Medicare Program; Hospital Inpatient Prospective Payment Systems for Acute Care Hospitals and the Long-Term Care Hospital Prospective Payment System and Proposed Policy Changes and Fiscal Year 2020 Rates; Proposed Quality Reporting Requirements for Specific Providers; Medicare and Medicaid Promoting Interoperability Programs Proposed Requirements for Eligible Hospitals and Critical Access Hospitals

 
CONTENT
Federal Register, Volume 84 Issue 86 (Friday, May 3, 2019)
[Federal Register Volume 84, Number 86 (Friday, May 3, 2019)]
[Proposed Rules]
[Pages 19158-19677]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2019-08330]
[[Page 19157]]
Vol. 84
Friday,
No. 86
May 3, 2019
Part II
Book 2 of 2 Books
Pages 19157-19682
 Department of Health and Human Services
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Centers for Medicare & Medicaid Services
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42 CFR Parts 412, 413, and 495
 Medicare Program; Hospital Inpatient Prospective Payment Systems for
Acute Care Hospitals and the Long-Term Care Hospital Prospective
Payment System and Proposed Policy Changes and Fiscal Year 2020 Rates;
Proposed Quality Reporting Requirements for Specific Providers;
Medicare and Medicaid Promoting Interoperability Programs Proposed
Requirements for Eligible Hospitals and Critical Access Hospitals;
Proposed Rule
Federal Register / Vol. 84 , No. 86 / Friday, May 3, 2019 / Proposed
Rules
[[Page 19158]]
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DEPARTMENT OF HEALTH AND HUMAN SERVICES
Centers for Medicare & Medicaid Services
42 CFR Parts 412, 413, and 495
[CMS-1716-P]
RIN 0938-AT73
Medicare Program; Hospital Inpatient Prospective Payment Systems
for Acute Care Hospitals and the Long-Term Care Hospital Prospective
Payment System and Proposed Policy Changes and Fiscal Year 2020 Rates;
Proposed Quality Reporting Requirements for Specific Providers;
Medicare and Medicaid Promoting Interoperability Programs Proposed
Requirements for Eligible Hospitals and Critical Access Hospitals
AGENCY: Centers for Medicare & Medicaid Services (CMS), HHS.
ACTION: Proposed rule.
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SUMMARY: We are proposing to revise the Medicare hospital inpatient
prospective payment systems (IPPS) for operating and capital-related
costs of acute care hospitals to implement changes arising from our
continuing experience with these systems for FY 2020 and to implement
certain recent legislation. We also are proposing to make changes
relating to Medicare graduate medical education (GME) for teaching
hospitals and payments to critical access hospital (CAHs). In addition,
we are proposing to provide the market basket update that would apply
to the rate-of-increase limits for certain hospitals excluded from the
IPPS that are paid on a reasonable cost basis, subject to these limits
for FY 2020. We are proposing to 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) for FY 2020. In this proposed rule, we are including proposals
to address wage index disparities between high and low wage index
hospitals; to provide for an alternative IPPS new technology add-on
payment pathway for certain transformative new devices; and to revise
the calculation of the IPPS new technology add-on payment. In addition,
we are requesting public comments on the substantial clinical
improvement criterion used for evaluating applications for both the
IPPS new technology add-on payment and the OPPS transitional pass-
through payment for devices, and we discuss potential revisions that we
are considering adopting as final policies related to the substantial
clinical improvement criterion for applications received beginning in
FY 2020 for IPPS (that is, for FY 2021 and later new technology add-on
payments) and beginning in CY 2020 for the OPPS.
    We are proposing to establish new requirements or revise existing
requirements for quality reporting by specific Medicare providers
(acute care hospitals, PPS-exempt cancer hospitals, and LTCHs). We also
are proposing to establish new requirements and revise existing
requirements for eligible hospitals and critical access hospitals
(CAHs) participating in the Medicare and Medicaid Promoting
Interoperability Programs. We are proposing to update policies for the
Hospital Value-Based Purchasing (VBP) Program, the Hospital
Readmissions Reduction Program, and the Hospital-Acquired Condition
(HAC) Reduction Program.
DATES: To be assured consideration, comments must be received at one of
the addresses provided in the ADDRESSES section, no later than 5 p.m.
EDT on June 24, 2019.
ADDRESSES: In commenting, please refer to file code CMS-1716-P. Because
of staff and resource limitations, we cannot accept comments by
facsimile (FAX) transmission.
    Comments, including mass comment submissions, must be submitted in
one of the following three ways (please choose only one of the ways
listed):
    1. Electronically. You may (and we encourage you to) submit
electronic comments on this regulation to http://www.regulations.gov.
Follow the instructions under the ``submit a comment'' tab.
    2. By regular mail. You may mail written comments to the following
address ONLY: Centers for Medicare & Medicaid Services, Department of
Health and Human Services, Attention: CMS-1716-P, P.O. Box 8013,
Baltimore, MD 21244-1850.
    Please allow sufficient time for mailed comments to be received
before the close of the comment period.
    3. By express or overnight mail. You may send written comments via
express or overnight mail to the following address ONLY: Centers for
Medicare & Medicaid Services, Department of Health and Human Services,
Attention: CMS-1716-P, Mail Stop C4-26-05, 7500 Security Boulevard,
Baltimore, MD 21244-1850.
    For information on viewing public comments, we refer readers to the
beginning of the SUPPLEMENTARY INFORMATION section.
FOR FURTHER INFORMATION CONTACT: Donald Thompson, (410) 786-4487, and
Michele Hudson, (410) 786-4487, Operating Prospective Payment, MS-DRGs,
Wage Index, New Medical Service and Technology Add-On Payments,
Hospital Geographic Reclassifications, Graduate Medical Education,
Capital Prospective Payment, Excluded Hospitals, Medicare
Disproportionate Share Hospital (DSH) Payment Adjustment, Medicare-
Dependent Small Rural Hospital (MDH) Program, Low-Volume Hospital
Payment Adjustment, and Critical Access Hospital (CAH) Issues.
    Michele Hudson, (410) 786-4487, Mark Luxton, (410) 786-4530, and
Emily Lipkin, (410) 786-3633, Long-Term Care Hospital Prospective
Payment System and MS-LTC-DRG Relative Weights Issues.
    Siddhartha Mazumdar, (410) 786-6673, Rural Community Hospital
Demonstration Program Issues.
    Jeris Smith, (410) 786-0110, Frontier Community Health Integration
Project Demonstration Issues.
    Erin Patton, (410) 786-2437, Hospital Readmissions Reduction
Program Administration Issues.
    Lein Han, 410-786-0205, Hospital Readmissions Reduction Program--
Readmissions--Measures Issues.
    Michael Brea, (410) 786-4961, Hospital-Acquired Condition Reduction
Program Issues.
    Annese Abdullah-Mclaughlin, (410) 786-2995, Hospital-Acquired
Condition Reduction Program--Measures Issues.
    Grace Snyder, (410) 786-0700 and James Poyer, (410) 786-2261,
Hospital Inpatient Quality Reporting and Hospital Value-Based
Purchasing--Program Administration, Validation, and Reconsideration
Issues.
    Cindy Tourison, (410) 786-1093, Hospital Inpatient Quality
Reporting and Hospital Value-Based Purchasing--Measures Issues Except
Hospital Consumer Assessment of Healthcare Providers and Systems
Issues.
    Elizabeth Goldstein, (410) 786-6665, Hospital Inpatient Quality
Reporting and Hospital Value-Based Purchasing--Hospital Consumer
Assessment of Healthcare Providers and Systems Measures Issues.
    Nekeshia McInnis, (410) 786-4486 and Ronique Evans, (410) 786-1000,
PPS-Exempt Cancer Hospital Quality Reporting Issues.
    Mary Pratt, (410) 786-6867, Long-Term Care Hospital Quality Data
Reporting Issues.
    Elizabeth Holland, (410) 786-1309, Dylan Podson (410) 786-5031, and
Bryan Rossi (410) 786-065l, Promoting Interoperability Programs.
[[Page 19159]]
    Benjamin Moll, (410) 786-4390, Provider Reimbursement Review Board
Appeals Issues.
SUPPLEMENTARY INFORMATION: Inspection of Public Comments: All comments
received before the close of the comment period are available for
viewing by the public, including any personally identifiable or
confidential business information that is included in a comment. We
post all comments received before the close of the comment period on
the following website as soon as possible after they have been
received: http://www.regulations.gov/. Follow the search instructions
on that website to view public comments.
Electronic Access
    This Federal Register document is available from the Federal
Register online database through Federal Digital System (FDsys), a
service of the U.S. Government Printing Office. This database can be
accessed via the internet at: http://www.gpo.gov/fdsys.
Tables Available Through the Internet on the CMS Website
    In the past, a majority of the tables referred to throughout this
preamble and in the Addendum to the proposed rule and the final rule
were published in the Federal Register as part of the annual proposed
and final rules. However, beginning in FY 2012, the majority of the
IPPS tables and LTCH PPS tables are no longer published in the Federal
Register. Instead, these tables, generally, will be available only
through the internet. The IPPS tables for this FY 2020 proposed rule
are available through the internet on the CMS website at: http://www.cms.hhs.gov/Medicare/Medicare-Fee-for-Service-Payment/AcuteInpatientPPS/index.html. Click on the link on the left side of the
screen titled, ``FY 2020 IPPS Proposed Rule Home Page'' or ``Acute
Inpatient--Files for Download.'' The LTCH PPS tables for this FY 2020
proposed rule are available through the internet on the CMS website at:
http://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/LongTermCareHospitalPPS/index.html under the list item for Regulation
Number CMS-1716-P. For further details on the contents of the tables
referenced in this proposed rule, we refer readers to section VI. of
the Addendum to this proposed rule.
    Readers who experience any problems accessing any of the tables
that are posted on the CMS websites identified above should contact
Michael Treitel at (410) 786-4552.
Table of Contents
I. Executive Summary and Background
    A. Executive Summary
    B. Background Summary
    C. Summary of Provisions of Recent Legislation Implemented in
This Proposed Rule
    D. Summary of the Provisions of This Proposed Rule
    E. Advancing Health Information Exchange
II. Proposed Changes to Medicare Severity Diagnosis-Related Group
(MS-DRG) Classifications and Relative Weights
    A. Background
    B. MS-DRG Reclassifications
    C. Adoption of the MS-DRGs in FY 2008
    D. Proposed FY 2020 MS-DRG Documentation and Coding Adjustment
    E. Refinement of the MS-DRG Relative Weight Calculation
    F. Proposed Changes to Specific MS-DRG Classifications
    G. Recalibration of the Proposed FY 2020 MS-DRG Relative Weights
    H. Proposed Add-On Payments for New Services and Technologies
for FY 2020
III. Proposed Changes to the Hospital Wage Index for Acute Care
Hospitals
    A. Background
    B. Worksheet S-3 Wage Data for the Proposed FY 2020 Wage Index
    C. Verification of Worksheet S-3 Wage Data
    D. Method for Computing the Proposed FY 2020 Unadjusted Wage
Index
    E. Proposed Occupational Mix Adjustment to the Proposed FY 2020
Wage Index
    F. Analysis and Implementation of the Proposed Occupational Mix
Adjustment and the Proposed FY 2020 Occupational Mix Adjusted Wage
Index
    G. Proposed Application of the Rural Floor, Expired Imputed
Floor Policy, and Proposed Application of the State Frontier Floor
    H. Proposed FY 2020 Wage Index Tables
    I. Proposed Revisions to the Wage Index Based on Hospital
Redesignations and Reclassifications
    J. Proposed 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. Proposed Labor-Related Share for the FY 2020 Wage Index
    N. Proposals to Address Wage Index Disparities Between High and
Low Wage Index Hospitals
IV. Other Decisions and Proposed Changes to the IPPS for Operating
Costs
    A. Proposed Changes to MS-DRGs Subject to Postacute Care
Transfer and MS-DRG Special Payment Policies
    B. Proposed Changes in the Inpatient Hospital Updates for FY
2020 (Sec.  412.64(d))
    C. Proposed Rural Referral Centers (RRCs) Annual Updates to
Case-Mix Index and Discharge Criteria (Sec.  412.96)
    D. Proposed Payment Adjustment for Low-Volume Hospitals (Sec.
412.101)
    E. Proposed Indirect Medical Education (IME) Payment Adjustment
(Sec.  412.105)
    F. Proposed Payment Adjustment for Medicare Disproportionate
Share Hospitals (DSHs) for FY 2020 (Sec.  412.106)
    G. Hospital Readmissions Reduction Program: Proposed Updates and
Changes (Sec. Sec.  412.150 through 412.154)
    H. Hospital Value-Based Purchasing (VBP) Program: Proposed
Policy Changes
    I. Hospital-Acquired Condition (HAC) Reduction Program
    J. Payments for Indirect and Direct Graduate Medical Education
Costs (Sec. Sec.  412.105 and 413.75 through 413.83)
    K. Rural Community Hospital Demonstration Program
V. Proposed Changes to the IPPS for Capital-Related Costs
    A. Overview
    B. Additional Provisions
    C. Proposed Annual Update for FY 2020
VI. Proposed Changes for Hospitals Excluded From the IPPS
    A. Proposed Rate-of-Increase in Payments to Excluded Hospitals
for FY 2020
    B. Request for Public Comments on Methodologies and Requirements
for Adjustments to Rate-of-Increase Ceiling
    C. Critical Access Hospitals (CAHs)
VII. Proposed Changes to the Long-Term Care Hospital Prospective
Payment System (LTCH PPS) for FY 2019
    A. Background of the LTCH PPS
    B. Proposed Medicare Severity Long-Term Care Diagnosis-Related
Group (MS-LTC-DRG) Classifications and Relative Weights for FY 2020
    C. Proposed Payment Adjustment for LTCH Discharges That Do Not
Meet the Applicable Discharge Payment Percentage
    D. Proposed Changes to the LTCH PPS Payment Rates and Other
Proposed Changes to the LTCH PPS for FY 2020
VIII. Proposed Quality Data Reporting Requirements for Specific
Providers and Suppliers
    A. Hospital Inpatient Quality Reporting (IQR) Program
    B. PPS-Exempt Cancer Hospital Quality Reporting (PCHQR) Program
    C. Long-Term Care Hospital Quality Reporting Program (LTCH QRP)
    D. Proposed Changes to the Medicare and Medicaid Promoting
Interoperability Programs
IX. MedPAC Recommendations
X. Other Required Information
    A. Publicly Available Data
    B. Collection of Information Requirements
    C. Response to Public Comments
XI. Provider Reimbursement Review Board (PRRB) Appeals
Regulation Text
Addendum--Proposed Schedule of Standardized Amounts, Update Factors,
and Rate-of-Increase Percentages Effective With Cost Reporting Periods
Beginning on or After October 1, 2019 and Proposed Payment Rates for
LTCHs Effective With Discharges Occurring on or After October 1, 2019
I. Summary and Background
II. Proposed Changes to the Prospective Payment Rates for Hospital
Inpatient
[[Page 19160]]
Operating Costs for Acute Care Hospitals for FY 2020
    A. Calculation of the Proposed Adjusted Standardized Amount
    B. Proposed Adjustments for Area Wage Levels and Cost-of-Living
    C. Calculation of the Proposed Prospective Payment Rates
III. Proposed Changes to Payment Rates for Acute Care Hospital
Inpatient Capital-Related Costs for FY 2020
    A. Determination of Proposed Federal Hospital Inpatient Capital-
Related Prospective Payment Rate Update
    B. Calculation of the Proposed Inpatient Capital-Related
Prospective Payments for FY 2020
    C. Capital Input Price Index
IV. Proposed Changes to Payment Rates for Excluded Hospitals: Rate-
of-Increase Percentages for FY 2020
V. Proposed Updates to the Payment Rates for the LTCH PPS for FY
2020
    A. Proposed LTCH PPS Standard Federal Payment Rate for FY 2020
    B. Proposed Adjustment for Area Wage Levels Under the LTCH PPS
for FY 2020
    C. Proposed LTCH PPS Cost-of-Living Adjustment (COLA) for LTCHs
Located in Alaska and Hawaii
    D. Proposed Adjustment for LTCH PPS High-Cost Outlier (HCO)
Cases
    E. Proposed Update to the IPPS Comparable/Equivalent Amounts to
Reflect the Statutory Changes to the IPPS DSH Payment Adjustment
Methodology
    F. Computing the Proposed Adjusted LTCH PPS Federal Prospective
Payments for FY 2020
VI. Tables Referenced in This Proposed Rule and Available Through
the Internet on the CMS Website
Appendix A--Economic Analyses
I. Regulatory Impact Analysis
    A. Statement of Need
    B. Overall Impact
    C. Objectives of the IPPS and the LTCH PPS
    D. Limitations of Our Analysis
    E. Hospitals Included in and Excluded From the IPPS
    F. Effects on Hospitals and Hospital Units Excluded From the
IPPS
    G. Quantitative Effects of the Proposed Policy Changes Under the
IPPS for Operating Costs
    H. Effects of Other Proposed Policy Changes
    I. Effects of Proposed Changes in the Capital IPPS
    J. Effects of Proposed Payment Rate Changes and Policy Changes
Under the LTCH PPS
    K. Effects of Proposed Requirements for Hospital Inpatient
Quality Reporting (IQR) Program
    L. Effects of Proposed Requirements for the PPS-Exempt Cancer
Hospital Quality Reporting (PCHQR) Program
    M. Effects of Proposed Requirements for the Long-Term Care
Hospital Quality Reporting Program (LTCH QRP)
    N. Effects of Proposed Requirements Regarding the Medicare
Promoting Interoperability Program
    O. Alternatives Considered
    P. Reducing Regulation and Controlling Regulatory Costs
    Q. Overall Conclusion
    R. Regulatory Review Costs
II. Accounting Statements and Tables
    A. Acute Care Hospitals
    B. LTCHs
III. Regulatory Flexibility Act (RFA) Analysis
IV. Impact on Small Rural Hospitals
V. Unfunded Mandate Reform Act (UMRA) Analysis
VI. Executive Order 13175
VII. Executive Order 12866
Appendix B: Recommendation of Update Factors for Operating Cost Rates
of Payment for Inpatient Hospital Services
I. Background
II. Proposed Inpatient Hospital Update for FY 2020
    A. Proposed FY 2020 Inpatient Hospital Update
    B. Proposed Update for SCHs and MDHs for FY 2020
    C. Proposed FY 2020 Puerto Rico Hospital Update
    D. Proposed Update for Hospitals Excluded From the IPPS
    E. Proposed Update for LTCHs for FY 2020
III. Secretary's Recommendation
IV. MedPAC Recommendation for Assessing Payment Adequacy and
Updating Payments in Traditional Medicare
I. Executive Summary and Background
A. Executive Summary
1. Purpose and Legal Authority
    This proposed rule would make payment and policy changes under the
Medicare inpatient prospective payment systems (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
would make 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 proposed rule also
would make policy changes to programs associated with Medicare IPPS
hospitals, IPPS-excluded hospitals, and LTCHs. In this proposed rule,
we are including proposals to address wage index disparities between
high and low wage index hospitals; to provide for an alternative IPPS
new technology add-on payment pathway for certain transformative new
devices; and to revise the calculation of the IPPS new technology add-
on payment. In addition, we are requesting public comments on the
substantial clinical improvement criterion for evaluating applications
for both the IPPS new technology add-on payment and the OPPS
transitional pass-through payment for devices, and we discuss potential
revisions that we are considering adopting as final policies related to
the substantial clinical improvement criterion for FY 2020 for IPPS and
CY 2020 for the OPPS.
