1. Medicare Severity Diagnosis-Related Groups
Bunnie Cobb, RHIT, CCS
EOHIMA - September 22, 2007

2. New DRG System Version 25 Biggest change to DRGs in 24 years
RAND study winner
More accurately groups severity of illness (resource intensity) and payment
Reduces incentives to specialty hospitals
CMS committed to MS-DRGs
Similar to changes that began last year, i.e. GI – no cc DRG kept, split cc DRG into 2; w/MCC and w/CC

3. RAND Comparison

4. RAND Comparison continued

5. MS-DRGs Uses CMS DRGs as foundation
Consolidated current DRGs into base DRGs
Made no changes to MDCs 14 and 15 (obstetrics and newborns)
Eliminated:
Low volume DRGs
Age-related DRGs
Increase in layers (subgroups)
As previous, some DRGs are procedure driven.
Examples of DRGs removed due to low volume:
--primarily due to shift to outpatient
6 Carpal Tunnel Release
56 Rhinoplasty
342, 343 Circumcision
Male/female sterilization
43 Pediatric DRGs eliminated <17 years of age
CMS declares again that their DRGs were not intended for the non-Medicare population

6. Types of MS-DRGs

7. Examples of DRG Groups MS-DRG MS-DRG Title 009 Bone marrow transplant
009
Bone marrow transplant
131
Cranial/facial procedures w CC/MCC
132
Cranial/facial procedures w/o CC/MCC
175
Pulmonary embolism w MCC
176
Pulmonary embolism w/o MCC
177
Respiratory infections & inflammations w MCC
178
Respiratory infections & inflammations w CC
179
Respiratory infections & inflammations w/o CC/MCC

8. CCs - The bad news Removed >449 codes from the CC list
Some of our most commonly coded conditions, i.e. CHF, COPD, dehydration, atrial fibrillation
Penalized for nonspecific diagnoses
CHF unspecified = not a CC
Chronic diastolic or systolic CHF = CC
Acute diastolic or systolic CHF = MCC
V24 cases had at least one CC 77.6% of the time, under V25 this will be reduced to 40.34%
Table 6I contains the complete CC Exclusions. Table 6I shows the principal diagnoses for which there is a CC exclusion. Each of these principal diagnoses is shown with an asterisk, and the conditions that will not count as a CC, are provided in an indented column immediately following the affected principal diagnosis.

9. CCs - The Good News ?
Previous reduction of codes on CCs list in 2006 from 3,326 to 2,583…
Now there are 4,922 codes that are either a Major CC or a CC:
Major CC 1,580 codes
CC 3,342 codes
Complications/Comorbidities
􀂃 Reduced CC list from 3,326 to 2,583 diagnoses codes in 2006;
now there are 4,922 codes that are either a Major CC or a CC:
􀂃 Major CC 1,580 codes
􀂃 CC 3,342 codes
􀂃 Patients under V 24 had at least one CC 77.6% of the time, under
the proposed MS-DRG system, this will be reduced to 40.34%.

10. Only a CC if Patient Discharged Alive
427.41, Ventricular fibrillation
427.5, Cardiac arrest
785.51, Cardiogenic shock
785.59, Other shock without mention of trauma
799.1, Respiratory arrest
CMS – patients who are DC’d alive after one of these conditions use resources consistent with an MCC. Patients who expire “could legitimately have one of these diagnoses” so the fact that someone expires is not going to drive the MCC.

11. Financial Impact $ $ $ CMS increased IPPS sum by 3.3%OR
???
CMS increased IPPS sum by 3.3%
Reduction of RWs by 4.8% over 3 years to account for expected coding improvements
1.2% FY08
1.8% FY09
1.8% FY10
See impact file….no one showing a loss
In addition, CMS is phasing in the transition of RW based on costs.
By 2009 RW will be 100% based on costs, not charges
10/1/06 1/3 costs, 2/3 charges
10/1/07 2/3 costs, 1/3 charges
10/1/08 100% cost based RWs

12. What to Expect Extreme scrutiny of Case Mix More physician queries
+ Delays in billing
= More pressure on coders

13. How to Prepare Learn the new rules Make the CC/MCC list your friend
Review all query forms
Plan when to query
Educate yourself clinically
Work with clinicians for more specific documentation

14. References AHIMA’s CoP for Inpatient Coding @ ahima.org
CMS website for IPPS
CMS Adopts DRG Overhaul in IPPS Final Rule, 8/10/07
Journal of AHIMA:
Severity-Adjusted DRGs for FY 2008? July 2007
Positioning Your Facility for Severity Adjusted Coding, April 2007
New codes in PDF: