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CMS releases 2009 IPPS final rule

By Brian Murphy, CPC and Andrea Kraynak, CPC-A, for HCPro, Inc., August 1, 2008

CMS released its inpatient prospective payment system (IPPS) final rule for fiscal year (FY) 2009 on July 31, updating Medicare payments to hospitals and providing added incentives for hospitals to improve their quality of care.

The final IPPS rule updates payment policies and rates of the 3,500 hospitals paid under Medicare's diagnosis related group (DRG) payment system. The finalized changes also aim to "promote the Administration's goal of transforming Medicare to a prudent purchaser of health care services, paying for quality of services, not just quantity," according to a July 31 CMS press release. It is estimated that the changes will increase Medicare payments to acute care hospitals by almost $4.75 billion.

New hospital acquired conditions
CMS finalized three new hospital acquired conditions (HAC), effective October 1. In addition to the current list of eight HACs, CMS has determined the following three conditions to be reasonably preventable through proper care:

  • Surgical site infections following certain elective procedures, including certain orthopedic surgeries, and bariatric surgery for obesity
  • Certain manifestations of poor control of blood sugar levels, primarily diabetic hyperosmolarity, ketoacidosis, and hypoglycemia coma
  • Deep vein thrombosis or pulmonary embolism following total knee replacement and hip replacement procedures

By adopting these HACs CMS has shown it listened to public opinion in regards to the proposed conditions, and looked closely at which conditions would be reasonably preventable and evidence-based, says DeAnne W. Bloomquist, RHIT, CCS, a coding and compliance consultant and the president of Mid-Continent Coding, Inc., in Overland Park, KS.

As of October 1, a case will group to a lower weighted MS-DRG and Medicare will no longer pay the additional cost of the hospitalization if the following are true:

  • The HAC is not present on admission (POA) but is acquired during the hospital stay (POA indicator of "N") or if there is insufficient documentation to support that the condition was POA (POA indicator of "U")
  • The HAC is the only complication/comorbidity (CC) or major CC (MCC)

"Now is a good time for coders to insure their clinical familiarity with the conditions included in the expanded list of conditions and be able to understand and recognize the clinical signs and symptoms of some of these conditions," says Glenn Krauss, BBA, RHIA, CCS, CCS-P, CPUR, FCS, PCS, C-CDIS, a senior coding and chargemaster consultant for Quorum Health Resources in Brentwood, TN. "This heightened clinical awareness will best serve the coder because he or she will be able to recognize when clinical documentation is deficient and properly craft a physician query."

The 2009 IPPS final rule also contains several charts listing the codes that describe preventable HACs. For example, effective October 1, CMS adopted as final the new higher specificity ICD-9-CM codes used to identify pressure ulcer stages III and IV (MCCs) as HACs:

Pressure ulcers: ICD-9-CM codes code descriptor

  • 707.23 Pressure ulcer, stage III
  • 707.24 Pressure ulcer, stage IV

CMS also provided the following example of how reporting a Stage III pressure ulcer as a secondary diagnosis as POA vs. not POA can impact payment:

Example 1
Principal diagnosis

  • Intracranial hemorrhage or cerebral infarction (stroke) with MCC: MS-DRG 064

Secondary diagnosis

  • Stage III pressure ulcer (code 707.23 (MCC), POA: Y Final payment: $8,030.28

Example 2

Principal diagnosis

  • Intracranial hemorrhage or cerebral infarction (stroke) with MCC: MS-DRG 064

Secondary diagnosis

  • Stage III pressure ulcer (code 707.23 (MCC), POA: Final payment: $5,347.98

It's noteworthy that only Stage III and IV pressure ulcers will count as MCCs, says Robert Gold, MD, CEO of DCBA in Atlanta, GA. Proper documentation of the staging of ulcers is therefore of critical importance.

James Kennedy, MD, CCS, director of FTI Healthcare in Atlanta, GA agrees that providers must ensure physicians document the presence of Stage III and IV pressure ulcers. "A physician or other qualified provider must document these—it cannot be a wound care nurse or a floor nurse," he says. "The physician also must designate whether it was present on admission."

Kennedy emphasizes that the final rule referenced significant revisions affecting the coding of POA status in the 2009 ICD-9-CM Official Guidelines for Coding and Reporting that are forthcoming but are currently not posted on the CDC's Web site. One area for revision cited is the issue of timeframe for POA identification and documentation of infections and organisms.

In addition, CMS has decided to finalize its proposed policy not to pay for HACs with the POA U indicator (insufficient documentation), because it believes this approach will encourage complete documentation, which will result in more accurate public health data. CMS recognizes that there are certain circumstances that dictate payment for conditions marked with a U. These include death, elopement (leaving against medical advice), and transfers. CMS will monitor the extent and circumstances surrounding the use of the POA U indicator and may propose the use of the patient discharge status codes to recognize these exceptions in the future.

Changes to MS-DRG descriptions
CMS finalized its proposed change to subdivide MS-DRG 245 (AICD lead and generator procedures) into the following MS-DRGs:

  • MS-DRG 245 (AICD generator procedures): to include procedure codes 37.96, 37.98, and 00.54
  • MS-DRG 265 (AICD lead procedures): to include procedure codes 37.95, 37.97, and 00.52

CMS also finalized changes to the descriptions for MS-DRGs 870, 871, and 872 to incorporate "severe sepsis". Its new descriptions read as follows:

  • MS-DRG 870 (Septicemia or Severe Sepsis with Mechanical Ventilation 96+ Hours)
  • MS-DRG 871 (Septicemia or Severe Sepsis without Mechanical Ventilation 96+ Hours with MCC)
  • MS-DRG 872 (Septicemia or Severe Sepsis without Mechanical Ventilation 96+ Hours without MCC)

CMS also assigned code 37.52 (now titled "Implantation of total internal biventricular heart replacement system") from MS-DRG 215 to MS-DRGs 001 and 002 and removed 37.52 from the "Non-Covered Procedure" edit and assigned it to the "Limited Coverage" edit. It also revised the surgical hierarchy for MDC 5 (Diseases and Disorders of the Circulatory System) by reordering MS-DRG 245 (AICD Generator Procedures) above new MS-DRG 265 (AICD Lead Procedures).

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