    We are proposing to establish new requirements and revise existing
requirements for quality reporting by specific providers (acute care
hospitals, PPS-exempt cancer hospitals, and LTCHs) that are
participating in Medicare. We also are proposing to establish new
requirements and revise existing requirements for eligible hospitals
and CAHs participating in the Medicare and Medicaid Promoting
Interoperability Programs. We are proposing to update policies for the
Hospital Value-Based Purchasing (VBP) Program, the Hospital
Readmissions Reduction Program, and the Hospital-Acquired Condition
(HAC) Reduction Program.
    Under various statutory authorities, we are proposing to make
changes to the Medicare IPPS, to the LTCH PPS, and to other related
payment methodologies and programs for FY 2020 and subsequent fiscal
years. 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 BBRA (Pub. L. 106-113) and
section 307(b)(1) of the 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.
[[Page 19161]]
     Sections 1814(l), 1820, and 1834(g) of the Act, which
specify that payments are made to critical access hospitals (CAHs)
(that is, rural hospitals or facilities that meet certain statutory
requirements) for inpatient and outpatient services and that these
payments are generally based on 101 percent of reasonable cost.
     Section 1866(k) of the Act, which establishes 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(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.
     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(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 requires the Secretary to compare hospitals
with respect to the number of their Medicare-Medicaid dual-eligible
beneficiaries (dual-eligibles) 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 a new 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
section 1886(d)(5)(F) of the Act for DSH (``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; (2) 1
minus the percent change in the percent of individuals who are
uninsured; and (3) a hospital's uncompensated care amount relative to
the uncompensated care amount of all DSH hospitals expressed as a
percentage.
     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, and provides for a 4-year
transitional blended payment rate for discharges occurring in LTCH cost
reporting periods beginning in FYs 2016 through 2019. 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 1886(m)(5)(D)(iv) of the Act, as added by section
1206(c) of the Pathway for Sustainable Growth Rate (SGR) Reform Act of
2013 (Pub. L. 113-67), which provides for the establishment of a
functional status quality measure in the LTCH QRP for change in
mobility among inpatients requiring ventilator support.
     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.
2. Summary of the Major Provisions
    Below we provide a summary of the major provisions in this proposed
rule. In general, these major provisions are being proposed as part of
the annual update to the payment policies and payment rates, consistent
with the applicable statutory provisions. A general summary of the
proposed changes in this proposed rule is presented in section I.D. of
the preamble of this proposed rule.
a. Proposed MS-DRG Documentation and Coding Adjustment
    Section 631 of the American Taxpayer Relief Act of 2012 (ATRA, Pub.
L. 112-240) amended section 7(b)(1)(B) of Public Law 110-90 to require
the Secretary to make a recoupment adjustment to the standardized
amount of Medicare payments to acute care hospitals to account for
changes in MS-DRG documentation and coding that do not reflect real
changes in case-mix, totaling $11 billion over a 4-year period of FYs
2014, 2015, 2016, and 2017. The FY 2014 through FY 2017 adjustments
represented the amount of the increase in aggregate payments as a
result of not completing the prospective adjustment authorized under
section 7(b)(1)(A) of Public Law 110-90 until FY 2013. Prior to the
ATRA, this amount could not have been recovered under Public Law 110
90. Section 414 of the Medicare Access and CHIP Reauthorization Act of
2015 (MACRA) (Pub. L. 114-10) replaced the single positive adjustment
we intended to make in FY 2018 with a 0.5 percent positive adjustment
to the standardized amount of Medicare payments to acute care hospitals
for FYs 2018 through 2023. (The FY 2018 adjustment was subsequently
adjusted to 0.4588 percent by section 15005 of the 21st Century Cures
Act.) Therefore, for FY 2020, we are proposing to make an adjustment of
+ 0.5 percent to the standardized amount.
b. Request for Information on the New Technology Add-On Payment and
Transitional Device Pass-Through Payment Substantial Clinical
Improvement Criterion and Discussion of Potential Revisions to the New
Technology Add-On Payment and Transitional Device Pass-Through Payment
Substantial Clinical Improvement Criterion
    The substantial clinical improvement criterion that is used to
evaluate a technology that is the subject of an application for the new
technology add-on payment under the IPPS or an application for the
transitional pass-through payment for additional costs of innovative
devices under the OPPS is the subject of the request for information
and the discussion of potential revisions included in this proposed
rule.
[[Page 19162]]
    We understand that greater clarity regarding what would
substantiate the requirements of this criterion would help the public,
including innovators, better understand how CMS evaluates new
technology applications for add-on payments and provide greater
predictability about which applications will meet the criterion for
substantial clinical improvement. We are considering potential
revisions to the substantial clinical improvement criterion under the
IPPS new technology add-on payment policy and the OPPS transitional
pass-through payment policy for devices policy, and are seeking public
comments on the type of additional detail and guidance that the public
and applicants for new technology add-on payments would find useful.
The comments we receive in response to those general questions will
inform future rulemaking after the FY 2020 IPPS/LTCH PPS final rule.
This request for public comments is intended to be broad in scope and
provide a foundation for potential rulemaking in future years.
    In addition to this broad request for public comments for potential
rulemaking in future years, in order to respond to stakeholder feedback
requesting greater understanding of CMS' approach to evaluating
substantial clinical improvement, we are soliciting public comments on
specific changes or clarifications to the IPPS and OPPS substantial
clinical improvement criterion that CMS might consider making in the FY
2020 IPPS/LTCH PPS final rule for applications received beginning in FY
2020 for the IPPS and CY 2020 for the OPPS to provide greater clarity
and predictability.
c. Proposed Alternative Inpatient New Technology Add-On Payment Pathway
for Transformative New Devices
    After consideration of the issues discussed in section III.H.8. of
the preamble of this proposed rule relating to the Food and Drug
Administration's (FDA's) expedited programs, and consistent with the
Administration's commitment to addressing barriers to health care
innovation and ensuring that Medicare beneficiaries have access to
critical and life-saving new cures and technologies that improve
beneficiary health outcomes, we concluded that it would be appropriate
to develop an alternative pathway for the inpatient new technology add-
on payment for transformative medical devices. In situations where a
new medical device is part of the FDA's Breakthrough Devices Program
and has received FDA marketing authorization (that is, the device has
received pre-market approval (PMA); 510(k) clearance; or the granting
of a De Novo classification request), we are proposing an alternative
inpatient new technology add-on payment pathway to facilitate access to
this technology for Medicare beneficiaries.
    Specifically, we are proposing that, for applications received for
IPPS new technology add-on payments for FY 2021 and subsequent fiscal
years, if a medical device is part of the FDA's Breakthrough Devices
Program and received FDA marketing authorization, such a device would
be considered new and not substantially similar to an existing
technology for purposes of new technology add-on payment under the
IPPS. In light of the criteria applied under the FDA's Breakthrough
Devices Program, and because the technology may not have a sufficient
evidence base to demonstrate substantial clinical improvement at the
time of FDA marketing authorization, we also are proposing that the
medical device would not need to meet the requirement under 42 CFR
412.87(b)(1) that it represent an advance that substantially improves,
relative to technologies previously available, the diagnosis or
treatment of Medicare beneficiaries.
d. Proposed Revision of the Calculation of the Inpatient Hospital New
Technology Add-On Payment
    The current calculation of the new technology add-on payment is
based on the cost to hospitals for the new medical service or
technology. Under Sec.  412.88, if the costs of the discharge
(determined by applying 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), Medicare will make 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. Unless
the discharge qualifies for an outlier payment, the additional Medicare
payment is limited to the full MS-DRG payment plus 50 percent of the
estimated costs of the new technology or medical service.
    After consideration of the concerns raised by commenters and other
stakeholders, we agree that there may be merit to the recommendations
to increase the maximum add-on amount, and that capping the add-on
payment amount at 50 percent could, in some cases, no longer provide a
sufficient incentive for the use of new technology. To address this
issue, we believe it would be appropriate to modify the current payment
mechanism to increase the amount of the maximum add-on payment amount
to 65 percent. Therefore, we are proposing that, beginning with
discharges occurring on or after October 1, 2019, if the costs of a
discharge involving a new medical service or technology exceed the full
DRG payment (including payments for IME and DSH, but excluding outlier
payments), Medicare would 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.
e. Proposals To Address Wage Index Disparities Between High and Low
Wage Index Hospitals
    In the FY 2019 IPPS/LTCH PPS proposed rule (83 FR 20372), we
invited the public to submit further comments, suggestions, and
recommendations for regulatory and policy changes to the Medicare wage
index. Many of the responses received from this request for information
(RFI) reflect a common concern that the current wage index system
perpetuates and exacerbates the disparities between high and low wage
index hospitals. Many respondents also expressed concern that the
calculation of the rural floor has allowed a limited number of States
to manipulate the wage index system to achieve higher wages for many
urban hospitals in those States at the expense of hospitals in other
States, which also contributes to wage index disparities.
    To help mitigate these wage index disparities, including those
resulting from the inclusion of hospitals with rural reclassifications
under 42 CFR 412.103 in the rural floor, we are proposing to reduce the
disparity between high and low wage index hospitals by increasing the
wage index values for certain hospitals with low wage index values and
decreasing the wage index values for certain hospitals with high wage
index values for budget neutrality purposes, as well as changing the
calculation of the rural floor. We also are proposing a transition for
hospitals experiencing significant decreases in their wage index values
as a result of these proposed changes. We are proposing to make these
changes in a budget neutral manner.
    In this proposed rule, we are proposing to increase the wage index
for hospitals with a wage index value below the 25th percentile wage
index value for a fiscal year by half the difference between the
otherwise applicable final wage index value for a year for that
hospital and the 25th percentile wage index value for that year across
all hospitals. Furthermore, we are
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proposing 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. Under our proposal, in order to offset the
estimated increase in IPPS payments to hospitals with wage index values
below the 25th percentile wage index value, we are proposing to
decrease the wage index values for certain hospitals with high wage
index values (that is, hospitals with wage index values above the 75th
percentile wage index value), but preserve the rank order among those
values.
    In addition, we are proposing to remove urban to rural
reclassifications from the calculation of the rural floor, such that,
beginning in FY 2020, the rural floor would be calculated without
including the wage data of hospitals that have reclassified as rural
under section 1886(d)(8)(E) of the Act (as implemented in the
regulations at Sec.  412.103). Also, for the purposes of applying the
provisions of section 1886(d)(8)(C)(iii) of the Act, we are proposing
to remove urban to rural reclassifications from the calculation of
``the wage index for rural areas in the State in which the county is
located'' as referred to in the statute.
    Lastly, for FY 2020, we are proposing to place a 5-percent cap on
any decrease in a hospital's wage index from the hospital's final wage
index in FY 2019. We are proposing to apply a budget neutrality
adjustment to the standardized amount so that our proposed transition
for hospitals that could be negatively impacted is implemented in a
budget neutral manner.
f. Proposed DSH Payment Adjustment and Additional Payment for
Uncompensated Care
    Section 3133 of the Affordable Care Act modified the Medicare
disproportionate share hospital (DSH) payment methodology beginning in
FY 2014. Under section 1886(r) of the Act, which was added by section
3133 of the Affordable Care Act, starting in FY 2014, 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 FY 2020 IPPS/LTCH PPS proposed rule, we are proposing to
update our estimates of the three factors used to determine
uncompensated care payments for FY 2020. We are proposing 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 the calculation of Factor 2. We also are proposing
to use a single year of data on uncompensated care costs from Worksheet
S-10 for FY 2015 to determine Factor 3 for FY 2020. We also are seeking
public comments on whether we should, due to changes in the reporting
instructions that became effective for FY 2017, alternatively use a
single year of Worksheet S-10 data from the FY 2017 cost reports,
instead of the FY 2015 Worksheet S-10 data, to calculate Factor 3 for
FY 2020. In addition, we are proposing to continue to use only data
regarding low-income insured days for FY 2013 to determine the amount
of uncompensated care payments for Puerto Rico hospitals, and Indian
Health Service and Tribal hospitals. We are not proposing specific
Factor 3 polices for all-inclusive rate providers for FY 2020. In this
proposed rule, we also are proposing to continue to use the following
established policies: (1) For providers with multiple cost reports,
beginning in the same fiscal year, to use the longest cost report and
annualize Medicaid data and uncompensated care data if a hospital's
cost report does not equal 12 months of data; (2) in the rare case
where a provider has multiple cost reports beginning in the same fiscal
year, but one report also spans the entirety of the following fiscal
year, such that the hospital has no cost report for that fiscal year,
to use the cost report that spans both fiscal years for the latter
fiscal year; and (3) to apply statistical trim methodologies to
potentially aberrant cost-to-charge ratios (CCRs) and potentially
aberrant uncompensated care costs reported on the Worksheet S-10.
g. Proposed Changes to the LTCH PPS
    In this 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 2020. We also are proposing the payment
adjustment for LTCH discharges when the LTCH does not meet the
applicable discharge payment percentage and a proposed reinstatement
process, as required by section 1886(m)(6)(C) of the Act. An LTCH would
be subject to this payment adjustment if, for cost reporting periods
beginning in FY 2020 and subsequent fiscal years, the LTCH's percentage
of Medicare discharges that meet the criteria for exclusion from the
site neutral payment rate (that is, discharges paid the LTCH PPS
standard Federal payment rate) of its total number of Medicare FFS
discharges paid under the LTCH PPS during the cost reporting period is
not at least 50 percent.
h. Reduction of Hospital Payments for Excess Readmissions
    We are proposing to make changes to policies for the Hospital
Readmissions Reduction Program, which was established under section
1886(q) of the Act, as amended by section 15002 of the 21st Century
Cures Act. The Hospital Readmissions Reduction Program requires a
reduction to a hospital's base operating DRG payment to account for
excess readmissions of selected applicable conditions. For FY 2017 and
subsequent years, the reduction is based on a hospital's risk-adjusted
readmission rate during a 3-year period for acute myocardial infarction
(AMI), heart failure (HF), pneumonia, chronic obstructive pulmonary
disease (COPD), elective primary total hip arthroplasty/total knee
arthroplasty (THA/TKA), and coronary artery bypass graft (CABG)
surgery. In this proposed rule, we are proposing the following
policies: (1) A measure removal policy that aligns with the removal
factor policies previously adopted in other quality reporting and
quality payment programs; (2) an update to the Program's definition of
``dual-eligible'' beginning with the FY 2021 program year to allow for
a 1-month lookback period in data sourced from the State Medicare
Modernization Act (MMA) files to determine dual-eligible status for
beneficiaries who die in the month of discharge; (3) a subregulatory
process to address any potential future nonsubstantive changes to the
payment adjustment factor components; and (4) an update to the
Program's regulations at 42 CFR 412.152 and 412.154 to reflect proposed
policies and to codify additional previously finalized policies.
i. 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 proposed rule, we are proposing that the Hospital VBP
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Program will use the same data used by the HAC Reduction Program for
purposes of calculating the Centers for Disease Control and Prevention
(CDC) National Health Safety Network (NHSN) Healthcare-Associated
Infection (HAI) measures beginning with CY 2020 data collection, when
the Hospital IQR Program will no longer collect data on those measures,
and will rely on HAC Reduction Program validation to ensure the
accuracy of CDC NHSN HAI measure data used in the Hospital VBP Program.
We also are newly establishing certain performance standards.
j. Hospital-Acquired Condition (HAC) Reduction Program
    Section 1886(p) of the Act establishes an incentive to hospitals to
reduce the incidence of hospital-acquired conditions by requiring the
Secretary to make an adjustment to payments to applicable hospitals
effective for discharges beginning on October 1, 2014. This 1-percent
payment reduction applies to hospitals that rank in the worst-
performing quartile (25 percent) of all applicable hospitals, relative
to the national average, of conditions acquired during the applicable
period and on all of the hospital's discharges for the specified fiscal
year. As part of our agency-wide Patients over Paperwork and Meaningful
Measures Initiatives, discussed in section I.A.2. of the FY 2019 IPPS/
LTCH PPS final rule (83 FR 41147 and 41148), we are proposing to: (1)
Adopt a measure removal policy that aligns with the removal factor
policies previously adopted in other quality reporting and quality
payment programs; (2) clarify administrative policies for validation of
the CDC NHSN HAI measures; (3) adopt the data collection periods for
the FY 2022 program year; and (4) update 42 CFR 412.172(f) to reflect
policies finalized in the FY 2019 IPPS/LTCH PPS final rule.
k. 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 that would otherwise apply to the standardized
amount applicable to discharges occurring in that fiscal year.
