CMS proposed rule could significantly expand quality measures

Lisa Eramo, for Briefings on Coding Compliance Strategies, April 15, 2008

CMS released its IPPS proposed rule for fiscal year (FY) 2009, and although hospitals will see few changes to Medicare Severity DRG (MS-DRG) refinements and complication/comorbidity (CC) and major CC (MCC) designations, they will see significant expansions to quality measures and hospital-acquired conditions (HAC).

"They didn’t come up with a bunch of big surprises, so that’s what we have to be grateful for,” says DeAnne W. Bloomquist, RHIT, CCS, president and chief consultant for Mid-Continent Coding, Inc. in Overland Park, KS.

CMS proposes to add nine conditions to the list of HAC
Perhaps the greatest change pertains to quality initiatives and HAC. CMS launched its HAC initiative in October 2007. This initiative comes in the wake of Centers for Disease Control and Prevention data that estimated that HAC infections added nearly $5 billion to hospital costs. At the same time, a 2007 survey by the Leapfrog Group found that of 1,200 hospitals, 87% did not follow recommendations to prevent many of the most common HAC.

For FY 2009, CMS proposes to expand the current list of eight HAC to 17 and include the following nine additional conditions (CMS will not yield a higher-paying DRG when the patient acquires one of these conditions during the inpatient stay):

  • Surgical site infections following certain elective procedures
  • Legionnaires’ disease
  • Extreme blood sugar derangement
  • Iatrogenic pneumothorax
  • Delirium
  • Ventilator-associated pneumonia
  • Deep vein thrombosis/Pulmonary embolism
  • Staphylococcus aureus associated disease
  • Clostridium difficile associated disease

Although most of these conditions seem reasonable, several of them are questionable, says James S. Kennedy, MD, CCS, of FTI Healthcare in Brentwood, TN. For example, patients can acquire Legionnaires’ disease both in and out of the hospital setting, particularly through air conditioning units that contain waterborne pathogens. Although there have been definite cases in which patients have contracted the disease from hospital air conditioning units, determining how providers will ascertain whether the condition was present on admission (POA) remains unclear, he says.

Two other conditions, clostridium difficile colitis and delirium, often result from adverse effects from medication. Some patients can experience delirium from just being in the hospital for expanded periods of time (often referred to as sundowning), Bloomquist says. “This may have nothing to do with the hospital. To call it a HAC, there may have been no adverse effect. I’m not sure that it’s fair to say that,” she adds.

CMS won’t reimburse for U indicator
Since POA indicators came on the scene last October, providers have wondered how CMS will treat the “U” indicator (documentation insufficient) and whether it will not yield a higher DRG when it is the only CC or MCC on the claim. CMS has stated that it will treat the U the same as the N (not POA), but with several exceptions. CMS states the following:

Although we are proposing not paying the CC/MCC MS-DRG for HACs coded with the “U” indicator, we do recognize there may be some exceptional circumstances under which payment might be made. Death, elopement (leaving against medical advice), and transfers out of a hospital may preclude making an informed determination of whether an HAC was present on admission.

This should come as no surprise, Bloomquist says. “I think that people should figure it out regardless. You should have the data in the record—not just for HAC, but for all POA conditions,” she says.

Quality measures could expand to 73 total
CMS also proposes to add 43 new quality measures to the existing 30 for FY 2009, bringing the total number of measures to 73. Reporting all of these measures qualifies hospitals to receive a full update to their FY 2009 payment rates. The new measures include the following:

  • Surgical Care Improvement Project (one new measure)
  • Hospital readmissions (three new measures)
  • Nursing care (four new measures)
  • Patient safety indicators developed by the Agency for Healthcare Research and Quality (AHRQ) (five new measures)
  • Inpatient quality indicators developed by AHRQ (four new measures)
  • Venous thromboembolism (six new measures)
  • Stroke measures (five new measures)
  • Cardiac surgery measures (15 new measures)

These added measures could equal disaster for smaller hospitals in particular, Bloomquist says. “Your small hospitals will be under a huge administrative burden. There’s one person who does this. How will they do their data reporting? Bigger hospitals may be in the position of hiring additional staff to report on these measures,” she adds.

According to the Deficit Reduction Act of 2005, hospitals that have successfully reported the quality measures in FY 2008 will receive the full update in FY 2009. Hospitals that don’t successfully report these measures will receive an update of 1% which is two percentage points less than the full update.

Of note is the fact that CMS is requiring hospitals to report measures related to readmissions, Kennedy says. “Hospitals are under financial pressure to discharge patients more quickly. But physicians want to keep patients longer to make sure that they’re safe. The fact that the readmission rate is a core measure means that hospitals are stuck,” he says.

According to CMS, 18% of Medicare patients are readmitted to the hospital within 30 days of discharge, costing CMS $15 billion annually. Medicare Payment Advisory Commission (MedPAC) data indicates that $12 billion of these costs are potentially preventable.

Hospitals will see few changes to MS-DRG descriptions
CMS proposes two changes to MS-DRG descriptions for MS-DRGs 245, 870, 871, and 872. It proposes to subdivide MS-DRG 245 (AICD lead and generator procedures) to create a new MS-DRG for the implantation and replacement of the AICD leads from the implantation and replacement of AICD pulse generators:

  • 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

“This is because of the hardware,” says Kennedy. “There are significant costs differences between the leads and the generators. Hospitals are struggling to be profitable with AICDs. People will say that hospitals are still going to lose money on these, though.”

CMS proposes to insert the words “or severe sepsis” after “Septicemia” in the titles of the following MS-DRGs that were effective October 1, 2007:

  • MS-DRG 870: Septicemia with mechanical ventilation, 96+ hours
  • MS-DRG 871: Septicemia without mechanical ventilation, 96+ hours with MCC
  • MS-DRG 872: Septicemia without mechanical ventilation, 96+ hours without MCC

CMS may impose cumulative MS-DRG adjustment
Although there were only minor proposed changes to MS-DRG descriptions, one change that Kennedy says could be significant is that CMS proposes to implement a cumulative documentation and coding adjustment of -1.5%. CMS states the following on p. 691 of the proposed rule:

As required by statute, we are applying a documentation and coding adjustment of -0.9 percent to the FY 2009 IPPS national standardized amounts. The documentation and coding adjustments established in the FY 2008 IPPS final rule with comment period are cumulative. As a result, the -0.9 percent documentation and coding adjustment in FY 2009 is in addition to the -0.6 percent adjustment in FY 2008, yielding a combined effect of -1.5 percent.

Proposed rule outlines several other changes
There are also several other changes of note in the proposed rule, including the following:

  • MS-DRG relative weights will be 100% cost-based.
  • The CC/MCC structure remains relatively unchanged with the exception of changes related to proposed new ICD-9 codes, such as those for pressure sores.
  • CMS proposes to apply its post-acute transfer policy to 273 MS-DRGs. Of these, 24 MS-DRGs qualify as special pay post-acute transfer DRGs.
  • CMS proposes to implement add-on payments for four new technologies.

For a more in-depth look at these and other proposed changes, stayed tuned for the June issue of Briefings on Coding Compliance Strategies.

Editor’s note: Comments on the proposed rule will be accepted through June 13. CMS will respond to comments in a final rule that it expects to release on or before August 1. To view the rule, visit

Facebook icon
LinkedIn icon
Twitter icon