriate to
analyze these two applications as one technology for the purposes of
new technology add-on payments, in accordance with our policy. We
discuss the information provided by the applicants, as summarized in
the FY 2024 IPPS/LTCH PPS proposed rule, regarding whether
REBYOTATM and VOWSTTM are substantially similar
to existing technologies. 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 respect to the substantial similarity criteria, whether a
product uses the same or a similar mechanism of action to achieve a
therapeutic outcome, in the FY 2024 IPPS/LTCH PPS proposed rule (88 FR
26853 through 26854), the applicant for REBYOTATM stated
that REBYOTATM is not substantially similar to other
currently available technologies to reduce rCDI because
REBYOTATM has a new mechanism of action and is approved to
treat a broader patient population than existing therapies (including
standard of care antibiotics (for example, DIFICID[supreg],
FIRVANQ[supreg]), Fecal Microbiota Transplantation (FMT), and
ZINPLAVATM), and that therefore, the technology meets the
newness criterion. The following table summarizes the applicant's
assertions regarding the substantial similarity criteria. Please see
the online application posting for REBYOTATM for the
applicant's complete statements in support of its assertion that
REBYOTATM is not substantially similar to other currently
available technologies.
BILLING CODE 4120-01-P
[[Page 58850]]
[GRAPHIC] [TIFF OMITTED] TR28AU23.165
In the FY 2024 IPPS/LTCH PPS proposed rule (88 FR 26854), we noted
the following concern with regard to the newness criterion for
REBYOTA\TM\. We noted that the applicant stated that
ZINPLAVATM is restricted to high-risk patients, and we
questioned whether these high-risk patients were the same or a similar
patient population as that treated with REBYOTATM, which is
indicated for patients who have already had at least one recurrence of
rCDI. In addition, we noted that the indication for
ZINPLAVATM does not exclude patients with a history of CHF
and the labeling has no listed contraindications. Therefore, we sought
clarification from the applicant regarding the differences in patient
populations for ZINPLAVATM and REBYOTATM.
In the FY 2024 IPPS/LTCH PPS proposed rule (88 FR 26874 through
26875), according to the applicant for VOWSTTM,
VOWSTTM is not substantially similar to other currently
available technologies because VOWSTTM does not have the
same or a similar mechanism of action as any currently FDA-approved CDI
treatment and does not involve treatment of the same or similar type of
disease or patient population as there are currently no approved
therapies indicated to repair a disrupted microbiome as a treatment
intervention to prevent recurrence in patients with rCDI. Therefore,
the applicant asserted that VOWSTTM meets the newness
criterion. The following table summarizes the applicant's assertions
regarding the substantial similarity criteria. Please see the online
application posting for
[[Page 58851]]
VOWSTTM for the applicant's complete statements in support
of its assertion that VOWSTTM is not substantially similar
to other currently available technologies.
[GRAPHIC] [TIFF OMITTED] TR28AU23.166
In the FY 2024 IPPS/LTCH PPS proposed rule (88 FR 26875 through
26876), we noted the following concern with regard to the newness
criterion for VOWST\TM\. The applicant asserted that VOWSTTM
can be administered to patients with CHF and stated that the use of
ZINPLAVA\TM\ (bezlotoxumab) should be reserved in this patient
population. We noted that the indication for ZINPLAVATM does
not exclude patients with a history of CHF
[[Page 58852]]
and the labeling has no listed contraindications. We sought
clarification from the applicant regarding the differences in patient
populations for ZINPLAVATM and VOWSTTM.
In the FY 2024 IPPS/LTCH PPS proposed rule (88 FR 26854 through
26855 and 26875 through 26876), we noted that REBYOTA\TM\ and
VOWSTTM may have similar mechanism of actions, and both are
microbiome therapeutic agents for which we received an application for
new technology add-on payments for FY 2024 to reduce the recurrence of
rCDI in adults following antibiotic treatment for rCDI, inclusive of
the first recurrence. We stated that notably, the exact mechanism of
action for each biological product was not yet known; however, both
appeared to act on the gut microbiome to suppress C.diff. and thereby
prevent rCDI. Both REBYOTA\TM\ and VOWSTTM appeared to lead
to compositional changes in the gastrointestinal microbiome that
restore the diversity of gut flora which enabled each of these
therapeutics to suppress outgrowth of C.diff. and rCDI, following
standard-of-care treatment with antibiotics for rCDI. Further, we
stated that both technologies appeared to map to the same MS-DRGs as
each other and as existing technologies, and to treat the same or
similar disease (rCDI) in the same or similar patient population
(patients who have previously received standard-of-care antibiotics for
CDI or rCDI). Accordingly, since it appeared that REBYOTA\TM\ and
VOWSTTM were purposed to achieve the same therapeutic
outcome using a similar mechanism of action and would be assigned to
the same MS-DRG, we stated we believed that these technologies may be
substantially similar to each other such that they should be considered
as a single application for purposes of new technology add-on payments.
We stated that we believe that if these technologies are
substantially similar to each other, it is appropriate to use the
earliest market availability date submitted as the beginning of the
newness period for both technologies (83 FR 41286 through 41287).
Therefore, with regard to both technologies, we believed that the
beginning of the newness period would be the date on which
REBYOTATM became commercially available, January 23, 2023.
We noted that although our policy is generally to begin the newness
period on the date of FDA approval or clearance, we may consider a
documented delay in the technology's market availability in our
determination of newness (87 FR 48977 and 77 FR 53348).
We invited public comment on whether REBYOTA\TM\ or
VOWSTTM is substantially similar to existing technologies
and whether it meets the newness criterion, including whether
REBYOTA\TM\ and VOWSTTM are substantially similar to each
other and therefore should be evaluated as a single technology for
purposes of new technology add-on payments.
Comment: The applicant for REBYOTATM submitted a comment
in response to our question as to whether REBYOTATM is
substantially similar to VOWSTTM. The applicant stated that
VOWSTTM is an oral microbiome therapeutic consisting of
gram-positive Firmicutes, and that administration of VOWSTTM
cannot begin until at least 8 hours after bowel prep and after 2 to 4
days of completing antibacterial treatment for rCDI. The applicant also
noted that administration requirements may be burdensome on both
patients and hospitals since patients must take 4 capsules daily on an
empty stomach prior to the first meal of the day for 3 consecutive
days, and that oral administration issues should be a consideration in
older patients. The applicant stated that in comparison,
REBYOTATM is a microbiota suspension that is delivered via
rectal administration, contains both gram-positive and gram-negative
bacteria, can be administered 24 to 72 hours following the last dose of
antibiotics for recurrent CDI, and does not have pretreatment
requirements. The applicant also noted that REBYOTATM
studies reported safety and efficacy in older adult (age >=65 years)
patients with comorbid conditions, such as CHF, and that therefore,
REBYOTATM is safe and effective for a broader population of
patients.
The applicant for REBYOTATM also stated that
REBYOTATM is not substantially similar to
ZINPLAVATM because it is available to a broader patient
population than those considered high risk for recurrence of CDI, as
unlike ZINPLAVATM, REBYOTATM use is not
restricted to high-risk patients and can be administered after the
first recurrence of CDI. The applicant noted the different mechanism of
action of ZINPLAVATM, which is a human monoclonal antibody
that is administered through intravenous infusion and that neutralizes
the effect of the C.diff toxin by binding to it. The applicant also
acknowledged that although the mechanism of action of
REBYOTATM has not been established, in comparison,
REBYOTATM consists of live fecal microbes, including
Bacteroidia and Clostridia classes, which in studies, results in
clinically significant changes in patients' gut microbiome associated
with restorative microbiome changes that may help resist C. diff
colonization and recurrence.
The applicant for VOWSTTM also submitted a comment
maintaining that CMS should not evaluate VOWSTTM and
REBYOTA\TM\ as a single applicant because the technologies are not
substantially similar, arguing that since the mechanism of action for
both therapies is unknown, it is not possible to state that the
mechanism for both products is the same. The applicant for
VOWSTTM argued that there is reason to believe its mechanism
of action differs from REBYOTA\TM\'s in terms of therapeutic
composition, manufacturing process, route of administration, dosage,
and storage, stating that in contrast to REBYOTA\TM\,
VOWSTTM has a low pill burden, containing ~1 percent
residual mass comprised of defined consortia of Firmicutes bacterial
spores recovered from healthy donor stool. The applicant further stated
that the manufacturing process mitigates risk of transmission of agents
of infection by including ethanolic inactivation of potential pathogens
and removal of non-spore biomass. The applicant also provided an
overview of the clinical and scientific evidence for
VOWSTTM, noting differences in effectiveness, safety, and
patient care in contrast to REBYOTATM.
The applicant for VOWSTTM also stated that
VOWSTTM is not substantially similar to
ZINPLAVATM because the FDA labeling for VOWSTTM
does not include a warning or precaution for heart failure, nor a
contraindication for any patient population; and that in contrast, the
FDA-approved labeling for ZINPLAVATM concludes that, in
patients with a history of CHF, ZINPLAVATM ``should be
reserved for use when the benefit outweighs the risk.''