    In this proposed rule, we are proposing to make several changes. We
are proposing to: (1) Adopt two opioid-related eCQMs (Safe Use of
Opioids--Concurrent Prescribing eCQM (NQF #3316e) and Hospital Harm--
Opioid-Related Adverse Events eCQM) beginning with the CY 2021
reporting period/FY 2023 payment determination; (2) adopt the Hybrid
Hospital-Wide All-Cause Readmission (Hybrid HWR) measure (NQF #2879) in
a stepwise fashion, beginning with two voluntary reporting periods
which would run from July 1, 2021 through June 30, 2022, and from July
1, 2022 through June 30, 2023, before requiring reporting of the
measure for the reporting period that would run from July 1, 2023
through June 30, 2024, impacting the FY 2026 payment determination and
for subsequent years; and (3) remove the Claims-Based Hospital-Wide
All-Cause Unplanned Readmission Measure (NQF #1789) (HWR claims-only
measure) beginning with the FY 2026 payment determination. We also are
proposing reporting and submission requirements for eCQMs, including
proposals to: (1) Extend current eCQM reporting and submission
requirements for both the CY 2020 reporting period/FY 2022 payment
determination and CY 2021 reporting period/FY 2023 payment
determination; (2) change eCQM reporting and submission requirements
for the CY 2022 reporting period/FY 2024 payment determination, such
that hospitals would be required to report one, self-selected calendar
quarter of data for three self-selected eCQMs and the proposed Safe Use
of Opioids--Concurrent Prescribing eCQM (NQF #3316e), for a total of
four eCQMs; and (3) continue requiring that EHRs be certified to all
available eCQMs used in the Hospital IQR Program for the CY 2020
reporting period/FY 2022 payment determination and subsequent years.
These proposals are in alignment with proposals under the Promoting
Interoperability Program. We also are proposing reporting and
submission requirements for the Hybrid HWR measure. In addition, we are
seeking public comments on three measures for potential future
inclusion in the Hospital IQR Program.
l. Long-Term Care Hospital Quality Reporting Program (LTCH QRP)
    The LTCH QRP is authorized by section 1886(m)(5) of the Act and
applies to all hospitals certified by Medicare as long-term care
hospitals (LTCHs). Under the LTCH QRP, the Secretary must reduce by 2
percentage points the annual update to the LTCH PPS standard Federal
rate for discharges for an LTCH during a fiscal year if the LTCH fails
to submit data in accordance with the LTCH QRP requirements specified
for that fiscal year. As discussed in section VIII.C. of the preamble
of this proposed rule, we are proposing to adopt two measures that meet
the requirements of section 1899B(c)(1)(E) of the Act, modify an
existing measure, and adopt new standardized patient assessment data
elements that satisfy section 1899B(b) of the Act. We also are
proposing to move the implementation date of the LTCH Continuity
Assessment Record and Evaluation Data Set (LTCH CARE Data Set or LCDS)
from April to October to align with other post-acute care programs
beginning October 1, 2020. Lastly, we are proposing updates related to
the system used for the submission of data and related regulations.
m. Medicare and Medicaid Promoting Interoperability Programs
    For purposes of an increased level of stability, reducing the
burden on eligible hospitals and CAHs, and clarifying certain existing
policies, we are proposing several changes to the Medicare Promoting
Interoperability Program. Specifically, we are proposing to: (1)
Eliminate requirement that, for the FY 2020 payment adjustment year,
for an eligible hospital that has not successfully demonstrated it is a
meaningful EHR user in a prior year, the EHR reporting period in CY
2019 must end before and the eligible hospital must successfully
register for and attest to meaningful use no later than the October 1,
2019 deadline; (2) establish an EHR reporting period of a minimum of
any continuous 90-day period in CY 2021 for new and returning
participants (eligible hospitals and CAHs) in the Medicare Promoting
Interoperability Program attesting to CMS; (3) require that the
Medicare Promoting Interoperability Program measure actions must occur
within the EHR reporting period beginning with the EHR reporting period
in CY 2020; (4) revise the Query of PDMP measure to make it an optional
measure worth 5 bonus points in CY 2020, remove the exclusions
associated with this measure in CY 2020, require a yes/no response
instead of a numerator and denominator for CY 2019 and CY 2020, and
clearly state our intended policy that the measure is worth a full 5
bonus points in CY 2019 and CY 2020; (5) change the maximum points
available for the e-Prescribing measure to 10 points beginning in CY
2020, in the event we finalize the proposed changes to the Query of
PDMP measure; (6) remove the Verify Opioid Treatment Agreement measure
beginning in CY 2020 and clearly state our intended policy that this
measure is worth a full 5 bonus points in CY 2019; and (7) revise the
Support Electronic Referral Loops by Receiving and Incorporating Health
Information measure to more clearly
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capture the previously established policy regarding CEHRT use. We are
also proposing to amend our regulations to incorporate several of these
proposals.
    For CQM reporting under the Medicare and Medicaid Promoting
Interoperability Programs, we are generally proposing to align our
requirements with requirements under the Hospital IQR Program.
Specifically, we are proposing to: (1) Adopt two opioid-related eCQMs
(Safe Use of Opioids--Concurrent Prescribing eCQM (NQF #3316e) and
Hospital Harm--Opioid-Related Adverse Events eCQM) beginning with the
reporting period in CY 2021; (2) extend current CQM reporting and
submission requirements for the reporting periods in CY 2020 and CY
2021; and (3) establish CQM reporting and submission requirements for
the reporting period in CY 2022, which would require all eligible
hospitals and CAHs to report on the proposed Safe Use of Opioids--
Concurrent Prescribing eCQM (NQF #3316e) beginning with the reporting
period in CY 2022.
    We are seeking public comments on whether we should consider
proposing to adopt in future rulemaking the Hybrid Hospital-Wide All-
Cause Readmission (Hybrid HWR) measure beginning with the reporting
period in CY 2023, a measure which we are proposing to adopt under the
Hospital IQR Program, and we are seeking information on a variety of
issues regarding the future direction of the Medicare and Medicaid
Promoting Interoperability Programs.
3. Summary of Costs and Benefits
     Proposed Adjustment for MS-DRG Documentation and Coding
Changes. Section 414 of the MACRA replaced the single positive
adjustment we intended to make in FY 2018 once the recoupment required
by section 631 of the ATRA was complete with a 0.5 percentage point
positive adjustment to the standardized amount of Medicare payments to
acute care hospitals for FYs 2018 through 2023. (The FY 2018 adjustment
was subsequently adjusted to 0.4588 percentage point by section 15005
of the 21st Century Cures Act.) For FY 2020, we are proposing to make
an adjustment of +0.5 percentage point to the standardized amount
consistent with the MACRA.
     Proposed Alternative Inpatient New Technology Add-On
Payment Pathway for Transformative New Devices: In this proposed rule,
we are proposing an alternative inpatient new technology add-on payment
pathway for a new medical device that is part of the FDA Breakthrough
Devices Program and has received FDA marketing authorization, that is,
received PMA approval, 510(k) clearance, or the granting of De Novo
classification request.
    Given the relatively recent introduction of FDA's Breakthrough
Devices Program, there have not been any medical devices that were part
of the Breakthrough Devices Program and received FDA marketing
authorization and for which the applicant applied for a new technology
add-on payment under the IPPS and was not approved. Therefore, it is
not possible to quantify the impact of this proposal.
     Proposed Changes to the Calculation of the
Inpatient Hospital New Technology Add-On Payment: The current
calculation of the new technology add-on payment is based on the cost
to hospitals for the new medical service or technology. Under existing
Sec.  412.88, if the costs of the discharge exceed the full DRG payment
(including payments for IME and DSH, but excluding outlier payments),
Medicare makes an add-on payment equal to the lesser of: (1) 50 percent
of the estimated costs of the new technology or medical service; or (2)
50 percent of the amount by which the costs of the case exceed the
standard DRG payment. In this proposed rule, we are proposing to modify
the current payment mechanism to increase the amount of the maximum
add-on payment amount to 65 percent. Therefore, we are proposing that
if the costs of a discharge involving a new technology exceed the full
DRG payment (including payments for IME and DSH, but excluding outlier
payments), Medicare would 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.
    We estimate that if we finalize our proposals for the 9
technologies for which we are proposing to continue to make new
technology add-on payments in FY 2020 and if we determine that all 17
of the FY 2020 new technology add-on payment applications meet the
specified criteria for new technology add-on payments for FY 2020, this
proposal, if finalized, would increase IPPS spending by approximately
$110 million in FY 2020.
     Proposed Changes to Address Wage Index Disparities Between
High and Low Wage Index Hospitals. As discussed in section III.N. of
the preamble of this proposed rule, to help mitigate wage index
disparities, including those resulting from the inclusion of hospitals
with rural reclassifications under 42 CFR 412.103 in the rural floor,
we are proposing to reduce the disparity between high and low wage
index hospitals by increasing the wage index values for certain
hospitals with low wage index values and decreasing the wage index
values of certain hospitals with high wage index values for budget
neutrality purposes, as well as changing the calculation of the rural
floor. We also are proposing a transition for hospitals experiencing
significant decreases in their wage index values as a result of these
proposed changes. We are proposing to make these changes in a budget
neutral manner.
    We are proposing to apply a budget neutrality adjustment to the
standardized amount so that our proposed transition for hospitals that
could be negatively impacted is implemented in a budget neutral manner.
     Proposed Medicare DSH Payment Adjustment and Additional
Payment for Uncompensated Care. For FY 2020, we are proposing to update
our estimates of the three factors used to determine uncompensated care
payments. We are proposing to continue to use uninsured estimates
produced by OACT as part of the development of the NHEA in the
calculation of Factor 2. We also are proposing to use a single year of
data on uncompensated care costs from Worksheet S-10 for FY 2015 to
determine Factor 3 for FY 2020. In addition, we are seeking public
comments on whether we should, due to changes in the reporting
instructions that became effective for FY 2017, alternatively use a
single year of Worksheet S-10 data from the FY 2017 cost reports,
instead of the FY 2015 Worksheet S-10 data, to calculate Factor 3 for
FY 2020. To determine the amount of uncompensated care for purposes of
calculating Factor 3 for Puerto Rico hospitals and Indian Health
Service and Tribal hospitals, we are proposing to continue to use only
data regarding low-income insured days for FY 2013.
    We project that the amount available to distribute as payments for
uncompensated care for FY 2020 would increase by approximately $216
million, as compared to our estimate of the uncompensated care payments
that will be distributed in FY 2019. The payments have redistributive
effects, based on a hospital's uncompensated care amount relative to
the uncompensated care amount for all hospitals that are projected to
be eligible to receive Medicare DSH payments, and the calculated
payment amount is not directly tied to a hospital's number of
discharges.
[[Page 19166]]
     Proposed Update to the LTCH PPS Payment Rates
and Other Payment Policies. Based on the best available data for the
384 LTCHs in our database, we estimate that the proposed changes to the
payment rates and factors that we present in the preamble of and
Addendum to this proposed rule, which reflect the end of the transition
of the statutory application of the site neutral payment rate and the
proposed update to the LTCH PPS standard Federal payment rate for FY
2020, would result in an estimated increase in payments in FY 2020 of
approximately $37 million.
     Proposed Changes to the Hospital Readmissions Reduction
Program. For FY 2020 and subsequent years, the reduction is based on a
hospital's risk-adjusted readmission rate during a 3-year period for
acute myocardial infarction (AMI), heart failure (HF), pneumonia,
chronic obstructive pulmonary disease (COPD), elective primary total
hip arthroplasty/total knee arthroplasty (THA/TKA), and coronary artery
bypass graft (CABG) surgery. Overall, in this proposed rule, we
estimate that 2,599 hospitals would have their base operating DRG
payments reduced by their determined proxy FY 2020 hospital-specific
readmission adjustment. As a result, we estimate that the Hospital
Readmissions Reduction Program would save approximately $550 million in
FY 2020.
     Value-Based Incentive Payments Under the Hospital VBP
Program. We estimate that there would be no net financial impact to the
Hospital VBP Program for the FY 2020 program year in the aggregate
because, by law, the amount available for value-based incentive
payments under the program in a given year must be equal to the total
amount of base operating MS-DRG payment amount reductions for that
year, as estimated by the Secretary. The estimated amount of base
operating MS-DRG payment amount reductions for the FY 2020 program year
and, therefore, the estimated amount available for value-based
incentive payments for FY 2020 discharges is approximately $1.9
billion.
     Proposed Changes to the HAC Reduction Program. A
hospital's Total HAC score and its ranking in comparison to other
hospitals in any given year depend on several different factors. The FY
2020 program year is the first year in which we will implement our
equal measure weights scoring methodology. Any significant impact due
to the HAC Reduction Program proposed changes for FY 2020, including
which hospitals will receive the adjustment, would depend on the actual
experience of hospitals in the Program. We also are proposing to update
the hourly wage rate associated with burden for CDC NHSN HAI validation
under the HAC Reduction Program.
     Proposed Changes to the Hospital Inpatient Quality
Reporting (IQR) Program. Across 3,300 IPPS hospitals, we estimate that
our proposed changes for the Hospital IQR Program in this proposed rule
would result in changes to the information collection burden compared
to previously adopted requirements. The only proposal that would affect
the information collection burden for the Hospital IQR Program is the
proposal to adopt the Hybrid Hospital-Wide All-Cause Readmission
(Hybrid HWR) measure (NQF #2879) in a stepwise fashion, beginning with
two voluntary reporting periods which would run from July 1, 2021
through June 30, 2022, and from July 1, 2022 through June 30, 2023,
before requiring reporting of the measure for the reporting period that
would run from July 1, 2023 through June 30, 2024, impacting the FY
2026 payment determination and for subsequent years. We estimate that
the impact of this proposed change is a total collection of information
burden increase of 2,211 hours and a total cost increase of
approximately $83,266 for all participating IPPS hospitals annually.
     Proposed Changes to the Medicare and Medicaid Promoting
Interoperability Programs. We believe that, overall, the proposals in
this proposed rule would reduce burden, as described in detail in
section X.B.9. of the preamble and Appendix A, section I.N. of this
proposed rule.
B. Background Summary
1. Acute Care Hospital Inpatient Prospective Payment System (IPPS)
    Section 1886(d) of the Social Security Act (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 a new 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. 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.
    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.
    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)
[[Page 19167]]
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 2022. Through and including FY
2006, an MDH received the higher of the Federal rate or the Federal
rate plus 50 percent of the amount by which the Federal rate was
exceeded by the higher of its FY 1982 or FY 1987 hospital-specific
rate. For discharges occurring on or after October 1, 2007, but before
October 1, 2022, 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 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). During the 5-year (optional) transition period,
a LTCH's payment under the PPS was based on an increasing proportion of
the LTCH Federal rate with a corresponding decreasing proportion based
on reasonable cost principles. Effective for cost reporting periods
beginning on or after October 1, 2006 through September 30, 2015 all
LTCHs were paid 100 percent of the Federal rate. 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,
based on a rolling effective date that is linked to the date on which a
given LTCH's Federal FY 2016 cost reporting period begins, 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 (73 FR 26797 through 26798).
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 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
[[Page 19168]]
various types of hospitals are located in 42 CFR part 413.
C. Summary of Provisions of Recent Legislation That Would Be
Implemented in This Proposed Rule
1. Pathway for SGR Reform Act of 2013 (Pub. L. 113-67)
    The Pathway for SGR Reform Act of 2013 (Pub. L. 113-67) introduced
new payment rules in the LTCH PPS. Under section 1206 of this law,
discharges in cost reporting periods beginning on or after October 1,
2015, under the LTCH PPS, receive payment under a site neutral rate
unless the discharge meets certain patient-specific criteria. In this
proposed rule, we are proposing to continue to update certain policies
that implemented provisions under section 1206 of the Pathway for SGR
Reform Act.
2. Improving Medicare Post-Acute Care Transformation Act of 2014
(IMPACT Act) (Pub. L. 113-185)
    The Improving Medicare Post-Acute Care Transformation Act of 2014
(IMPACT Act) (Pub. L. 113-185), enacted on October 6, 2014, made a
number of changes that affect the Long-Term Care Hospital Quality
Reporting Program (LTCH QRP). In this proposed rule, we are proposing
to continue to implement portions of section 1899B of the Act, as added
by section 2(a) of the IMPACT Act, which, in part, requires LTCHs,
among other post-acute care providers, to report standardized patient
assessment data, data on quality measures, and data on resource use and
other measures.
3. The Medicare Access and CHIP Reauthorization Act of 2015 (Pub. L.
114-10)
    Section 414 of the Medicare Access and CHIP Reauthorization Act of
2015 (MACRA, Pub. L. 114-10) specifies a 0.5 percent positive
adjustment to the standardized amount of Medicare payments to acute
care hospitals for FYs 2018 through 2023. These adjustments follow the
recoupment adjustment to the standardized amounts under section 1886(d)
of the Act based upon the Secretary's estimates for discharges
occurring from FYs 2014 through 2017 to fully offset $11 billion, in
accordance with section 631 of the ATRA. The FY 2018 adjustment was
subsequently adjusted to 0.4588 percent by section 15005 of the 21st
Century Cures Act.
4. The 21st Century Cures Act (Pub. L. 114-255)
    The 21st Century Cures Act (Pub. L. 114-255), enacted on December
13, 2016, contained the following provision affecting payments under
the Hospital Readmissions Reduction Program, which we are proposing to
continue to implement in this proposed rule:
     Section 15002, which amended section 1886(q)(3) of the Act
by adding subparagraphs (D) and (E), which requires the Secretary to
develop a methodology for calculating the excess readmissions
adjustment factor for the Hospital Readmissions Reduction Program based
on cohorts defined by the percentage of dual-eligible patients (that
is, patients who are eligible for both Medicare and full-benefit
Medicaid coverage) cared for by a hospital. In this proposed rule, we
are proposing to continue to implement changes to the payment
adjustment factor to assess penalties based on a hospital's
performance, relative to other hospitals treating a similar proportion
of dual-eligible patients.
D. Summary of the Provisions of This Proposed Rule
    In this proposed rule, we set forth proposed payment and policy
changes to the Medicare IPPS for FY 2020 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 2020.
    Below is a general summary of the changes that we are proposing to
make in this proposed rule.
1. Proposed Changes to MS-DRG Classifications and Recalibrations of
Relative Weights
    In section II. of the preamble of this proposed rule, we include--
     Proposed changes to MS-DRG classifications based on our
yearly review for FY 2020.
     Proposed adjustment to the standardized amounts under
section 1886(d) of the Act for FY 2020 in accordance with the
amendments made to section 7(b)(1)(B) of Public Law 110-90 by section
414 of the MACRA.
     Proposed recalibration of the MS-DRG relative weights.
     A discussion of the proposed FY 2020 status of new
technologies approved for add-on payments for FY 2019 and a
presentation of our evaluation and analysis of the FY 2020 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).
     A request for public comments on the substantial clinical
improvement criterion used to evaluate applications for both the IPPS
new technology add-on payments and the OPPS transitional pass-through
payment for devices, and a discussion of potential revisions that we
are considering adopting as final policies related to the substantial
clinical improvement criterion for applications received beginning in
FY 2020 for the IPPS (that is, for FY 2021 and later new technology
add-on payments) and beginning in CY 2020 for the OPPS.
     A proposed alternative IPPS new technology add-on payment
pathway for certain transformative new devices.
     Proposed changes to the calculation of the IPPS new
technology add-on payment.
2. Proposed Changes to the Hospital Wage Index for Acute Care Hospitals
    In section III. of the preamble to this proposed rule, we are
proposing to make 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 2020 wage index update using wage data
from cost reporting periods beginning in FY 2016.
     Proposals to address wage index disparities between high
and low wage index hospitals.
     Calculation, analysis, and implementation of the proposed
occupational mix adjustment to the wage index for acute care hospitals
for FY 2020 based on the 2016 Occupational Mix Survey.
     Proposed application of the rural floor and the frontier
State floor.
     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 change to Lugar county assignments.
     Proposed adjustment to the wage index for acute care
hospitals for FY 2020 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 2020 wage
index.
3. Other Decisions and Proposed Changes to the IPPS for Operating Costs
    In section IV. of the preamble of this proposed rule, we discuss
proposed changes or clarifications of a number of the provisions of the
regulations in 42
[[Page 19169]]
CFR parts 412 and 413, including the following:
     Proposed changes to MS-DRGs subject to the postacute care
transfer policy and special payment policy.
     Proposed changes to the inpatient hospital update for FY
2020.
     Proposed conforming changes to the regulations for the
low-volume hospital payment adjustment policy.
     Proposed updated national and regional case-mix values and
discharges for purposes of determining RRC status.
     The statutorily required IME adjustment factor for FY
2020.
     Proposed changes to the methodologies for determining
Medicare DSH payments and the additional payments for uncompensated
care.
     A request for public comments on PRRB appeals related to a
hospital's Medicaid fraction in the DSH payment adjustment calculation.
     Proposed changes to the policies for payment adjustments
under the Hospital Readmissions Reduction Program based on hospital
readmission measures and the process for hospital review and correction
of those rates for FY 2020.
     Proposed changes to the requirements and provision of
value-based incentive payments under the Hospital Value-Based
Purchasing Program.
     Proposed requirements for payment adjustments to hospitals
under the HAC Reduction Program for FY 2020.
     Proposed changes related to CAHs as nonproviders for
direct GME and IME payment purposes.
     Discussion of and proposals relating to the implementation
of the Rural Community Hospital Demonstration Program in FY 2020.
4. Proposed FY 2020 Policy Governing the IPPS for Capital-Related Costs
    In section V. of the preamble to this proposed rule, we discuss the
proposed payment policy requirements for capital-related costs and
capital payments to hospitals for FY 2020.
5. Proposed Changes to the Payment Rates for Certain Excluded
Hospitals: Rate-of-Increase Percentages
    In section VI. of the preamble of this proposed rule, we discuss--
     Proposed changes to payments to certain excluded hospitals
for FY 2020.
     Proposed change related to CAH payment for ambulance
services.
     Proposed continued implementation of the Frontier
Community Health Integration Project (FCHIP) Demonstration.
6. Proposed Changes to the LTCH PPS
    In section VII. of the preamble of this 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
2020.
     Proposed payment adjustment for discharges of LTCHs that
do not meet the applicable discharge payment percentage.
7. Proposed Changes Relating to Quality Data Reporting for Specific
Providers and Suppliers
    In section VIII. of the preamble of this proposed rule, we
address--
     Proposed requirements for the Hospital Inpatient Quality
Reporting (IQR) Program.
     Proposed changes to the requirements for the quality
reporting program for PPS-exempt cancer hospitals (PCHQR Program).
     Proposed changes to the requirements under the LTCH
Quality Reporting Program (LTCH QRP).
     Proposed changes to requirements pertaining to eligible
hospitals and CAHs participating in the Medicare and Medicaid Promoting
Interoperability Programs.
8. Provider Reimbursement Review Board Appeals
    In section XI. of the preamble of this proposed rule, we discuss
the growing number of Provider Reimbursement Review Board appeals made
by providers and the action initiatives that are being implemented with
the goal to: decrease the number of appeals submitted; decrease the
number of appeals in inventory; reduce the time to resolution; and
increase customer satisfaction.
9. Determining Prospective Payment Operating and Capital Rates and
Rate-of-Increase Limits for Acute Care Hospitals
    In sections II. and III. of the Addendum to this proposed rule, we
set forth the proposed changes to the amounts and factors for
determining the proposed FY 2020 prospective payment rates for
operating costs and capital-related costs for acute care hospitals. We
are proposing to establish the threshold amounts for outlier cases,
including a proposed change to the methodology for calculating those
threshold amounts for FY 2020 to incorporate a projection of outlier
payment reconciliations. In addition, in section IV. of the Addendum to
this proposed rule, we address the update factors for determining the
rate-of-increase limits for cost reporting periods beginning in FY 2020
for certain hospitals excluded from the IPPS.
10. Determining Prospective Payment Rates for LTCHs
    In section V. of the Addendum to this proposed rule, we set forth
proposed changes to the amounts and factors for determining the
proposed FY 2020 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
2020. We are proposing to establish the adjustments for wage levels,
the 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.
11. Impact Analysis
    In Appendix A of this proposed rule, we set forth an analysis of
the impact the proposed changes would have on affected acute care
hospitals, CAHs, LTCHs, and PCHs.
12. Recommendation of Update Factors for Operating Cost Rates of
Payment for Hospital Inpatient Services
    In Appendix B of this 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 2020 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.
13. 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 2019 recommendations concerning hospital inpatient
payment policies addressed the update factor for hospital inpatient
operating costs and capital-related costs for hospitals under the IPPS.
We address these
[[Page 19170]]
recommendations in Appendix B of this proposed rule. For further
information relating specifically to the MedPAC March 2019 report or to
obtain a copy of the report, contact MedPAC at (202) 220-3700 or visit
MedPAC's website at: http://www.medpac.gov.
E. Advancing Health Information Exchange
    The Department of Health and Human Services (HHS) has a number of
initiatives designed to encourage and support the adoption of
interoperable health information technology and to promote nationwide
health information exchange to improve health care. The Office of the
National Coordinator for Health Information Technology (ONC) and CMS
work collaboratively to advance interoperability across settings of
care, including post-acute care.
    To further interoperability in post-acute care, we developed a Data
Element Library (DEL) to serve as a publicly available centralized,
authoritative resource for standardized data elements and their
associated mappings to health IT standards. The DEL furthers CMS' goal
of data standardization and interoperability, which is also a goal of
the IMPACT Act. These interoperable data elements can reduce provider
burden by allowing the use and exchange of health care data, support
provider exchange of electronic health information for care
coordination, person-centered care, and support real-time, data driven,
clinical decision making. Standards in the Data Element Library
(https://del.cms.gov/) can be referenced on the CMS website and in the
ONC Interoperability Standards Advisory (ISA). The 2019 ISA is
available at: https://www.healthit.gov/isa.
    The 21st Century Cures Act (the Cures Act) (Pub. L. 114-255,
enacted December 13, 2016) requires HHS to take new steps to enable the
electronic sharing of health information ensuring interoperability for
providers and settings across the care continuum. In an important
provision, Congress defined ``information blocking'' as practices
likely to interfere with, prevent, or materially discourage access,
exchange, or use of electronic health information, and established new
authority for HHS to discourage these practices. In March 2019, ONC and
CMS published the proposed rules, ``21st Century Cures Act:
Interoperability, Information Blocking, and the ONC Health IT
Certification Program'' (84 FR 7424 through 7610) and
``Interoperability and Patient Access'' (84 FR 7610 through 7680), to
promote secure and more immediate access to health information for
patients and health care providers through the implementation of
information blocking provisions of the Cures Act and the use of
standardized application programming interfaces (APIs) that enable
easier access to electronic health information. These two proposed
rules are open for public comments at: www.regulations.gov.
    We invite providers to learn more about these important
developments and how they are likely to affect hospitals paid under the
IPPS and the LTCH PPS.
II. Proposed 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 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. MS-DRG Reclassifications
    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/RY 2010 LTCH PPS final rule (74 FR
43764 through 43766) and the FYs 2011 through 2019 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, and 83 FR 41158 through 41258,
respectively).
C. Adoption of the MS-DRGs in FY 2008
    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).
D. Proposed FY 2020 MS-DRG Documentation and Coding Adjustment
1. Background on the Prospective MS-DRG Documentation and Coding
Adjustments for FY 2008 and FY 2009 Authorized by Public Law 110-90 and
the Recoupment or Repayment Adjustment Authorized by Section 631 of the
American Taxpayer Relief Act of 2012 (ATRA)
    In the FY 2008 IPPS final rule with comment period (72 FR 47140
through 47189), we adopted the MS-DRG patient classification system for
the IPPS, effective October 1, 2007, to better recognize severity of
illness in Medicare payment rates for acute care hospitals. The
adoption of the MS-DRG system resulted in the expansion of the number
of DRGs from 538 in FY 2007 to 745 in FY 2008. By increasing the number
of MS-DRGs and more fully taking into account patient severity of
illness in Medicare payment rates for acute care hospitals, MS-DRGs
encourage hospitals to improve their documentation and coding of
patient diagnoses.
    In the FY 2008 IPPS final rule with comment period (72 FR 47175
through 47186), we indicated that the adoption of the MS-DRGs had the
potential to lead to increases in aggregate payments without a
corresponding increase in actual patient severity of illness due to the
incentives for additional documentation and coding. In that final rule
with comment period, we exercised our authority under section
1886(d)(3)(A)(vi) of the Act, which authorizes us to maintain budget
neutrality by adjusting the national standardized amount, to eliminate
the estimated effect of changes in coding or classification that do not
reflect real changes in case-mix. Our actuaries estimated that
maintaining budget neutrality required an adjustment of -4.8 percentage
points to the national standardized amount. We provided for phasing in
this -4.8 percentage point adjustment over 3 years. Specifically, we
established prospective documentation and coding adjustments of -1.2
percentage points for FY 2008, -1.8 percentage points for FY 2009, and
-1.8 percentage points for FY 2010.
    On September 29, 2007, Congress enacted the TMA [Transitional
Medical Assistance], Abstinence Education, and
[[Page 19171]]
QI [Qualifying Individuals] Programs Extension Act of 2007 (Pub. L.
110-90). Section 7(a) of Public Law 110-90 reduced the documentation
and coding adjustment made as a result of the MS-DRG system that we
adopted in the FY 2008 IPPS final rule with comment period to -0.6
percentage point for FY 2008 and -0.9 percentage point for FY 2009.
    As discussed in prior year rulemakings, and most recently in the FY
2017 IPPS/LTCH PPS final rule (81 FR 56780 through 56782), we
implemented a series of adjustments required under sections 7(b)(1)(A)
and 7(b)(1)(B) of Public Law 110-90, based on a retrospective review of
FY 2008 and FY 2009 claims data. We completed these adjustments in FY
2013 but indicated in the FY 2013 IPPS/LTCH PPS final rule (77 FR 53274
through 53275) that delaying full implementation of the adjustment
required under section 7(b)(1)(A) of Public Law 110-90 until FY 2013
resulted in payments in FY 2010 through FY 2012 being overstated, and
that these overpayments could not be recovered under Public Law 110-90.
    In addition, as discussed in prior rulemakings and most recently in
the FY 2018 IPPS/LTCH PPS final rule (82 FR 38008 through 38009),
section 631 of the ATRA amended section 7(b)(1)(B) of Public Law 110-90
to require the Secretary to make a recoupment adjustment or adjustments
totaling $11 billion by FY 2017. This adjustment represented the amount
of the increase in aggregate payments as a result of not completing the
prospective adjustment authorized under section 7(b)(1)(A) of Public
Law 110-90 until FY 2013.
2. Adjustments Made for FY 2018 and FY 2019 as Required Under Section
414 of Public Law 114-10 (MACRA) and Section 15005 of Public Law 114-
255
    As stated in the FY 2017 IPPS/LTCH PPS final rule (81 FR 56785),
once the recoupment required under section 631 of the ATRA was
complete, we had anticipated making a single positive adjustment in FY
2018 to offset the reductions required to recoup the $11 billion under
section 631 of the ATRA. However, section 414 of the MACRA (which was
enacted on April 16, 2015) replaced the single positive adjustment we
intended to make in FY 2018 with a 0.5 percentage point positive
adjustment for each of FYs 2018 through 2023. In the FY 2017
rulemaking, we indicated that we would address the adjustments for FY
2018 and later fiscal years in future rulemaking. Section 15005 of the
21st Century Cures Act (Pub. L. 114-255), which was enacted on December
13, 2016, amended section 7(b)(1)(B) of the TMA, as amended by section
631 of the ATRA and section 414 of the MACRA, to reduce the adjustment
for FY 2018 from a 0.5 percentage point positive adjustment to a 0.4588
percentage point positive adjustment. As we discussed in the FY 2018
rulemaking, we believe the directive under section 15005 of Public Law
114-255 is clear. Therefore, in the FY 2018 IPPS/LTCH PPS final rule
(82 FR 38009) for FY 2018, we implemented the required +0.4588
percentage point adjustment to the standardized amount. In the FY 2019
IPPS/LTCH PPS final rule (83 FR 41157), consistent with the
requirements of section 414 of the MACRA, we implemented a 0.5
percentage point positive adjustment to the standardized amount for FY
2019. We indicated that both the FY 2018 and FY 2019 adjustments were
permanent adjustments to payment rates. We also stated that we plan to
propose future adjustments required under section 414 of the MACRA for
FYs 2020 through 2023 in future rulemaking.
3. Proposed Adjustment for FY 2020
    Consistent with the requirements of section 414 of the MACRA, we
are proposing to implement a 0.5 percentage point positive adjustment
to the standardized amount for FY 2020. This would constitute a
permanent adjustment to payment rates. We plan to propose future
adjustments required under section 414 of the MACRA for FYs 2021
through 2023 in future rulemaking.
E. Refinement of the MS-DRG Relative Weight Calculation
1. Background
    Beginning in FY 2007, we implemented relative weights for DRGs
based on cost report data instead of charge information. We refer
readers to the FY 2007 IPPS final rule (71 FR 47882) for a detailed
discussion of our final policy for calculating the cost-based DRG
relative weights and to the FY 2008 IPPS final rule with comment period
(72 FR 47199) for information on how we blended relative weights based
on the CMS DRGs and MS-DRGs. We also refer readers to the FY 2017 IPPS/
LTCH PPS final rule (81 FR 56785 through 56787) for a detailed
discussion of the history of changes to the number of cost centers used
in calculating the DRG relative weights. Since FY 2014, we have
calculated the IPPS MS-DRG relative weights using 19 CCRs, which now
include distinct CCRs for implantable devices, MRIs, CT scans, and
cardiac catheterization.
2. Discussion of Policy for FY 2020
    Consistent with our established policy, we are calculating the
proposed MS-DRG relative weights for FY 2020 using two data sources:
The MedPAR file as the claims data source and the HCRIS as the cost
report data source. We adjust the charges from the claims to costs by
applying the 19 national average CCRs developed from the cost reports.
The description of the calculation of the proposed 19 CCRs and the
proposed MS-DRG relative weights for FY 2020 is included in section
II.G. of the preamble to this FY 2020 IPPS/LTCH PPS proposed rule. As
we did with the FY 2019 IPPS/LTCH PPS final rule, for this FY 2020
proposed rule, we are providing the version of the HCRIS from which we
calculated these proposed 19 CCRs on the CMS website at: http://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 2020 IPPS Proposed Rule Home Page'' or ``Acute
Inpatient Files for Download.''
F. Proposed Changes to Specific MS-DRG Classifications
1. Discussion of Changes to Coding System and Basis for Proposed FY
2020 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 Proposed FY 2020 MS-DRG Updates
    CMS has previously encouraged input from our stakeholders
concerning the annual IPPS updates when that input was made available
to us by December
[[Page 19172]]
7 of the year prior to the next annual proposed rule update. As
discussed in the FY 2018 IPPS/LTCH PPS final rule (82 FR 38010), as we
work with the public to examine the ICD-10 claims data used for updates
to the ICD-10 MS DRGs, we would like to examine areas where the MS-DRGs
can be improved, which will require additional time for us to review
requests from the public to make specific updates, analyze claims data,
and consider any proposed updates. Given the need for more time to
carefully evaluate requests and propose updates, we changed the
deadline to request updates to the MS-DRGs to November 1 of each year.
This will provide an additional 5 weeks for the data analysis and
review process. Interested parties had to submit any comments and
suggestions for FY 2020 by November 1, 2018, and should submit any
comments and suggestions for FY 2021 by November 1, 2019 via the CMS
MS-DRG Classification Change Request Mailbox located at:
[email protected]. The comments that were submitted
in a timely manner for FY 2020 are discussed in this section of the
preamble of this proposed rule. As we discuss in the sections that
follow, 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.
    Following are the changes that we are proposing to the MS-DRGs for
FY 2020. We are inviting 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 this proposed
rule. In some cases, we are proposing changes to the MS-DRG
classifications based on our analysis of claims data and consultation
with our clinical advisors. In other cases, we are proposing to
maintain the existing MS-DRG classifications based on our analysis of
claims data and consultation with our clinical advisors. For this FY
2020 IPPS/LTCH PPS proposed rule, our MS-DRG analysis was based on ICD-
10 claims data from the September 2018 update of the FY 2018 MedPAR
file, which contains hospital bills received through September 30,
2018, for discharges occurring through September 30, 2018. In our
discussion of the proposed MS-DRG reclassification changes, we refer to
these claims data as the ``September 2018 update of the FY 2018 MedPAR
file.''
    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 the judgment
of our clinical advisors 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 our examination of the claims data, we apply the following
criteria established in FY 2008 (72 FR 47169) to determine if the
creation of a new complication or comorbidity (CC) or major
complication or comorbidity (MCC) subgroup within a base MS-DRG is
warranted:
     A reduction in variance of costs of at least 3 percent;
     At least 5 percent of the patients in the MS-DRG fall
within the CC or MCC subgroup;
     At least 500 cases are in the CC or MCC subgroup;
     There is at least a 20-percent difference in average costs
between subgroups; and
     There is a $2,000 difference in average costs between
subgroups.
    In order to warrant creation of a CC or MCC subgroup within a base
MS-DRG, the subgroup must meet all five of the criteria.
2. Pre-MDC
a. Peripheral ECMO
    In the FY 2019 IPPS/LTCH PPS final rule (83 FR 41166 through
41169), we discussed a request we received to review cases reporting
the use of extracorporeal membrane oxygenation (ECMO) in combination
with the insertion of a percutaneous short-term external heart assist
device. We also noted that a separate request to create a new ICD-10-
PCS procedure code specifically for percutaneous ECMO was discussed at
the March 6-7, 2018 ICD-10 Coordination and Maintenance Committee
Meeting for which we finalized the creation of three new procedure
codes to identify and describe different types of ECMO treatments
currently being utilized. These three new procedure codes were included
in the FY 2019 ICD-10-PCS procedure codes files (which are available
via the internet on the CMS website at: https://www.cms.gov/Medicare/Coding/ICD10/2019-ICD-10-PCS.html) and were made publicly available in
May 2018. We received recommendations from commenters on suggested MS-
DRG assignments for the two new procedure codes that uniquely identify
percutaneous (peripheral) ECMO, including assignment to MS-DRG 215
(Other Heart Assist System Implant), or to Pre-MDC MS-DRG 004
(Tracheostomy with Mechanical Ventilation >96 Hours or Principal
Diagnosis Except Face, Mouth and Neck without Major O.R. Procedure)
specifically for the new procedure code describing percutaneous veno-
venous (VV) ECMO or an alternate MS-DRG within MDC 4 (Diseases and
Disorders of the Respiratory System). In our response, we noted that
because these codes were not finalized at the time of the proposed
rule, there were no proposed MDC or MS-DRG assignments or O.R. and non-
O.R. designations for these new procedure codes and they were not
reflected in Table 6B.--New Procedure Codes (which is available via the
internet on the CMS website at: http://www.cms.hhs.gov/Medicare/Medicare-Fee-for-Service-Payment/AcuteInpatientPPS/index.html)
associated with the FY 2019 IPPS/LTCH PPS proposed rule.
    We further noted that, consistent with our annual process of
assigning new procedure codes to MDCs and MS-DRGs, and designating a
procedure as an O.R. or non-O.R. procedure, we reviewed the predecessor
procedure code assignment. For the reasons discussed in the FY 2019
IPPS/LTCH PPS final rule, our clinical advisors did not support
assigning the new procedure codes for the percutaneous (peripheral)
ECMO procedures to the same MS-DRG as the predecessor code for open
(central) ECMO in pre-MDC MS-DRG 003.
[[Page 19173]]
    Effective with discharges occurring on and after October 1, 2018,
the three ECMO procedure codes and their corresponding MS-DRG
assignments are as shown in the following table.
----------------------------------------------------------------------------------------------------------------
       ICD-10-PCS code            Code description                 MS-DRG                 MS-DRG description
----------------------------------------------------------------------------------------------------------------
5A1522F......................  Extracorporeal          Pre-MDC......................  ECMO or Tracheostomy with
                                Oxygenation,           MS-DRG 003...................   Mechanical Ventilation
                                Membrane, Central.                                     >96 Hours or Principal
                                                                                       Diagnosis Except Face,
                                                                                       Mouth and Neck with Major
                                                                                       O.R. Procedure.
5A1522G......................  Extracorporeal          MS-DRG 207...................  Respiratory System
                                Oxygenation,                                           Diagnosis with Ventilator
                                Membrane, Peripheral                                   Support >96 Hours or
                                Veno-arterial.                                         Peripheral Extracorporeal
                                                                                       Membrane Oxygenation
                                                                                       (ECMO).
                                                       MS-DRG 291...................  Heart Failure and Shock
                                                                                       with MCC or Peripheral
                                                                                       Extracorporeal Membrane
                                                                                       Oxygenation (ECMO).
                                                       MS-DRG 296...................  Cardiac Arrest,
                                                                                       Unexplained with MCC or
                                                                                       Peripheral Extracorporeal
                                                                                       Membrane Oxygenation
                                                                                       (ECMO).
                                                       MS-DRG 870...................  Septicemia Or Severe
                                                                                       Sepsis with Mechanical
                                                                                       Ventilation >96 Hours Or
                                                                                       Peripheral Extracorporeal
                                                                                       Membrane Oxygenation
                                                                                       (ECMO).
5A1522H......................  Extracorporeal          MS-DRG 207...................  Respiratory System
                                Oxygenation,                                           Diagnosis with Ventilator
                                Membrane, Peripheral                                   Support >96 Hours or
                                Veno-venous.                                           Peripheral Extracorporeal
                                                                                       Membrane Oxygenation
                                                                                       (ECMO).
                                                       MS-DRG 291...................  Heart Failure and Shock
                                                                                       with MCC or Peripheral
                                                                                       Extracorporeal Membrane
                                                                                       Oxygenation (ECMO).
                                                       MS-DRG 296...................  Cardiac Arrest,
                                                                                       Unexplained with MCC or
                                                                                       Peripheral Extracorporeal
                                                                                       Membrane Oxygenation
                                                                                       (ECMO).
                                                       MS-DRG 870...................  Septicemia Or Severe
                                                                                       Sepsis with Mechanical
                                                                                       Ventilation >96 Hours Or
                                                                                       Peripheral Extracorporeal
                                                                                       Membrane Oxygenation
                                                                                       (ECMO).
----------------------------------------------------------------------------------------------------------------
    After publication of the FY 2019 IPPS/LTCH PPS final rule, we
received comments and feedback from stakeholders expressing concern
with the MS-DRG assignments for the two new procedure codes describing
peripheral ECMO. Specifically, these stakeholders stated that: (1) The
MS-DRG assignments for ECMO should not be based on how the patient is
cannulated (open versus peripheral) because most of the costs for both
central and peripheral ECMO can be attributed to the severity of
illness of the patient; (2) there was a lack of opportunity for public
comment on the finalized MS-DRG assignments; (3) patient access to ECMO
treatment and programs is now at risk because of inadequate payment;
and (4) CMS did not appear to have access to enough patient data to
evaluate for appropriate MS-DRG assignment consideration. They also
stated that the new procedure codes do not account for an open cut-down
approach that may be performed on a peripheral vessel during a
peripheral ECMO procedure. These stakeholders recommended that,
consistent with the usual process of assigning new procedure codes to
the same MS-DRG as the predecessor code, the MS-DRG assignment for
peripheral ECMO procedures should be revised to allow assignment of
peripheral ECMO procedures to Pre-MDC MS-DRG 003 (ECMO or Tracheostomy
with Mechanical Ventilation >96 Hours or Principal Diagnosis Except
Face, Mouth and Neck with Major O.R. Procedure). They stated that this
revision would also allow for the collection of further claims data for
patients treated with ECMO and assist in determining the
appropriateness of any future modifications in MS-DRG assignment.
    We also received feedback from a few stakeholders that, for some
cases involving peripheral ECMO, the current designation provides
compensation that these stakeholders believe is ``reasonable'' (for
example, for peripheral ECMO in certain patients admitted with acute
respiratory failure and sepsis). Some of these stakeholders agreed with
CMS that once claims data become available, the volume, length of stay
and cost data of claims with these new codes can be examined to
determine if modifications to MS-DRG assignment or O.R. and non-O.R.
designation are warranted. However, some of these stakeholders also
expressed concerns that the current assignments and designation do not
appropriately compensate for the resources used when peripheral ECMO is
used to treat certain patients (for example, patients who are admitted
with cardiac arrest and cardiogenic shock of known cause or patients
admitted with a different principal diagnosis or patients who develop a
diagnosis after admission that requires ECMO). These stakeholders
stated that the current MS-DRG assignments for such cases involving
peripheral ECMO do not provide sufficient payment and do not fully
consider the severity of illness of the patient and the level of
resources involved in treating such patients, such as surgical team,
general anesthesia, and other ECMO support such as specialized
monitoring.
    With regard to stakeholders' concerns that we did not allow the
opportunity for public comment on the MS-DRG assignment for the three
new procedure codes that describe central and peripheral ECMO, as noted
above and as explained in the FY 2019 IPPS/LTCH PPS final rule (83 FR
41168), these new procedure codes were not finalized at the time of the
proposed rule. We note that although there were no proposed MDC or MS-
DRG assignment or O.R. and non-O.R. designations for these three new
procedure codes, we did, in fact, review and respond to comments on the
recommended MDC and MS-DRG assignments and O.R./non-O.R. designations
in the final rule (83 FR 41168 through 41169). For FY 2019, consistent
with our annual process of assigning new procedure codes to MDCs and
MS-DRGs and designating a procedure as an O.R. or non-O.R. procedure,
we reviewed the predecessor procedure code assignments. Upon completing
the review, our clinical advisors did not support assigning the two new
ICD-10-PCS procedure codes for peripheral ECMO procedures to the same
MS-DRG as the predecessor code for open (central) ECMO procedures.
Further, our clinical advisors also did not agree with designating
peripheral
[[Page 19174]]
ECMO procedures as O.R. procedures because they stated that these
procedures are less resource intensive compared to open ECMO
procedures.
    As noted, our annual process for assigning new procedure codes
involves review of the predecessor procedure code's MS-DRG assignment.
However, this process does not automatically result in the new
procedure code being assigned (or proposed for assignment) to the same
MS-DRG as the predecessor code. There are several factors to consider
during this process that our clinical advisors take into account. For
example, in the absence of volume, length of stay, and cost data, they
may consider the specific service, procedure, or treatment being
described by the new procedure code, the indications, treatment
difficulty, and the resources utilized. We have continued to consider
how these and other factors may apply in the context of classifying
procedures under the ICD-10 MS-DRGs, including with regard to the
specific concerns raised by stakeholders.
    In the absence of claims data for the new ICD-10-PCS procedure
codes describing peripheral ECMO, we analyzed claims data from the
September 2018 update of the FY 2018 MedPAR file for cases reporting
the predecessor ICD-10-PCS procedure code 5A15223 (Extracorporeal
membrane oxygenation, continuous) in Pre-MDC MS-DRG 003, including
those cases reporting secondary diagnosis MCC and CC conditions, that
were grouped under the ICD-10 MS-DRG Version 35 GROUPER. Our findings
are shown in the table below.
----------------------------------------------------------------------------------------------------------------
                                                                     Number of    Average length
                             MS-DRG                                    cases          of stay      Average costs
----------------------------------------------------------------------------------------------------------------
MS-DRG 003--All cases...........................................          14,456            29.6        $122,168
MS-DRG 003--Cases reporting procedure code 5A15223                         2,086            20.2         128,168
 (Extracorporeal membrane oxygenation, continuous)..............
MS-DRG 003--Cases reporting procedure code 5A15223                         2,000            20.7         131,305
 (Extracorporeal membrane oxygenation, continuous) with MCC.....
MS-DRG 003--Cases reporting procedure code 5A15223                            79             7.6          58,231
 (Extracorporeal membrane oxygenation, continuous) with CC......
----------------------------------------------------------------------------------------------------------------
    The total number of cases reported in MS-DRG 003 was 14,456, with
an average length of stay of 29.6 days and average costs of $122,168.
For the cases reporting procedure code 5A15223 (Extracorporeal membrane
oxygenation, continuous), there was a total of 2,086 cases, with an
average length of stay of 20.2 days and average costs of $128,168. For
the cases reporting procedure code 5A15223 with an MCC, there was a
total of 2,000 cases, with an average length of stay of 20.7 days and
average costs of $131,305. For the cases reporting procedure code
5A15223 with a CC, there was a total of 79 cases, with an average
length of stay of 7.6 days and average costs of $58,231.
    Our clinical advisors reviewed these data and noted that the
average length of stay for the cases reporting ECMO with procedure code
5A15223 of 20.2 days may not necessarily be a reliable indicator of
resources that can be attributed to ECMO treatment. Our clinical
advisors believed that a more appropriate measure of resource
consumption for ECMO would be the number of hours or days that a
patient was specifically receiving ECMO treatment, rather than the
length of hospital stay. However, they noted that this information is
not currently available in the claims data. Our clinical advisors also
stated that the average costs of $128,168 for the cases reporting ECMO
with procedure code 5A15223 are not necessarily reflective of the
resources utilized for ECMO treatment alone, as the average costs
represent a combination of factors, including the principal diagnosis,
any secondary diagnosis CC and/or MCC conditions necessitating
initiation of ECMO, and potentially any other procedures that may be
performed during the hospital stay. Our clinical advisors recognized
that patients who require ECMO treatment are severely ill and
recommended we review the claims data to identify the number
(frequency) and types of principal and secondary diagnosis CC and/or
MCC conditions that were reported among the 2,086 cases reporting
procedure code 5A15223. Our findings are shown in the following tables
for the top 10 principal diagnosis codes, followed by the top 10
secondary diagnosis MCC and secondary diagnosis CC conditions that were
reported within the claims data with procedure code 5A15223.
  Top 10 Principal Diagnosis Codes Reported With Procedure Code 5A1223
            [Extracorporeal membrane oxygenation, continuous]
------------------------------------------------------------------------
                                                             Number of
       ICD-10-CM code                 Description         times reported
------------------------------------------------------------------------
A41.9.......................  Sepsis, unspecified                    145
                               organism.
I21.4.......................  Non-ST elevation (NSTEMI)              137
                               myocardial infarction.
I35.0.......................  Nonrheumatic aortic                     81
                               (valve) stenosis.
J84.112.....................  Idiopathic pulmonary                    68
                               fibrosis.
I25.110.....................  Atherosclerotic heart                   55
                               disease of native
                               coronary artery with
                               unstable angina pectoris.
J96.01......................  Acute respiratory failure               52
                               with hypoxia.
I21.09......................  STEMI involving other                   49
                               coronary artery of
                               anterior wall.
I25.10......................  Atherosclerotic heart                   48
                               disease of native
                               coronary artery w/o
                               angina pectoris.
I13.0.......................  Hypertensive heart &                    46
                               chronic kidney disease w
                               heart failure and stage 1
                               through stage 4 chronic
                               kidney disease, or
                               unspecified chronic
                               kidney disease.
I21.19......................  ST elevation (STEMI)                    43
                               myocardial infarction
                               involving other coronary
                               artery of inferior wall.
------------------------------------------------------------------------
[[Page 19175]]
                  Top 10 Secondary Diagnosis MCC Conditions Reported With Procedure Code 5A1223
                                [Extracorporeal membrane oxygenation, continuous]
----------------------------------------------------------------------------------------------------------------
                                                                     Number of    Average length
         ICD-10-CM code                     Description           times reported      of stay      Average costs
----------------------------------------------------------------------------------------------------------------
A41.9...........................  Sepsis, unspecified organism..             322            29.7        $186,055
E43.............................  Unspecified severe protein-                220            41.5         213,742
                                   calorie malnutrition.
G93.40..........................  Encephalopathy, unspecified...             217            27.2         165,193
J18.9...........................  Pneumonia, unspecified                     220            23.5         150,242
                                   organism.
J96.01..........................  Acute respiratory failure with             944            17.9         122,614
                                   hypoxia.
J96.02..........................  Acute respiratory failure with             220            20.9         139,511
                                   hypercapnia.
K72.00..........................  Acute and subacute hepatic                 524              19         140,878
                                   failure without coma.
N17.0...........................  Acute kidney failure with                  741            26.2         162,583
                                   tubular necrosis.
R57.0...........................  Cardiogenic shock.............             448            27.7         153,878
R65.21..........................  Severe sepsis with septic                  504            29.7         177,992
                                   shock.
----------------------------------------------------------------------------------------------------------------
                  Top 10 Secondary Diagnosis CC Conditions Reported With Procedure Code 5A1223
                                [Extracorporeal membrane oxygenation, continuous]
----------------------------------------------------------------------------------------------------------------
                                                                     Number of    Average length
         ICD-10-CM code                     Description           times reported      of stay      Average costs
----------------------------------------------------------------------------------------------------------------
D62.............................  Acute posthemorrhagic anemia..           1,139            21.8        $144,033
D68.9...........................  Coagulation defect,                        402            20.5         138,417
                                   unspecified.
E87.0...........................  Hyperosmolality and                        585            26.6         162,028
                                   hypernatremia.
E87.1...........................  Hypo-osmolality and                        316            26.1         151,824
                                   hyponatremia.
