Medicare’s Proposed MS-DRGs: A Coding Perspective

© Copyright 2007 American Health Information Management Association. All rights reserved.

Medicare’s Proposed MS-DRGs:

A Coding Perspective

Audio Seminar/Webinar June 26, 2007

Practical Tools for Seminar Learning

Disclaimer

AHIMA 2007 Audio Seminar Series i

The American Health Information Management Association makes no representation or guarantee with respect to the contents herein and specifically disclaims any implied guarantee of suitability for any specific purpose. AHIMA has no liability or responsibility to any person or entity with respect to any loss or damage caused by the use of this audio seminar, including but not limited to any loss of revenue, interruption of service, loss of business, or indirect damages resulting from the use of this program. AHIMA makes no guarantee that the use of this program will prevent differences of opinion or disputes with Medicare or other third party payers as to the amount that will be paid to providers of service. CPT® five digit codes, nomenclature, and other data are copyright 2006 American Medical Association. All Rights Reserved. No fee schedules, basic units, relative values or related listings are included in CPT. The AMA assumes no liability for the data contained herein. As a provider of continuing education, the American Health Information Management Association (AHIMA) must assure balance, independence, objectivity and scientific rigor in all of its endeavors. AHIMA is solely responsible for control of program objectives and content and the selection of presenters. All speakers and planning committee members are expected to disclose to the audience: (1) any significant financial interest or other relationships with the manufacturer(s) or provider(s) of any commercial product(s) or services(s) discussed in an educational presentation; (2) any significant financial interest or other relationship with any companies providing commercial support for the activity; and (3) if the presentation will include discussion of investigational or unlabeled uses of a product. The intent of this requirement is not to prevent a speaker with commercial affiliations from presenting, but rather to provide the participants with information from which they may make their own judgments.

Faculty

AHIMA 2007 Audio Seminar Series ii

Gloryanne Bryant, BS, RHIA, CCS

Ms. Bryant has over 27 years of experience in the health information management profession. Gloryanne currently is the Corporate Director of Coding/HIM Compliance for Catholic Healthcare West (CHW), located in San Francisco, California. In this role, Gloryanne has responsibility for the coding and documentation compliance of 40 acute care facilities and a variety of other non-hospital based healthcare entities (outpatient settings) in three states. Gloryanne has the charge of developing, implementing/setting and maintaining System Wide coding policies, and creating an internal coding compliance auditing and monitoring team and process. She is also responsible for maintaining on-going continuing education to the CHW coding and charging staff, and providing specific documentation related education to physicians, case management, and other ancillary clinicians. In addition, she works closely with Senior Management and those involved with the CDM (Charge Description Master) and are a driving-force for regulatory updates and communication.

Gloryanne serves as a volunteer leader for the California Health Information Association (CHIA) as a Director to the state board and has served several national positions for AHIMA (American Health Information Management Association). Gloryanne has served as a Director and Past-Chair for the Society for Clinical Coding (SCC), and served two years on the AHIMA Compliance Task Force. As a Health Information Management Practitioner in the HIM/Coding arena, she was on the AHA Editorial Advisory Board (EAB) on ICD-9-CM for Coding Clinic for two years and completed serving a three- year term on the Council on Accreditation for AHIMA. She continues to publish articles and agrees to be interviewed for national publications like “For the Record”, “Medical Record Briefing”, “CHIA Journal”, “AHIMA Journal” and “Advance” magazines for HIM.

In June 2000, Gloryanne received the “CHIA Literary Award”, from the California Health Information Association (CHIA) for her many articles and writings related to clinical documentation improvement, compliance, data quality and coding and in 2003 she received the CHIA award for “Distinguished Member”. In August 2005, Gloryanne was appointed to the HHS CMS (Centers for Medicare and Medicaid Services) APC Advisory Panel to work on OPPS policy, coding and reimbursement issues. She was recently (11/06) appointed to the RAND Technical Expert Panel on Severity DRGs. Gloryanne is a sought-after national speaker and author on healthcare compliance, reimbursement, clinical documentation, coding regulations (ICD-9-CM and CPT) and serves as a catalyst for change and improvement in healthcare

Gail Garrett, RHIT, CCS

Gail Garrett is a RHIT and serves as the Assistant Vice President in the Regulatory Compliance Department supporting Coding Compliance for a large healthcare organization. Her staff responsibilities include company-wide program development and application in the areas of coding compliance for hospitals, ambulatory surgery centers, imaging centers, and physician practices.