Response: We appreciate the additional information from both
applicants with respect to whether their products are substantially
similar to one another or to existing technologies. After consideration
of the public comments we received, although we recognize that the
exact mechanism of action for each technology is not fully defined, and
that the technologies may not be completely the same in terms of their
manufacturing process, route of administration, dosage, and storage, we
are not convinced that these differences result in a substantially
different therapeutic mechanism of action. Both applicants provide
sufficient data to
[[Page 58853]]
suggest that their mechanisms of action relate to repopulation of the
gastrointestinal microbiome. We believe that differences in the
clinical and scientific evidence on effectiveness, safety,
tolerability, and patient care between REBYOTATM and
VOWSTTM relate to an assessment of whether the technologies
meet the substantial clinical improvement criterion rather than the
newness criterion.
With regard to the commenters noting differences in therapeutic
composition, as both technologies are derived from donor human stool,
where REBYOTATM contains both gram-positive and gram-
negative bacteria including Bacteroidia and Clostridia classes, and
VOWSTTM consists of a defined consortia of gram-positive
Firmicutes bacteria, we also believe that there is, in fact, an
overlap, and that the Firmicutes contained in VOWSTTM would
also exist in the broad consortium of microorganisms contained in the
REBYOTATM suspension. Although there might be slight
differences in their proportional contributions to specific downstream
molecular pathways, we believe that these two technologies achieve the
same therapeutic outcome and overall clinical mechanism of action, as
each restores the gut microbiome and resolves dysbiosis to prevent the
recurrence of CDI in patients following antibacterial treatment for
rCDI by restoring the diversity and composition to one that resembles a
healthy microbiome. Furthermore, we believe REBYOTA\TM\ and
VOWSTTM are substantially similar to one another because the
technologies are intended to treat the same or similar disease in the
same or similar patient population--indicated for individuals 18 years
of age and older, for the prevention of recurrence of CDI, following
antibiotic treatment for rCDI, and that potential cases representing
patients who may be eligible for treatment would be assigned to the
same MS-DRGs.
We also believe REBYOTA\TM\ and VOWSTTM are not
substantially similar to any other existing technologies because, as
both applicants asserted in their FY 2024 new technology add-on payment
applications and in their comments, the technologies do not use the
same or similar mechanism of action to achieve a therapeutic outcome as
any other existing drug or therapy assigned to the same or different
MS-DRG. Based on the information described in this section, we believe
REBYOTA\TM\ and VOWSTTM meet the newness criterion.
Based on the previous discussion, we are making one determination
regarding approval for new technology add-on payments that will apply
to both applications, and in accordance with our policy, we use the
earliest market availability date submitted as the beginning of the
newness period for both REBYOTA\TM\ and VOWSTTM.
We believe our current policy for evaluating new technology payment
applications for two technologies that are substantially similar to
each other is consistent with the authority and criteria in section
1886(d)(5)(K) of the Act. We note that CMS is authorized by the Act to
develop criteria for the purposes of evaluating new technology add-on
payment applications. For the purposes of new technology add-on
payments, when technologies are substantially similar to each other, we
believe it is appropriate to evaluate both technologies as one
application for new technology add-on payments under the IPPS, for the
reasons we discussed previously and consistent with our evaluation of
substantially similar technologies in prior rulemaking (85 FR 58679 and
82 FR 38120).
With respect to the newness criterion, as previously stated,
REBYOTA\TM\ received BLA approval from FDA on November 30, 2022, and
became commercially available on January 23, 2023. VOWSTTM
received BLA approval from FDA on April 26, 2023. In accordance with
our policy, because these technologies are substantially similar to
each other, we use the earliest market availability date submitted as
the beginning of the newness period for both technologies. Therefore,
with regard to both technologies, we believe that the beginning of the
newness period would be the date on which REBYOTATM became
commercially available: January 23, 2023. We note that although our
policy is generally to begin the newness period on the date of FDA
approval or clearance, we may consider a documented delay in the
technology's market availability in our determination of newness (87 FR
48977 and 77 FR 53348).
The applicants submitted separate cost and clinical data, and in
the proposed rule, we reviewed and discussed each set of data
separately. However, as stated previously, for this final rule, we will
make one determination regarding new technology add-on payments that
will apply to both applications. We believe that this is consistent
with our policy statements in the past regarding substantial similarity
(85 FR 58679).
If substantially similar technologies are submitted for review in
different (and subsequent) years, rather than the same year, we
evaluate and make a determination on the first application and apply
that same determination to the second applicatio