E87.2...........................  Acidosis......................             937            17.3         120,881
E87.4...........................  Mixed disorder of acid-base                268              26         150,257
                                   balance.
I13.0...........................  Hypertensive heart and chronic             314            18.4         121,962
                                   kidney disease with heart
                                   failure and stage 1 through
                                   stage 4 chronic kidney
                                   disease, or unspecified
                                   chronic kidney disease.
I47.2...........................  Ventricular tachycardia.......             384            17.5         123,383
J98.11..........................  Atelectasis...................             273            26.9         158,812
N17.9...........................  Acute kidney failure,                      757            18.5         122,180
                                   unspecified.
----------------------------------------------------------------------------------------------------------------
    These data show that the conditions reported for these patients
requiring treatment with ECMO and reported with predecessor ICD-10-PCS
procedure code 5A1223 represent a greater severity of illness, present
greater treatment difficulty, have poorer prognoses, and have a greater
need for intervention. While the data analysis was based on the
conditions reported with the predecessor ICD-10-PCS procedure code
5A1223 (Extracorporeal membrane oxygenation, continuous), our clinical
advisors believe the data may provide an indication of how cases
reporting the new procedure codes describing peripheral (percutaneous)
ECMO may be represented in future claims data with regard to
indications for treatment, a patient's severity of illness, resource
utilization, and treatment difficulty.
    Based on the results of our data analysis and further review of the
cases reporting ECMO, including consideration of the stakeholders'
concerns that the MS-DRG assignments for ECMO procedures should not be
based on the method of cannulation, our clinical advisors agree that
resource consumption for both central and peripheral ECMO cases can be
primarily attributed to the severity of illness of the patient, and
that the method of cannulation is less relevant when considering the
overall resources required to treat patients on ECMO. Specifically, our
clinical advisors noted that consideration of resource consumption for
cases reporting the use of ECMO may extend well beyond the duration of
time that a patient was actively receiving ECMO treatment, which may
range anywhere from less than 24 hours to 10 days or more. As noted
above, in the absence of unique procedure codes that specify the
duration of time that a patient was receiving ECMO treatment, we cannot
ascertain from the claims data the resource use specifically
attributable to treatment with ECMO during a hospital stay. However,
when reviewing consumption of hospital resources for the cases in which
ECMO was reported during a hospital stay, the claims data clearly show
that the patients placed on ECMO typically have multiple MCC and CC
conditions. These data provide additional information on the expanding
indications for ECMO treatment as well as an indication of the
complexities and the treatment difficulty associated with these
patients. While our clinical advisors continue to believe that central
(open) ECMO may be more resource intensive and carries significant
risks for complications, including bleeding, infection, and vessel
injury because it requires an incision along the sternum (sternotomy)
and is performed for open heart surgery, they believe that the subset
of patients who require treatment with ECMO, regardless of the
cannulation method, would be similar in terms of overall hospital
resource consumption. We also note that while we do not yet have
Medicare claims data to evaluate the new peripheral ECMO procedure
codes, review of limited registry data provided by stakeholders for
patients treated with a reported peripheral ECMO procedure did not
contradict that costs for peripheral ECMO appear to be similar to the
costs of overall resources required to treat patients on ECMO
(regardless of method of cannulation) and appear to be attributable to
the severity of illness of the patient.
    With regard to stakeholders who stated that the two new procedure
codes do not account for an open cut-down approach that may be
performed on a peripheral vessel during a peripheral ECMO procedure, we
note that a request and proposal to create ICD-10-PCS codes to
differentiate between peripheral vessel percutaneous and peripheral
vessel open cutdown
[[Page 19176]]
according to the indication (VA or VV) for ECMO was discussed at the
March 5-6, 2019 ICD-10 Coordination and Maintenance Committee meeting.
We refer readers to the website at: https://www.cms.gov/Medicare/Coding/ICD9ProviderDiagnosticCodes/ICD-9-CM-C-and-M-Meeting-Materials.html for the committee meeting materials and discussion
regarding this proposal. We also note that, in this same proposal,
another coding option to add duration values to allow the reporting of
the number of hours or the number of days a patient received ECMO
during the stay was also made available for public comment.
    Upon further review and consideration of peripheral ECMO
procedures, including the indications, treatment difficulty, and the
resources utilized, for the reasons discussed above, our clinical
advisors support the assignment of the new ICD-10-PCS procedure codes
for peripheral ECMO procedures to the same MS-DRG as the predecessor
code for open (central) ECMO procedures for FY 2020. Therefore, based
on our review, including consideration of the comments and input from
our clinical advisors, we are proposing to reassign the following
procedure codes describing peripheral ECMO procedures from their
current MS-DRG assignments to Pre-MDC MS-DRG 003 (ECMO or Tracheostomy
with Mechanical Ventilation >96 Hours or Principal Diagnosis Except
Face, Mouth and Neck with Major O.R. Procedure) as shown in the table
below. If this proposal is finalized, we also would make conforming
changes to the titles for MS-DRGs 207, 291, 296, and 870 to no longer
reflect the ``or Peripheral Extracorporeal Membrane Oxygenation
(ECMO)'' terminology in the title. We note that this proposal includes
maintaining the designation of these peripheral ECMO procedures as non-
O.R. Therefore, if finalized, the procedures would be defined as non-
O.R. affecting the MS-DRG assignment for Pre-MDC MS-DRG 003.
----------------------------------------------------------------------------------------------------------------
       ICD-10-PCS code            Code description            Current MS-DRG               Proposed MS-DRG
----------------------------------------------------------------------------------------------------------------
5A1522G.....................  Extracorporeal           MS-DRG 207 (Respiratory       Pre-MDC MS-DRG 003 (ECMO or
                               Oxygenation, Membrane,   System Diagnosis with         Tracheostomy with
                               Peripheral Veno-         Ventilator Support >96        Mechanical Ventilation >96
                               arterial.                Hours or Peripheral           Hours or Principal
                                                        Extracorporeal Membrane       Diagnosis Except Face,
                                                        Oxygenation (ECMO)).          Mouth and Neck with Major
                                                                                      O.R. Procedure).
                                                       MS-DRG 291 (Heart Failure     Pre-MDC MS-DRG 003 (ECMO or
                                                        and Shock with MCC or         Tracheostomy with
                                                        Peripheral Extracorporeal     Mechanical Ventilation >96
                                                        Membrane Oxygenation          Hours or Principal
                                                        (ECMO)).                      Diagnosis Except Face,
                                                                                      Mouth and Neck with Major
                                                                                      O.R. Procedure).
                                                       MS-DRG 296 (Cardiac Arrest,   Pre-MDC MS-DRG 003 (ECMO or
                                                        Unexplained with MCC or       Tracheostomy with
                                                        Peripheral Extracorporeal     Mechanical Ventilation >96
                                                        Membrane Oxygenation          Hours or Principal
                                                        (ECMO)).                      Diagnosis Except Face,
                                                                                      Mouth and Neck with Major
                                                                                      O.R. Procedure).
                                                       MS-DRG 870 (Septicemia or     Pre-MDC MS-DRG 003 (ECMO or
                                                        Severe Sepsis with            Tracheostomy with
                                                        Mechanical Ventilation >96    Mechanical Ventilation >96
                                                        Hours or Peripheral           Hours or Principal
                                                        Extracorporeal Membrane       Diagnosis Except Face,
                                                        Oxygenation (ECMO)).          Mouth and Neck with Major
                                                                                      O.R. Procedure).
5A1522H.....................  Extracorporeal           MS-DRG 207 (Respiratory       Pre-MDC MS-DRG 003 (ECMO or
                               Oxygenation, Membrane,   System Diagnosis with         Tracheostomy with
                               Peripheral Veno-venous.  Ventilator Support >96        Mechanical Ventilation >96
                                                        Hours or Peripheral           Hours or Principal
                                                        Extracorporeal Membrane       Diagnosis Except Face,
                                                        Oxygenation (ECMO)).          Mouth and Neck with Major
                                                                                      O.R. Procedure).
                                                       MS-DRG 291 (Heart Failure     Pre-MDC MS-DRG 003 (ECMO or
                                                        and Shock with MCC or         Tracheostomy with
                                                        Peripheral Extracorporeal     Mechanical Ventilation >96
                                                        Membrane Oxygenation          Hours or Principal
                                                        (ECMO)).                      Diagnosis Except Face,
                                                                                      Mouth and Neck with Major
                                                                                      O.R. Procedure).
                                                       MS-DRG 296 (Cardiac Arrest,   Pre-MDC MS-DRG 003 (ECMO or
                                                        Unexplained with MCC or       Tracheostomy with
                                                        Peripheral Extracorporeal     Mechanical Ventilation >96
                                                        Membrane Oxygenation          Hours or Principal
                                                        (ECMO)).                      Diagnosis Except Face,
                                                                                      Mouth and Neck with Major
                                                                                      O.R. Procedure).
                                                       MS-DRG 870 (Septicemia or     Pre-MDC MS-DRG 003 (ECMO or
                                                        Severe Sepsis with            Tracheostomy with
                                                        Mechanical Ventilation >96    Mechanical Ventilation >96
                                                        Hours or Peripheral           Hours or Principal
                                                        Extracorporeal Membrane       Diagnosis Except Face,
                                                        Oxygenation (ECMO)).          Mouth and Neck with Major
                                                                                      O.R. Procedure).
----------------------------------------------------------------------------------------------------------------
b. Allogeneic Bone Marrow Transplant
    We received a request to create new MS-DRGs for cases that would
identify patients who undergo an allogeneic hematopoietic cell
transplant (HCT) procedure. The requestor asked us to split MS-DRG 014
(Allogeneic Bone Marrow Transplant) into two new MS-DRGs and assign
cases to the recommended new MS-DRGs according to the donor source,
with cases for allogeneic related matched donor source assigned to one
MS-DRG and cases for allogeneic unrelated matched donor source assigned
to the other MS-DRG. The requestor stated that by creating two new MS-
DRGs for allogeneic related and allogeneic unrelated donor source,
respectively, the MS-DRGs would more appropriately recognize the
clinical characteristics and cost differences in allogeneic HCT cases.
    The requestor stated that allogeneic related and allogeneic
unrelated HCT cases are clinically different and have significantly
different donor search and cell acquisition charges. According to the
requestor, 70 percent of patients do not have a matched sibling donor
(that is, an allogeneic related matched donor) in their family. The
requestor also stated that this rate is higher for Medicare
beneficiaries. According to the requestor, the current payment for
allogeneic HCT cases is inadequate and affects patient's access to
care.
    The requestor performed its own analysis and stated that it found
the average costs for HCT cases reporting revenue code 0815 (Stem cell
acquisition) alone or revenue code 0819 (Other organ acquisition) in
combination with revenue code 0815 with one of the ICD-10-PCS procedure
[[Page 19177]]
codes for allogeneic unrelated donor source were significantly higher
than the average costs for HCT cases reporting revenue code 0815 alone
or both revenue codes 0815 and 0819 in combination with one of the ICD-
10-PCS procedure codes for allogeneic related donor source. Further,
the requestor reported that, according to its analysis, the average
costs for HCT cases reporting revenue code 0815 alone or both revenue
codes 0815 and 0819 in combination with one of the ICD-10-PCS procedure
codes for unspecified allogeneic donor source were also significantly
higher than the average costs for HCT cases reporting the ICD-10-PCS
procedure codes for allogeneic related donor source. The requestor
suggested that cases reporting the unspecified donor source procedure
code are highly likely to represent unrelated donors, and recommended
that, if the two new MS-DRGs are created as suggested, the cases
reporting the procedure codes for unspecified donor source be included
in the suggested new ``unrelated donor'' MS-DRG. The requestor also
suggested that CMS apply a code edit through the inpatient Medicare
Code Editor (MCE), similar to the edit in the Integrated Outpatient
Code Editor (I/OCE) which requires reporting of revenue code 0815 on
the claim with the appropriate procedure code or the claim may be
subject to being returned to the provider.
    The ICD-10-PCS procedure codes assigned to MS-DRG 014 that identify
related, unrelated and unspecified donor source for an allogeneic HCT
are shown in the following table.
------------------------------------------------------------------------
           ICD-10-PCS code                     Code description
------------------------------------------------------------------------
30230G2.............................  Transfusion of allogeneic related
                                       bone marrow into peripheral vein,
                                       open approach.
30230G3.............................  Transfusion of allogeneic
                                       unrelated bone marrow into
                                       peripheral vein, open approach.
30230G4.............................  Transfusion of allogeneic
                                       unspecified bone marrow into
                                       peripheral vein, open approach.
30230X2.............................  Transfusion of allogeneic related
                                       cord blood stem cells into
                                       peripheral vein, open approach.
30230X3.............................  Transfusion of allogeneic
                                       unrelated cord blood stem cells
                                       into peripheral vein, open
                                       approach.
30230X4.............................  Transfusion of allogeneic
                                       unspecified cord blood stem cells
                                       into peripheral vein, open
                                       approach.
30230Y2.............................  Transfusion of allogeneic related
                                       hematopoietic stem cells into
                                       peripheral vein, open approach.
30230Y3.............................  Transfusion of allogeneic
                                       unrelated hematopoietic stem
                                       cells into peripheral vein, open
                                       approach.
30230Y4.............................  Transfusion of allogeneic
                                       unspecified hematopoietic stem
                                       cells into peripheral vein, open
                                       approach.
30233G2.............................  Transfusion of allogeneic related
                                       bone marrow into peripheral vein,
                                       percutaneous approach.
30233G3.............................  Transfusion of allogeneic
                                       unrelated bone marrow into
                                       peripheral vein, percutaneous
                                       approach.
30233G4.............................  Transfusion of allogeneic
                                       unspecified bone marrow into
                                       peripheral vein, percutaneous
                                       approach.
30233X2.............................  Transfusion of allogeneic related
                                       cord blood stem cells into
                                       peripheral vein, percutaneous
                                       approach.
30233X3.............................  Transfusion of allogeneic
                                       unrelated cord blood stem cells
                                       into peripheral vein,
                                       percutaneous approach.
30233X4.............................  Transfusion of allogeneic
                                       unspecified cord blood stem cells
                                       into peripheral vein,
                                       percutaneous approach.
30233Y2.............................  Transfusion of allogeneic related
                                       hematopoietic stem cells into
                                       peripheral vein, percutaneous
                                       approach.
30233Y3.............................  Transfusion of allogeneic
                                       unrelated hematopoietic stem
                                       cells into peripheral vein,
                                       percutaneous approach.
30233Y4.............................  Transfusion of allogeneic
                                       unspecified hematopoietic stem
                                       cells into peripheral vein,
                                       percutaneous approach.
30240G2.............................  Transfusion of allogeneic related
                                       bone marrow into central vein,
                                       open approach.
30240G3.............................  Transfusion of allogeneic
                                       unrelated bone marrow into
                                       central vein, open approach.
30240G4.............................  Transfusion of allogeneic
                                       unspecified bone marrow into
                                       central vein, open approach.
30240X2.............................  Transfusion of allogeneic related
                                       cord blood stem cells into
                                       central vein, open approach.
30240X3.............................  Transfusion of allogeneic
                                       unrelated cord blood stem cells
                                       into central vein, open approach.
30240X4.............................  Transfusion of allogeneic
                                       unspecified cord blood stem cells
                                       into central vein, open approach.
30240Y2.............................  Transfusion of allogeneic related
                                       hematopoietic stem cells into
                                       central vein, open approach.
30240Y3.............................  Transfusion of allogeneic
                                       unrelated hematopoietic stem
                                       cells into central vein, open
                                       approach.
30240Y4.............................  Transfusion of allogeneic
                                       unspecified hematopoietic stem
                                       cells into central vein, open
                                       approach.
30243G2.............................  Transfusion of allogeneic related
                                       bone marrow into central vein,
                                       percutaneous approach.
30243G3.............................  Transfusion of allogeneic
                                       unrelated bone marrow into
                                       central vein, percutaneous
                                       approach.
30243G4.............................  Transfusion of allogeneic
                                       unspecified bone marrow into
                                       central vein, percutaneous
                                       approach.
30243X2.............................  Transfusion of allogeneic related
                                       cord blood stem cells into
                                       central vein, percutaneous
                                       approach.
30243X3.............................  Transfusion of allogeneic
                                       unrelated cord blood stem cells
                                       into central vein, percutaneous
                                       approach.
30243X4.............................  Transfusion of allogeneic
                                       unspecified cord blood stem cells
                                       into central vein, percutaneous
                                       approach.
30243Y2.............................  Transfusion of allogeneic related
                                       hematopoietic stem cells into
                                       central vein, percutaneous
                                       approach.
30243Y3.............................  Transfusion of allogeneic
                                       unrelated hematopoietic stem
                                       cells into central vein,
                                       percutaneous approach.
30243Y4.............................  Transfusion of allogeneic
                                       unspecified hematopoietic stem
                                       cells into central vein,
                                       percutaneous approach.
30250G1.............................  Transfusion of nonautologous bone
                                       marrow into peripheral artery,
                                       open approach.
30250X1.............................  Transfusion of nonautologous cord
                                       blood stem cells into peripheral
                                       artery, open approach.
30250Y1.............................  Transfusion of nonautologous
                                       hematopoietic stem cells into
                                       peripheral artery, open approach.
30253G1.............................  Transfusion of nonautologous bone
                                       marrow into peripheral artery,
                                       percutaneous approach.
30253X1.............................  Transfusion of nonautologous cord
                                       blood stem cells into peripheral
                                       artery, percutaneous approach.
30253Y1.............................  Transfusion of nonautologous
                                       hematopoietic stem cells into
                                       peripheral artery, percutaneous
                                       approach.
30260G1.............................  Transfusion of nonautologous bone
                                       marrow into central artery, open
                                       approach.
30260X1.............................  Transfusion of nonautologous cord
                                       blood stem cells into central
                                       artery, open approach.
30260Y1.............................  Transfusion of nonautologous
                                       hematopoietic stem cells into
                                       central artery, open approach.