Gail is an active volunteer for AHIMA and is currently the Co-Chair of AHIMA’s Clinical Terminology/ Classification Practice. She has authored a practice brief and presented a seminar on the UB-04 and is active in many areas

Table of Contents

AHIMA 2007 Audio Seminar Series

Disclaimer ..................................................................................................................... i Faculty .........................................................................................................................ii Agenda ................................................................................................................... 1 Proposed IPPS ............................................................................................................... 2 Medicare Severity Diagnosis Related Group ...................................................................... 3

Examples.............................................................................................................. 5 Polling Question #1............................................................................................... 8

Complication/Comorbidity List ......................................................................................... 8 Examples.............................................................................................................12

Behavioral Adjustment...................................................................................................14 Maryland Example................................................................................................15 Coding Improvement............................................................................................16

Changes to Specific DRGs ..............................................................................................17 Hospital Acquired Conditions, Including Infections ...........................................................19 Present on Admission ....................................................................................................19

“Never Events” – IPPS and POA Impact..................................................................20 2 or more conditions ............................................................................................20 New Legal Ramifications .......................................................................................21 Indicator Definitions .............................................................................................22 CMS Transmittal 1240...........................................................................................23 Deficit Reduction Act 2005 ....................................................................................23 What Will Happen in October 2008?.......................................................................24 POA Examples .....................................................................................................24 Polling Question #2..............................................................................................25

Preparing for IPPS Changes Don’t be Encoder Dependent.................................................................................27 Next Steps...........................................................................................................27 Action Steps ........................................................................................................28 Clinical Documentation Improvement ............................................................30 Specifically for POA......................................................................................31

Summary ..................................................................................................................32 References and Resources .............................................................................................33 Audience Questions Appendix ..................................................................................................................37 CE Certificate Instructions

Proposed MS-DRGs: A Coding Perspective

AHIMA 2007 Audio Seminar Series 1

Notes/Comments/Questions

Agenda

• Proposed FY 2008 DRG methodology change• Overview of MS-DRGs• Specific DRG changes• Discussion of revised

complication/comorbidity (cc)

• Highlight other IPPS proposed changes• Discussion of POA (Present on Admission)• HIM Coding - Action Steps to take to

prepare for Proposed Changes• Question and Answer Session

1

Proposed Inpatient Prospective Payment System (IPPS)

2




3

Comments were due 6/12/07Final rule expected on or about 8/1/07

Proposed IPPSLast year’s proposed rule (CSA-DRGs)

CMS contracted with RAND corporation3M/HIS• CMS DRGs modified for AP-DRG Logic• Consolidated Severity Adjusted DRGs

Health systems consultants• Refined DRGs

HSS/Ingenix • All Payer Severity DRGs with Medicare modifications

Solucient• Solucient Refined DRGs

RAND interim reportFinal report expected by September

4




Proposed IPPS

Proposed rules states that adoption of MS-DRGs for FY08 would not prohibit CMS from adopting another severity-adjusted prospective payment system

5

Medicare Severity Diagnosis Related Group (MS DRG)

6




MS-DRGs

CMS proposing 745 new Medicare-Severity DRGs (MS-DRGs) to replace current 538 CMS DRGs• Based on current CMS DRG• Greatly improves CMS’ ability to identify groups

of patients with varying levels of severity using secondary diagnoses

• Does a better job of identifying technology• Represent comprehensive approach to applying

severity of illness stratification for Medicare patients throughout the DRGs

7

Creating MS-DRGs

Consolidate CMS DRG

In many cases, subdivide each base DRG into subclasses based on CCs

However, not in all cases

8




Creating a MS-DRG

Created up to three tiers of payment for each DRG based on the presence of: a major complication or comorbidity (MCC), a complication or comorbidity, or no complication or comorbidity

9

Current DRG

DRG 89 Simple Pneumonia, > age 17, with cc

DRG 90 Simple Pneumonia, > age 17, without cc

DRG 91 Simple Pneumonia, age 0-17

Proposed MS-DRG

DRG 193 Simple Pneumonia with MCC

DRG 194 Simple Pneumonia with CC

DRG 195 Simple Pneumonia without MCC or CC

Example of Current CMS and Proposed MS-DRG (Impact Coding)

10




Current DRG

DRG 79 Respiratory Infection and Inflammation, > age 17, with cc

DRG 80 Respiratory Infection and Inflammation, > age 17, without cc

DRG 81 Respiratory Infection and Inflammation, age 0-17

Proposed MS-DRG

DRG 177 Respiratory Infection and Inflammation with MCC

DRG 178 Respiratory Infection and Inflammation with CC

DRG 179 Respiratory Infection and Inflammation without

MCC or CC


11


Current DRG

DRG 291 Heart Failure and Shock with MCC

DRG 292 Heart Failure and Shock with CC

DRG 293 Heart Failure and Shock without MCC or CC

Proposed MS-DRG

DRG 127 Heart Failure and Shock

12





Current DRG

DRG 313 Chest Pain

Proposed MS-DRG

DRG 143 Chest Pain

13

Current DRG

DRG 246 Perc cardiovascular proc w/ drug-eluting stent w/ MCC

DRG 247 Perc cardiovascular proc w/ drug-eluting stent w/o MCC

Proposed MS-DRG

DRG 557 Perc Cardiovascular Proc with drug-eluting stent with MCV dx

DRG 558 Perc Cardiovascular Proc with drug-eluting stent without MCV dx


14




Polling Question #1

Has your facility conducted an analysis of MS-DRGs?

*1 Yes*2 No*3 Don’t Know

15

Complication/Comorbidity List

16




Definition for Reporting/Documenting Secondary or Other Diagnosis

Conditions that affected patient care in terms of requiring:

• clinical evaluation; or• therapeutic treatment; or• diagnostic procedures; or• extended the length of

stay; or• increased nursing care

and/or monitoring

Document all conditions/diagnoses

Proprietary business document. Do not copy or distribute outside of CHW System without the expressed written permission of CHW Corporate Coding/HIM Compliance Department. Dev 12/02

Also: Coding guidelines state “… all conditions that coexist at the of admission, that develops subsequently, or that affect the treatment received and/or the length

of stay. Diagnoses that relate to an earlier episode which have no bearing on

the current hospital stay are to be excluded”

17

Complications and Comorbidities

The presence or absence of a comorbid/complication or “CC” can have an impact on the DRG assignmentDefinition:• A condition (pre-existing or arises during the

stay) that prolongs the length of stay by at least one day in approximately 75 percent of the cases.

Physician documentation is essential to capture patient comorbid/complications• Resource consumption

18




Revised CC list (Impact Coding)

Revised CC list• Intensive monitoring; expensive and

technically complex services or extensive care involving multiple caregivers

• Significant acute manifestation of the disease or an advanced stage or chronic diseases associated with extensive debility

Physician Documentation continues to be key 19

Changes to the “CC List”(Impact Coding)

Proposed CC list is comprised of significant acute diseases, acute exacerbation of significant chronic diseases, advanced or end-stage chronic diseases and chronic diseases associated with extensive debilityCMS reviewed 13,549 secondary diagnosis codes to evaluate their assignment as a CC or non-CC using a combination of mathematical data and the judgment of its medical officers• The removal of many common secondary

diagnoses 20




Categorization of CC Codes

13,549Total

8,232Non-CC

4,221CC

1,096MCC

Number of Codes

Per CMS this change reduced “cc” capture rate from 77.66% to 40.34%

21

Currently …….

IF IT’S NOT DOCUMENTED, WE CANNOT CODE IT!

Acidosis Epilepsy Pathological Fractures Alcoholism Hematemesis Phlebitis Anemia due to blood loss Hematuria Pleural Effusion Angina Hypernatremia Pneumonia Atelectasis Hyponatremia Pneumothorax Atrial Fibrillation Ileus Renal Failure (acute/chronic) Atrial Flutter Malnutrition Renal Insufficiency (acute/chronic) Cachexia Melena Thrombophlebitis Convulsions Metastasis (specify site) Urinary Obstruction CHF Pancreatitis Urinary Retention COPD Paroxysmal Supraventricular Urinary Tract Infection Decubitus Ulcers Tachycardia Ventricular Fibrillation Dehydration Paroxysmal Ventricular Ventricular Flutter Diabetes, out of control Tachycardia Drug Use, Abuse, Dependency

Proprietary business document. Do not copy or distribute outside of CHW System without the expressed written permission of CHW Corporate Coding HIM Compliance Department. Dev. 10/03, Rev 10/05

Thank you for your help!