30263G1.............................  Transfusion of nonautologous bone
                                       marrow into central artery,
                                       percutaneous approach.
30263X1.............................  Transfusion of nonautologous cord
                                       blood stem cells into central
                                       artery, percutaneous approach.
30263Y1.............................  Transfusion of nonautologous
                                       hematopoietic stem cells into
                                       central artery, percutaneous
                                       approach.
------------------------------------------------------------------------
    We examined claims data from the September 2018 update of the FY
2018 MedPAR file for MS-DRG 014 and identified the subset of cases
within MS-DRG 014 reporting procedure codes for allogeneic HCT related
donor source, allogeneic HCT unrelated donor source, and allogeneic HCT
unspecified donor source, respectively. Our findings are shown in the
following table.
[[Page 19178]]
----------------------------------------------------------------------------------------------------------------
                                                                     Number of    Average length
                             MS-DRG                                    cases          of stay      Average costs
----------------------------------------------------------------------------------------------------------------
MS-DRG 014--All cases...........................................             854            28.2         $91,446
MS-DRG 014--Cases reporting allogeneic HCT related donor source.             292            29.5          87,444
MS-DRG 014--Cases reporting allogeneic HCT unrelated donor                   466            27.9          95,146
 source.........................................................
MS-DRG 014--Cases reporting allogeneic HCT unspecified donor                  90            26.2          90,945
 source.........................................................
----------------------------------------------------------------------------------------------------------------
    The total number of cases reported in MS-DRG 014 was 854, with an
average length of stay of 28.2 days and average costs of $91,446. For
the subset of cases reporting procedure codes for allogeneic HCT
related donor source, there were a total of 292 cases with an average
length of stay of 29.5 days and average costs of $87,444. For the
subset of cases reporting procedure codes for allogeneic HCT unrelated
donor source, there was a total of 466 cases with an average length of
stay of 27.9 days and average costs of $95,146. For the subset of cases
reporting procedure codes for allogeneic HCT unspecified donor source,
there was a total of 90 cases with an average length of stay of 26.2
days and average costs of $90,945.
    Based on the analysis described above, the current MS-DRG
assignment for the cases in MS-DRG 014 that identify patients who
undergo an allogeneic HCT procedure, regardless of donor source,
appears appropriate. The data analysis reflects that each subset of
cases reporting a procedure code for an allogeneic HCT procedure (that
is, related, unrelated, or unspecified donor source) has an average
length of stay and average costs that are comparable to the average
length of stay and average costs of all cases in MS-DRG 014. We also
take this opportunity to note that, 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 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, as noted above,
we analyzed the cases reporting the ICD-10-PCS procedure codes that
identify an allogeneic HCT procedure according to the donor source. We
then evaluated patient care costs using average costs and average
lengths of stay (based on the MedPAR data) and rely on the judgment of
our clinical advisors to determine whether the patients are clinically
distinct or similar to other patients represented in the MS-DRG.
Because MS-DRG 014 is defined by patients who undergo an allogeneic HCT
transplant procedure, our clinical advisors state they are all
clinically similar in that regard. We also note that the ICD-10-PCS
procedure codes that describe an allogeneic HCT procedure were revised
effective October 1, 2016 to uniquely identify the donor source in
response to a request and proposal that was discussed at the March 9-
10, 2016 ICD-10 Coordination and Maintenance Committee meeting. We
refer readers to the website at: https://www.cms.gov/Medicare/Coding/ICD9Provider DiagnosticCodes/ICD-9-CM-C-and-M-Meeting-Materials.html
for the committee meeting materials and discussion regarding this
proposal.
    In response to the requestor's statement that allogeneic related
and allogeneic unrelated HCT cases are clinically different and have
significantly different donor search and cell acquisition charges, our
clinical advisors support maintaining the current structure for MS-DRG
014 because they believe that MS-DRG 014 appropriately classifies all
patients who undergo an allogeneic HCT procedures and, therefore, it is
clinically coherent. While the requestor stated that there are clinical
differences in the related and unrelated HCT cases, they did not
provide any specific examples of these clinical differences. With
regard to the donor search and cell acquisition charges, the requestor
noted that the unrelated donor cases are more expensive than the
related donor cases because of the donor search process, which includes
a registry search to identify the best donor source, extensive donor
screenings, evaluation, and cell acquisition and transportation
services for the patient. The requestor appeared to base that belief
according to the donor source and average charges reported with revenue
code 0815. As noted above, we use MedPAR data and do not consider the
reported revenue codes in deciding whether to propose to make further
modifications to the MS-DRGs. Based on our analysis of claims data for
MS-DRG 014, our clinical advisors stated that the resources are similar
for patients who undergo an allogeneic HCT procedure regardless of the
donor source.
    In reviewing this request, we also reviewed the instructions on
billing for stem cell transplantation in Chapter 3 of the Medicare
Claims Processing Manual and found that there appears to be inadvertent
duplication under Section 90.3.1 and Section 90.3.3 of Chapter 3, as
both sections provide instructions on Billing for Stem Cell
Transplantation. Therefore, we are further reviewing the Medicare
Claims Processing Manual to identify potential revisions to address
this duplication. However, we also note that section 90.3.1 and section
90.3.3 provide different instruction regarding which revenue code
should be reported. Section 90.3.1 instructs providers to report
revenue code 0815 and Section 90.3.3 instructs providers to report
revenue code 0819. We note that we issued instructions as a One-Time
Notification, Pub. No. 100-04, Transmittal 3571, Change Request 9674,
effective January 1, 2017, which instructs that the appropriate revenue
code to report on claims for allogeneic stem cell acquisition/donor
services is revenue code 0815. Accordingly, we also are considering
additional revisions as needed to conform the instructions for
reporting these codes in the Medicare Claims Processing Manual.
    With regard to the requestor's recommendation that we create a new
code edit through the inpatient MCE similar to the edit in the I/OCE
which requires reporting of revenue code 0815 on the claim, we note
that the MCE is not designed to include revenue codes for claims
editing purposes. Rather, as stated in section II.F.16. of the preamble
of this proposed rule, it is a software program that detects and
reports errors in the coding of Medicare claims data. The coding of
Medicare claims data refers to diagnosis and procedure coding, as well
as demographic information.
    For the reasons described above, we are not proposing to change the
current structure of MS-DRG 014. We are not proposing to split MS-DRG
014 into two new MS-DRGs that assign cases according to whether the
allogeneic donor source is related or unrelated, as the requestor
suggested.
    In addition, while conducting our analysis of cases reporting ICD-
10-PCS
[[Page 19179]]
procedure codes for allogeneic HCT procedures that are assigned to MS-
DRG 014, we noted that 8 procedure codes for autologous HCT procedures
are currently included in MS-DRG 014, as shown in the following table.
These codes are not properly assigned because MS-DRG 014 is defined by
cases reporting allogenic HCT procedures.
------------------------------------------------------------------------
           ICD-10-PCS code                     Code description
------------------------------------------------------------------------
30230X0.............................  Transfusion of autologous cord
                                       blood stem cells into peripheral
                                       vein, open approach.
30233X0.............................  Transfusion of autologous cord
                                       blood stem cells into peripheral
                                       vein, percutaneous approach.
30240X0.............................  Transfusion of autologous cord
                                       blood stem cells into central
                                       vein, open approach.
30243X0.............................  Transfusion of autologous cord
                                       blood stem cells into central
                                       vein, percutaneous approach.
30250X0.............................  Transfusion of autologous cord
                                       blood stem cells into peripheral
                                       artery, open approach.
30253X0.............................  Transfusion of autologous cord
                                       blood stem cells into peripheral
                                       artery, percutaneous approach.
30260X0.............................  Transfusion of autologous cord
                                       blood stem cells into central
                                       artery, open approach.
30263X0.............................  Transfusion of autologous cord
                                       blood stem cells into central
                                       artery, percutaneous approach.
------------------------------------------------------------------------
    The 8 ICD-10-PCS procedure codes for autologous HCT procedures were
inadvertently included in MS-DRG 014 as a result of efforts to
replicate the ICD-9-CM MS-DRGs. Under the ICD-9-CM MS-DRGs, procedure
code 41.06 (Cord blood stem cell transplant) was used to identify these
procedures and was also assigned to MS-DRG 014. As shown in the ICD-9-
CM code description, the reference to ``autologous'' is not included.
However, because the ICD-10-PCS autologous HCT procedure codes were
considered as plausible translations of the ICD-9-CM procedure code
(41.06), they were inadvertently included in MS-DRG 014. We also note
that, of these 8 procedure codes, there are 4 procedure codes that
describe a transfusion via arterial access. As described in more detail
below, because a transfusion procedure always uses venous access rather
than arterial access, these codes are considered clinically invalid and
were the subject of a proposal discussed at the March 5-6, 2019 ICD-10
Coordination and Maintenance Committee meeting to delete these codes
effective October 1, 2019 (FY 2020).
    The majority of ICD-10-PCS procedure codes specifying autologous
HCT procedures are currently assigned to MS-DRGs 016 and 017
(Autologous Bone Marrow Transplant with CC/MCC or T-cell Immunotherapy
and Autologous Bone Marrow Transplant without CC/MCC, respectively).
These codes are listed in the following table.
------------------------------------------------------------------------
           ICD-10-PCS code                     Code description
------------------------------------------------------------------------
30230AZ.............................  Transfusion of embryonic stem
                                       cells into peripheral vein, open
                                       approach.
30230G0.............................  Transfusion of autologous bone
                                       marrow into peripheral vein, open
                                       approach.
30230Y0.............................  Transfusion of autologous
                                       hematopoietic stem cells into
                                       peripheral vein, open approach.
30233AZ.............................  Transfusion of embryonic stem
                                       cells into peripheral vein,
                                       percutaneous approach.
30233G0.............................  Transfusion of autologous bone
                                       marrow into peripheral vein,
                                       percutaneous approach.
30233Y0.............................  Transfusion of autologous
                                       hematopoietic stem cells into
                                       peripheral vein, percutaneous
                                       approach.
30240AZ.............................  Transfusion of embryonic stem
                                       cells into central vein, open
                                       approach.
30240G0.............................  Transfusion of autologous bone
                                       marrow into central vein, open
                                       approach.
30240Y0.............................  Transfusion of autologous
                                       hematopoietic stem cells into
                                       central vein, open approach.
30243AZ.............................  Transfusion of embryonic stem
                                       cells into central vein,
                                       percutaneous approach.
30243G0.............................  Transfusion of autologous bone
                                       marrow into central vein,
                                       percutaneous approach.
30243Y0.............................  Transfusion of autologous
                                       hematopoietic stem cells into
                                       central vein, percutaneous
                                       approach.
30250G0.............................  Transfusion of autologous bone
                                       marrow into peripheral artery,
                                       open approach.
30250Y0.............................  Transfusion of autologous
                                       hematopoietic stem cells into
                                       peripheral artery, open approach.
30253G0.............................  Transfusion of autologous bone
                                       marrow into peripheral artery,
                                       percutaneous approach.
30253Y0.............................  Transfusion of autologous
                                       hematopoietic stem cells into
                                       peripheral artery, percutaneous
                                       approach.
30260G0.............................  Transfusion of autologous bone
                                       marrow into central artery, open
                                       approach.
30260Y0.............................  Transfusion of autologous
                                       hematopoietic stem cells into
                                       central artery, open approach.
30263G0.............................  Transfusion of autologous bone
                                       marrow into central artery,
                                       percutaneous approach.
30263Y0.............................  Transfusion of autologous
                                       hematopoietic stem cells into
                                       central artery, percutaneous
                                       approach.
------------------------------------------------------------------------
    While we believe, as indicated, that the cases reporting ICD-10-PCS
procedure codes for autologous HCT procedures may be improperly
assigned to MS-DRG 014, we also examined claims data for this subset of
cases to determine the frequency with which they were reported and the
relative resource use as compared with all cases assigned to MS-DRGs
016 and 017. Our findings are shown in the following table.
----------------------------------------------------------------------------------------------------------------
                                                                     Number of    Average length
                             MS-DRG                                    cases          of stay      Average costs
----------------------------------------------------------------------------------------------------------------
MS-DRG 014--Cases reporting autologous cord blood stem cell                    6            23.5         $38,319
 donor source...................................................
MS-DRG 016--All cases...........................................           2,150              18          47,546
MS-DRG 017--All cases...........................................             104              11          33,540
----------------------------------------------------------------------------------------------------------------
    For the subset of cases in MS-DRG 014 reporting ICD-10-PCS codes
for autologous HCT procedures, there was a total of 6 cases with an
average length of stay of 23.5 days and average costs of $38,319. The
total number of cases reported in MS-DRG 016 was 2,150, with an average
length of stay of 18 days and average costs of $47,546. The total
number of cases reported in MS-DRG 017 was 104, with an average length
of
[[Page 19180]]
stay of 11 days and average costs of $33,540.
    The results of our analysis indicate that the frequency with which
these autologous HCT procedure codes was reported in MS-DRG 014 is low
and that average costs of cases reporting autologous HCT procedures
assigned to MS-DRG 014 are more aligned with the average costs of cases
assigned to MS-DRGs 016 and 017, with the average costs being lower
than the average costs for all cases assigned to MS-DRG 016 and higher
than the average costs for all cases assigned to MS-DRG 017. Our
clinical advisors also indicated that the procedure codes for
autologous HCT procedures are more clinically aligned with cases that
are assigned to MS-DRGs 016 and 017 that are comprised of autologous
HCT procedures. Therefore, we are proposing to reassign the following 4
procedure codes for HCT procedures specifying autologous cord blood
stem cell as the donor source via venous access to MS-DRGs 016 and 017
for FY 2020.
------------------------------------------------------------------------
           ICD-10-PCS code                     Code description
------------------------------------------------------------------------
30230X0.............................  Transfusion of autologous cord
                                       blood stem cells into peripheral
                                       vein, open approach.
30233X0.............................  Transfusion of autologous cord
                                       blood stem cells into peripheral
                                       vein, percutaneous approach.
30240X0.............................  Transfusion of autologous cord
                                       blood stem cells into central
                                       vein, open approach.
30243X0.............................  Transfusion of autologous cord
                                       blood stem cells into central
                                       vein, percutaneous approach.
------------------------------------------------------------------------
    As discussed earlier in this section, the 4 procedure codes for HCT
procedures that describe an autologous cord blood stem cell transfusion
via arterial access currently assigned to MS-DRG 014, as listed
previously, are considered clinically invalid. These procedure codes
were discussed at the March 5-6, 2019 ICD-10 Coordination and
Maintenance Committee meeting, along with additional procedure codes
that are also considered clinically invalid, as described in the
section below.
    During our analysis of procedure codes that describe a HCT
procedure, we identified 128 clinically invalid codes from the
transfusion table (table 302) in the ICD-10-PCS classification
identifying a transfusion using arterial access, as listed in Table
6P.1a. associated with this proposed rule (which is available via the
internet on the CMS website at: https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/AcuteInpatientPPS/index.html). As shown in
Table 6P.1a., these 128 procedure codes describe transfusion procedures
with body system/region values ``5'' Peripheral Artery and ``6''
Central Artery. Because a transfusion procedure always uses venous
access rather than arterial access, these codes are considered
clinically invalid and were proposed for deletion at the March 5-6,
2019 ICD-10 Coordination and Maintenance Committee meeting. We refer
the reader to the website at: https://www.cms.gov/Medicare/Coding/ICD10/C-and-M-Meeting-Materials.html for the Committee meeting
materials regarding this proposal.
    We examined claims data from the September 2018 update of the FY
2018 MedPAR file for MS-DRGs 014, 016, and 017 to determine if there
were any cases that reported one of the 128 clinically invalid codes
from the transfusion table in the ICD-10-PCS classification identifying
a transfusion using arterial access, and as listed in Table 6P.1a.
associated with this proposed rule. Our clinical advisors agree that
because a transfusion procedure always uses venous access rather than
arterial access, these codes are considered invalid. Because these
procedure codes describe clinically invalid procedures, we would not
expect these codes to be reported in any claims data. Our findings are
shown in the following table.
----------------------------------------------------------------------------------------------------------------
                                                                     Number of    Average length
                             MS-DRG                                    cases          of stay      Average costs
----------------------------------------------------------------------------------------------------------------
MS-DRGs 014, 016, and 017--All cases............................           3,108            20.4         $59,140
MS-DRGs 014, 016, and 017--Cases with invalid transfusion codes.              31            19.6          52,912
----------------------------------------------------------------------------------------------------------------
    As shown in this table, we found a total of 3,108 cases across MS-
DRGs 014, 016, and 017 with an average length of stay of 20.4 days and
average costs of $59,140. We found a total of 31 cases (0.9 percent)
reporting a procedure code for an invalid transfusion procedure,
identifying the body system/region value ``5'' Peripheral Artery or
``6'' Central Artery, with an average length of stay of 19.6 days and
average costs of $52,912. The results of the data analysis demonstrate
that these invalid transfusion procedures represent approximately 1
percent of all discharges across MS-DRGs 014, 016, and 017. To
summarize, we are proposing to: (1) Reassign the four ICD-10-PCS codes
for HCT procedures specifying autologous cord blood stem cell as the
donor source from MS-DRG 014 to MS-DRGs 016 and 017 (procedure codes
30230X0, 30233X0, 30240X0, 30243X0); and (2) delete the 128 clinically
invalid codes from the transfusion table in the ICD-10-PCS
Classification describing a transfusion using arterial access that were
discussed at the March 5-6, 2019 ICD-10 Coordination and Maintenance
Committee meeting and are listed in Table 6P.1a associated with this
proposed rule. As discussed previously, we are not proposing to split
MS-DRG 014 into the two requested new MS DRGs that would assign cases
according to whether the allogeneic donor source is related or
unrelated.
c. Chimeric Antigen Receptor (CAR) T-Cell Therapies
    We received a request to create a new MS-DRG for procedures
involving CAR T-cell therapies. The requestor stated that creation of a
new MS-DRG would improve payment for CAR T-cell therapies in the
inpatient setting. According to the requestor, while cases involving
CAR T-cell therapy may now be eligible for new technology add-on
payments and outlier payments, there continue to be significant
financial losses by providers. The requestor also suggested that CMS
modify its existing payment mechanisms to use a CCR of 1.0 for charges
associated with CAR T-cell therapy.