22




Examples of Major Complications/Comorbidities (MCC)

Sepsis

Acute MI

Acute/chronic diastolic/systolic heart failure

Cardiac arrest

Pneumonia

Acute respiratory failure

23

Examples of Complications/Comorbidities (CC)

Unstable angina

Htn Heart disease with heart failure and/or renal failure

Acute exacerbation of chronic bronchitis

Acute cystitis/UTI

Cardiac arrest

Ileus

CVA

24




Special Consideration for Certain MCC or CC

(complete listing of impacted diagnoses)

Ventricular fibrillation

Cardiac arrest,

Cardiogenic shock,

Other shock without mention of trauma

Respiratory arrest

Excluded as MCC/CC if the patient expires during the admission 25

Proposed Former non-CC to CC or MCC

Infectious Enteritis

Hemiplegia

Encephalopathy

Aphasia

Portal hypertension

Jaundice

Ulcerative colitis

Obstruction of bile duct

26




Proposed deletion for current CC list

Dehydration

Acute/chronic blood loss anemia

Angina

CHF

COPD

Atrial Fibrillation

Chronic Renal Failure

Seizure Disorder

27

Behavioral Adjustment(Impact Coding)

28




Behavioral Adjustment

The proposed rule also includes a 2.4 percent cut to both operating and capital payments in both FYs 2008 and 2009 –$24 billion over five yearsImprove payment based upon patient severity and resources

29

Maryland is using APR-DRGs

30




APR-DRGs in Maryland

3M’s All-Patient Refined DRGs (APR-DRGs) APR-DRGs consider multiple CCs in determining the placement of the patient and, ultimately, the paymentAPR-DRGs consider interactions among primary and secondary diagnoses APR-DRGs consider interactions among procedures and diagnoses as well. (MS-DRGs do not)APR-DRGs have four severity subclasses for each base DRG, while MS-DRGs have three tiersLess than half the number of patient classifications in the MS-DRG system are dependent on the presence or absence of a CC – 410 for MS-DRGs versus 863 for APR-DRGsSo significant differences in the two systems

31

Coding Improvement

Hospitals are already coding as carefully and accurately as possible because of other incentives in the system to do so, such as risk adjustment in various quality reporting systems • An article in the magazine Healthcare

Financial Management

32




33

Replaced Devices

Reduce the amount of IPPS payment when:1) A full or partial credit towards a

replacement device is made2) The device is replaced without

cost to the hospital3) A full credit for the removed device

34




New Technology Add On Payments

Discontinue add-on payment• GORE TAG• Restore• X STOP

New Applicants• Wingspan

35

List of ICD-9-CM diagnosis and procedure code revisionsList of proposed MS-DRGs

Other Changes (Impact Coding)

36




Hospital Acquired Conditions, including Infections

(Impact Coding)

37

Data Collection via POA

POA was approved due to the increased concern with healthcare quality and payment being increased (via DRGs) when a complication occurred that the hospital was responsible for.• Better tracking of hospital acquired infections,

accidents and adverse eventsA patient is admitted to the hospital for a coronary artery bypass surgery. Postoperatively he developed a pulmonary embolism. • Assign “N” on the POA field for the pulmonary

embolism. This is an acute condition that was not present on admission 38




“Never Events” –IPPS and POA ImpactThe CMS IPPS 13 proposed conditions (and their ICD-9-CM codes) include:

• Catheter-associated urinary tract infection (996.64 and various urinary tract infection codes)

• Pressure sores (707.00-707.09) • Object left in surgery (998.4) • Air embolism (999.1) • Delivery of ABO-incompatible blood products (999.1) • Staphylococcus aureus septicemia (038.11) • Ventilator-associated pneumonia (999.9 + pneumonia code) • Vascular catheter-associated infection (996.62) • Clostridium difficile-associated disease (008.45) • Methicilllin-resistant staphylococcus aureus infection (V09.0) • Surgical site infections (998.59) • Surgery on wrong body part, patient, or wrong surgery (E876.5) • Patient falls (no code)

CMS is seeking public comment to determine which of these measures (at least two) to implement for 2008. 39

2 or more conditions…

NoYes YesYes-high cost in specific circumstances

Yes4. Air embolism


Yes3. Object left in surgery

NoYesYesYesYes2. Pressure Ulcers (Decubitus Ulcers)

Minimal-additional infection codes

YesYesYesYes1. Catheter associated UTI

Considera-tions?CC?

Prevention guidelines?

High cost and/or high volume?

Unique Code?

Proposed Hospital-Acquired Conditions

40




2 or more conditions continued….

Multiple codes

Yes YesYesYes-multiple codes reported

6. Staphylococ-cus aureus septicemia


Yes5. Blood incompati-bility

Considera-tions?

CC?Prevention guidelines?

High cost and/or high volume?

Unique Code?

Proposed Hospital-Acquired Conditions

41

New Legal Ramifications “Never Events”

When an event occurs during a hospital encounter or stay that was not expected, should the event result in additional revenue to the provider?CMS believes this impacts quality of care Proposed IPPS rule will address this…

42




A little more about POA

43

Present On Admission Indicator Definitions (Impact Coding)

Y = YesCondition is present at the time of inpatient admission

N = NoCondition not present at the time of inpatient admission

U = UnknownDocumentation is insufficient to determine if the condition is present on admission

W = Clinically UndeterminedThe provider is unable to clinically determine whether condition was present on admission or not

Unreported/Not Used – Exempt from POA reportingThis option is the only circumstance in which thePOA field is left blank. The condition needs to be on the list of ICD-9-CM codes for which this field is not applicable. 44




CMS Transmittal 1240;Change Request 5499

POA is required 10/1/07• The information will not be used by the claims

processing systems until January 1, 2008

CMS will process on claims 1/1/08• Hospitals will be provided with a remark code

on their RA advising them that they did not correctly submit the POA code on the claim

Returned To Provider 4/1/08 • If hospitals do not report a valid POA code for

each diagnosis on the claim, the claim will RTP for correct submission of POA information

45

Deficit Reduction Act 2005

Requires that the Present on Admission indicator be collected for all Medicare patients beginning October 1, 2008Requires CMS to select two or more conditions that are high cost/high volumeRequires CMS to begin excluding those conditions from the calculation of the DRG when they are identified as not present on admission beginning October 1, 2008

46




What will happen in October 2008? (Impact Coding)

For the conditions that have been chosen, if that condition is the only “cc” on the claim, the claim will be paid at the lower weighted DRG. • Example:

• Patient admitted with acute atrial fibrillation and developed a decubitus ulcer* during the hospitalization which is identified by a POA of “N”.

• The DRG assignment would be DRG 138 (current CMS DRG) or MS-DRG 309.

• Payment for this case would be calculated as if the decubitus ulcer was not present – therefore, DRG 139 (current CMS DRG) or MS-DRG 310.

47

POA Examples

Patient is admitted from the ED for a diagnostic work up for chest pain. The final diagnosis was myocardial infarction.

Assign “Y” in the POA field for the myocardial infarction. Although not identified on admission, diagnostic work up confirmed the final

A patient undergoes outpatient surgery for a hernia. During recovery, the patient develops atrial fibrillation and is admitted to the hospital

Assign “Y” in the POA field for atrial fibrillation since it developed prior to an inpatient admission order.

48




POA Examples

A 25 year-old female is admitted for labor and subsequently delivers a normal newborn

Leave the POA field blank. Code 650, Normal delivery is on the exempt from reporting list.

49

Polling Question #2

Will your facility be ready to submit POA indicator beginning in October, 2007?

*1 Yes*2 No*3 Unknown

50




What Are Others in the Industry Saying??

51

What Should HIM and Coding Professionals Do Now to

Prepare for the Potential IPPS Changes??

52




Don’t be Encoder Dependent

Coders need to review carefully the final code that the encoder software is providingUse your ICD-9-CM code book• Alpha and Tabular

Documentation must support the assignment of the code.Coding from memory is dangerous• Coding guidelines change –

Quarterly Coding Clinic

53

HIM Coding Action and Next Steps

Additional education – specific and one-on-one?Have coding staff “shadowing” while on clinical rounds?Reaudit documentation and codingAudit POA reporting• Make physicians aware of POA

Use your ICD-9-CM books!Increase anatomy/physiology knowledgeIncrease pharmacology

54




HIM Coding Action Steps

Recognize core coding concepts remain the same • Accurate and Complete Coding

• UHDDS Definition to support code assignment

• Physician Documentation is key• Continue to increase knowledge of

disease processes and anatomy and physiology

55


Become the experts • MS-DRG

methodology and related changes

• You are here today• Keep up with

industry information

Create awareness:• Senior Management • IS personnel • Department

Directors • Financial Team• Local contract team

56




HIM Action Steps

Understand system impact• 3M Coding and Reimbursement Software• Meditech• Patient Accounting• Case Mix

Mission critical will be preparation for claim submission

57

HIM Action Steps

Inventory• Internal facility

uses of the DRGs for business purposes

• Internal facility applications that contain a DRG

Initiate• Discussions with

other facility negotiated payers that currently use DRG

• Will other payers change to MS-DRG

• May continue with an updated DRG grouper

– Associated cost

58




HIM Action Steps

Plan NOW to:• Order coding resources in a timely

manner• Assess gaps in medical record

documentation• Clinical Documentation Improvement

59

HIM Coding Action Steps - Clinical Documentation Improvement

Recommended action steps• Run facility secondary diagnosis volume

data• Review high volume diagnoses• Understand impact of proposed MS DRGs• Identify opportunities for improvement

60





Prior to MS-DRG/IPPS changes: • Expect more training and education• Work to ensure coding is up to date prior to

transition• Evaluate any necessary change in any

processes, policies, and procedures• Assess gaps in medical record documentation• Continue emphasizing medical

staff responsibilities

61

HIM Coding Action Steps –specifically for POA

All of your coders should become familiar with the POA indicators and corresponding POA Reporting GuidelinesWork will need to begin to educate and prepare others throughout the facility for this requirement.• Level I – Facility Leadership, Department Directors,

Nursing staff, HIM staff• Level II – Medical Staff, Case Managers, PAs,

Revenue Integrity• Level III – Coders, Coding Managers/Supervisors

62




HIM Coding Action Steps –Specifically for POAReview current policiesEstablish any new processes needed • Incorporate POA into QC process

Think about any potential operational impact• Productivity• A/R• Queries

Prepare to educate medical staff on the continued emphasis and importance of their documentation and of your clinical documentation improvement plan

63

Summary

Regulations require healthcare providers to capture all clinical data with new emphasis on complication and “never events”Clinical documentation is at the centerLinkage of documentation to the coding and payment systems continuesThere is a linkage to Quality measures and scorecards of performance from documentation and codingCoding rules and guidelines

64




CMS IPPS Comments

CMS will now review the comments: Where sent to:Leslie Norwalk, Esq.Acting AdministratorCenters for Medicare & Medicaid ServicesHubert H. Humphrey Building200 Independence Avenue, S.W., Room 445-GWashington, DC 20201

Watch for the final rule

65

References and Resources

Medicare Hospital ManualFederal Register, CMS, HHSMedicare Customer Service Department 1-877-567-3094AHA Coding ClinicFaye Brown ICD-9-CM HandbookWeb Med (eMedicine)The IPPS Proposed Regs at:• http://www.access.gpo.gov/su_docs/fedreg/a070503c.html

The RAND report at:• http://www.cms.hhs.gov/reports/downloads/wynn0307.pdf

CMS Transmittal 1240: POA• http://www.cms.hhs.gov/transmittals/downloads/R1240CP.pdf

AHIMA’s Comments on IP-PPS proposed changes and RY2008 Rates • http://www.ahima.org/dc/documents/MicrosoftWord-

AHIMAcomments-IP-PPS08_fin6-7-2007.pdf66




AHIMA Resources

Coding Assessment and Training Solutions Online TrainingDRG Systems Adjusted for Severityhttp://campus.ahima.org/campus/course_info/CATS/CATS_newtraining.html#drg

67

Audience Questions




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Upcoming Audio Seminars

Radiology CodingFaculty: Stacie Buck, RHIA, CCS-P

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Medicare’s Proposed MS-DRGs: A Coding Perspective

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Transcript of Medicare’s Proposed MS-DRGs: A Coding Perspective