    In addition, the requestor included technical and operational
suggestions related to CAR T-cell therapy, such as
[[Page 19181]]
the development of unique CAR T-cell therapy revenue and cost centers
for billing and cost reporting purposes. We will consider these
technical and operational suggestions in the development of future
billing and cost reporting guidelines and instructions.
    Currently, procedures involving CAR T-cell therapies are identified
with ICD-10-PCS procedure codes XW033C3 (Introduction of engineered
autologous chimeric antigen receptor t-cell immunotherapy into
peripheral vein, percutaneous approach, new technology group 3) and
XW043C3 (Introduction of engineered autologous chimeric antigen
receptor t-cell immunotherapy into central vein, percutaneous approach,
new technology group 3), which became effective October 1, 2017. In the
FY 2019 IPPS/LTCH PPS final rule, we finalized our proposal to assign
cases reporting these ICD-10-PCS procedure codes to Pre-MDC MS-DRG 016
for FY 2019 and to revise the title of this MS-DRG to ``Autologous Bone
Marrow Transplant with CC/MCC or T-cell Immunotherapy''. We refer
readers to section II.F.2.d. of the preamble of the FY 2019 IPPS/LTCH
PPS final rule for a complete discussion of these final policies (83 FR
41172 through 41174).
    As stated earlier, the current procedure codes for CAR T-cell
therapies both became effective October 1, 2017. In the FY 2019 IPPS/
LTCH PPS final rule (83 FR 41172 through 41174), we indicated we should
collect more comprehensive clinical and cost data before considering
assignment of a new MS-DRG to these therapies. While the September 2018
update of the FY 2018 MedPAR data file does contain some claims that
include those procedure codes that identify CAR T-cell therapies, the
number of cases is limited, and the submitted costs vary widely due to
differences in provider billing and charging practices for this
therapy. Therefore, while these claims could potentially be used to
create relative weights for a new MS-DRG, we do not have the
comprehensive clinical and cost data that we generally believe are
needed to do so. Furthermore, given the relative newness of CAR T-cell
therapy and our proposal to continue new technology add-on payments for
FY 2020 for the two CAR T-cell therapies that currently have FDA
approval (KYMRIAHTM and YESCARTATM), as discussed
in section II.G.4.d. of the preamble of this proposed rule, at this
time we believe it may be premature to consider creation of a new MS-
DRG specifically for cases involving CAR T-cell therapy for FY 2020.
    Therefore, we are proposing not to modify the current MS-DRG
assignment for cases reporting CAR T-cell therapies for FY 2020. As
noted earlier, cases reporting ICD-10-PCS codes XW033C3 and XW043C3
would continue to be eligible to receive new technology add-on payments
for discharges occurring in FY 2020 if our proposal to continue such
payments is finalized. Currently, we expect that, in future years, we
would have additional data that exhibit more stability and greater
consistency in charging and billing practices that could be used to
evaluate the potential creation of a new MS-DRG specifically for cases
involving CAR T-cell therapies.
    Alternatively, notwithstanding our concerns regarding the claims
data, and the concerns discussed in the FY 2019 IPPS/LTCH PPS final
rule (83 FR 41172 to 41174), we are seeking public comments on payment
alternatives for CAR T-cell therapies, including payment under any
potential new MS-DRG. We also are inviting public comments on how these
payment alternatives would affect access to care, as well as how they
affect incentives to encourage lower drug prices, which is a high
priority for this Administration. As discussed in the FY 2019 IPPS/LTCH
PPS final rule (83 FR 41172 through 41174), we are considering
approaches and authorities to encourage value-based care and lower drug
prices. We are soliciting public comments on how the effective dates of
any potential payment methodology alternatives, if any were to be
adopted, may intersect and affect future participation in any such
alternative approaches.
    As part of our solicitation of public comment on the potential
creation of a new MS-DRG for CAR T-cell therapy procedures, we are also
seeking comment on the most appropriate way to develop the relative
weight if we were to finalize the creation of a new MS-DRG. While the
data are limited, it may be operationally possible to create a relative
weight by dividing the average costs of cases that include the CAR T-
cell procedures by the average costs of all cases, consistent with our
current methodology for setting the relative weights for FY 2020 and
using the same applicable data sources used for other MS-DRGs (for FY
2020, the FY 2018 MedPAR data and FY 2016 HCRIS data). We are seeking
public comments on whether this is the most accurate method for
determining the relative weight, given the current variation in the
claims data for these procedures, and also on how to address the
significant number of cases involving clinical trials. While we do not
typically exclude cases in clinical trials when developing the relative
weights, in this case, the absence of the drug costs on claims for
cases involving clinical trial claims could have a significant impact
on the relative weight. It is unclear whether a relative weight
calculated using cases for which hospitals do and do not incur drug
costs would accurately reflect the resource costs of caring for
patients who are not involved in clinical trials. A different approach
might be to develop a relative weight using an appropriate portion of
the average sales price (ASP) for these drugs as an alternative way to
reflect the costs involved in treating patients receiving CAR T-cell
therapies. We are requesting public comments on these approaches or
other approaches for setting the relative weight if we were to finalize
a new MS-DRG. We note that any such new MS-DRG would be established in
a budget neutral manner, consistent with section 1886(d)(4)(C)(iii) of
the Act, which specifies that the annual DRG reclassification and
recalibration of the relative weights must be made in a manner that
ensures that aggregate payments to hospitals are not affected.
    Another potential consideration if we were to create a new MS-DRG
is the extent to which it would be appropriate to geographically adjust
the payment under any such new MS-DRG. Under the methodology for
determining the Federal payment rate for operating costs under the
IPPS, the labor-related proportion of the national standardized amounts
is adjusted by the wage index to reflect the relative differences in
labor costs among geographic areas. The IPPS Federal payment rate for
operating costs is calculated as the MS-DRG relative weight x [(labor-
related applicable standardized amount x applicable wage index) +
(nonlabor-related applicable standardized amount x cost-of-living
adjustment)]. Given our understanding that the costs for CAR T-cell
therapy drugs do not vary among geographic areas, and given that costs
for CAR T-cell therapy would likely be an extremely high portion of the
costs for the MS-DRG, we are seeking public comments on whether we
should not geographically adjust the payment for cases assigned to any
potential new MS-DRG for CAR T-cell therapy procedures. We also are
seeking public comments on whether to instead apply the geographic
adjustment to a lower proportion of payments under any potential new
MS-DRG and, if so, how that lower proportion should be determined. We
note that while the prices of other drugs may also not vary
significantly among geographic areas, generally speaking, those other
drugs would not have estimated costs as high
[[Page 19182]]
as those of CAR T-cell therapies, nor would they represent as
significant a percentage of the average costs for the case. We are
seeking public comments on the use of our exceptions and adjustments
authority under section 1886(d)(5)(I) of the Act (or other relevant
authorities) to implement any such potential changes.
    Section 1886(d)(5)(B) of the Act provides that prospective payment
hospitals that have residents in an approved graduate medical education
(GME) program receive an additional payment for a Medicare discharge to
reflect the higher patient care costs of teaching hospitals relative to
nonteaching hospitals. The regulations regarding the calculation of
this additional payment, known as the indirect medical education (IME)
adjustment, are located at 42 CFR 412.105. The formula is traditionally
described in terms of a certain percentage increase in payment for
every 10-percent increase in the resident-to-bed ratio. For some
hospitals, this percentage increase can exceed an additional 25 percent
or more of the otherwise applicable payment. Some hospitals, sometimes
the same hospitals, can also receive a large percentage increase in
payments due to the Medicare disproportionate hospital (DSH) adjustment
provision under section 1886(d)(5)(F) of the Act. The regulations
regarding the calculation of the additional DSH payment are located at
42 CFR 412.106.
    Given that the payment for cases assigned to a new MS-DRG for CAR
T-cell therapy could significantly exceed the historical payment for
any existing MS-DRG, these percentage add-on payments could arguably
result in unreasonably high additional payments for CAR T-cell therapy
cases unrelated in any significant empirical way to the costs of the
hospital in providing care. For example, consider a teaching hospital
that has an IME adjustment factor of 0.25, and a DSH adjustment factor
of 0.10. If we were to create a new MS-DRG for CAR T-cell therapy
procedures that resulted in an average IPPS Federal payment rate for
operating costs of $400,000, under the current payment mechanism, the
hospital would receive an IME payment of $100,000 ($400,000 x 0.25) and
a DSH payment of $40,000 ($400,000 x 0.10), such that the total IPPS
Federal payment rate for operating costs including IME and DSH payments
would be $540,000 ($400,000 + $100,000 + $40,000). We are seeking
public comments on whether the IME and DSH payments should not be made
for cases assigned to any new MS-DRG for CAR T-cell therapy. We also
are seeking public comments on whether we should instead reduce the
applicable percentages used to determine these add-ons and, if so, how
those lower percentages should be determined. We are seeking public
comments on the use of our exceptions and adjustments authority under
section 1886(d)(5)(I) of the Act (or other relevant authorities) to
implement any potential changes.
    As further discussed section II.G.7. of the preamble to this
proposed rule, we are also requesting public comment on other payment
alternatives for these cases, including eliminating the use of the CCR
in calculating the new technology add-on payment for KYMRIAH[supreg]
and YESCARTA[supreg] by making a uniform add-on payment that equals the
proposed maximum add-on payment, that is, 65 percent of the cost of the
technology (in accordance with the proposed increase in the calculation
of the maximum new technology add-on payment amount), which in this
instance would be $242,450; and/or using a higher percentage than the
proposed 65 percent to calculate the maximum new technology add-on
payment amount.
    We are also requesting public comments on whether, in light of the
additional experience with billing and payment for cases involving CAR
T-cell therapies to Medicare patients, we should consider utilizing a
specific CCR for ICD-10-PCS procedure codes used to report the
performance of procedures involving the use of CAR T-cell therapies;
for example, a CCR of 1.0, when determining outlier payments, when
determining the new technology add-on payments, and when determining
payments to IPPS-excluded cancer hospitals for CAR T-cell therapies.
    We note that we also considered this payment alternative for FY
2019, as discussed in the FY 2019 IPPS/LTCH PPS final rule (83 FR 41172
through 41174). We indicated in that rulemaking that such a payment
alternative might use a CCR of 1.0 for charges associated with ICD-10-
PCS procedure codes XW033C3 and XW043C3, given that many public
inquirers believed that hospitals would be unlikely to set charges
different from the costs for KYMRIAH[supreg] and YESCARTA[supreg] CAR
T-cell therapies. We also indicated such a change would result in a
higher outlier payment, higher new technology add-on payment, or the
determination of higher costs for IPPS-excluded cancer hospital cases.
For example, and as described in the FY 2019 IPPS LTCH PPS final rule
(83 FR 41773), if a hospital charged $400,000 for the procedure
described by ICD-10-PCS procedure code XW033C3, the application of a
hypothetical CCR of 0.25 results in a cost of $100,000 (= $400,000 *
0.25) while the application of a hypothetical CCR of 1.00 results in a
cost of $400,000 (= $400,000 * 1.0).
3. MDC 1 (Diseases and Disorders of the Nervous System): Carotid Artery
Stent Procedures
    The logic for case assignment to MS-DRGs 034, 035, and 036 (Carotid
Artery Stent Procedures with MCC, with CC, and without CC/MCC,
respectively) as displayed in the ICD-10 MS-DRG Version 36 Definitions
Manual (which is available via the internet on the CMS website at:
https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/AcuteInpatientPPS/MS-DRG-Classifications-and-Software.html) is
comprised of two lists of logic that include procedure codes for
operating room (O.R.) procedures involving dilation of a carotid artery
(common, internal or external) with intraluminal device(s). The first
list of logic is entitled ``Operating Room Procedures'' and the second
list of logic is entitled ``Operating Room Procedures with Operating
Room Procedures''. We identified 46 ICD-10-PCS procedure codes in the
second logic list that do not describe dilation of a carotid artery
with an intraluminal device. Of these 46 procedure codes, we identified
24 codes describing dilation of a carotid artery without an
intraluminal device; 8 codes describing dilation of the vertebral
artery; and 14 codes describing dilation of a vein (jugular, vertebral
and face), as shown in the following table.
ICD-10 PCS Codes That Involve Dilation of a Neck Artery or Vein With and
                     Without an Intraluminal Device
------------------------------------------------------------------------
           ICD-10-PCS code                     Code description
------------------------------------------------------------------------
037H3Z6.............................  Dilation of right common carotid
                                       artery, bifurcation, percutaneous
                                       approach.
037H3ZZ.............................  Dilation of right common carotid
                                       artery, percutaneous approach.
[[Page 19183]]

037H4Z6.............................  Dilation of right common carotid
                                       artery, bifurcation, percutaneous
                                       endoscopic approach.
037H4ZZ.............................  Dilation of right common carotid
                                       artery, percutaneous endoscopic
                                       approach.
037J3Z6.............................  Dilation of left common carotid
                                       artery, bifurcation, percutaneous
                                       approach.
037J3ZZ.............................  Dilation of left common carotid
                                       artery, percutaneous approach.
037J4Z6.............................  Dilation of left common carotid
                                       artery, bifurcation, percutaneous
                                       endoscopic approach.
037J4ZZ.............................  Dilation of left common carotid
                                       artery, percutaneous endoscopic
                                       approach.
037K3Z6.............................  Dilation of right internal carotid
                                       artery, bifurcation, percutaneous
                                       approach.
037K3ZZ.............................  Dilation of right internal carotid
                                       artery, percutaneous approach.
037K4Z6.............................  Dilation of right internal carotid
                                       artery, bifurcation, percutaneous
                                       endoscopic approach.
037K4ZZ.............................  Dilation of right internal carotid
                                       artery, percutaneous endoscopic
                                       approach.
037L3Z6.............................  Dilation of left internal carotid
                                       artery, bifurcation, percutaneous
                                       approach.
037L3ZZ.............................  Dilation of left internal carotid
                                       artery, percutaneous approach.
037L4Z6.............................  Dilation of left internal carotid
                                       artery, bifurcation, percutaneous
                                       endoscopic approach.
037L4ZZ.............................  Dilation of left internal carotid
                                       artery, percutaneous endoscopic
                                       approach.
037M3Z6.............................  Dilation of right external carotid
                                       artery, bifurcation, percutaneous
                                       approach.
037M3ZZ.............................  Dilation of right external carotid
                                       artery, percutaneous approach.
037M4Z6.............................  Dilation of right external carotid
                                       artery, bifurcation, percutaneous
                                       endoscopic approach.
037M4ZZ.............................  Dilation of right external carotid
                                       artery, percutaneous endoscopic
                                       approach.
037N3Z6.............................  Dilation of left external carotid
                                       artery, bifurcation, percutaneous
                                       approach.
037N3ZZ.............................  Dilation of left external carotid
                                       artery, percutaneous approach.
037N4Z6.............................  Dilation of left external carotid
                                       artery, bifurcation, percutaneous
                                       endoscopic approach.
037N4ZZ.............................  Dilation of left external carotid
                                       artery, percutaneous endoscopic
                                       approach.
037P3Z6.............................  Dilation of right vertebral
                                       artery, bifurcation, percutaneous
                                       approach.
037P3ZZ.............................  Dilation of right vertebral
                                       artery, percutaneous approach.
037P4Z6.............................  Dilation of right vertebral
                                       artery, bifurcation, percutaneous
                                       endoscopic approach.
037P4ZZ.............................  Dilation of right vertebral
                                       artery, percutaneous endoscopic
                                       approach.
037Q3Z6.............................  Dilation of left vertebral artery,
                                       bifurcation, percutaneous
                                       approach.
037Q3ZZ.............................  Dilation of left vertebral artery,
                                       percutaneous approach.
037Q4Z6.............................  Dilation of left vertebral artery,
                                       bifurcation, percutaneous
                                       endoscopic approach.
037Q4ZZ.............................  Dilation of left vertebral artery,
                                       percutaneous endoscopic approach.
057M3DZ.............................  Dilation of right internal jugular
                                       vein with intraluminal device,
                                       percutaneous approach.
057M4DZ.............................  Dilation of right internal jugular
                                       vein with intraluminal device,
                                       percutaneous endoscopic approach.
057N3DZ.............................  Dilation of left internal jugular
                                       vein with intraluminal device,
                                       percutaneous approach.
057N4DZ.............................  Dilation of left internal jugular
                                       vein with intraluminal device,
                                       percutaneous endoscopic approach.
057P3DZ.............................  Dilation of right external jugular
                                       vein with intraluminal device,
                                       percutaneous approach.
057P4DZ.............................  Dilation of right external jugular
                                       vein with intraluminal device,
                                       percutaneous endoscopic approach.
057Q3DZ.............................  Dilation of left external jugular
                                       vein with intraluminal device,
                                       percutaneous approach.
057Q4DZ.............................  Dilation of left external jugular
                                       vein with intraluminal device,
                                       percutaneous endoscopic approach.
057R3DZ.............................  Dilation of left vertebral vein
                                       with intraluminal device,
                                       percutaneous approach.
057R4DZ.............................  Dilation of right vertebral vein
                                       with intraluminal device,
                                       percutaneous endoscopic approach.
057S3DZ.............................  Dilation of left vertebral vein
                                       with intraluminal device,
                                       percutaneous approach.
057S4DZ.............................  Dilation of left vertebral vein
                                       with intraluminal device,
                                       percutaneous endoscopic approach.
057T3DZ.............................  Dilation of right face vein with
                                       intraluminal device, percutaneous
                                       approach.
057T4DZ.............................  Dilation of right face vein with
                                       intraluminal device, percutaneous
                                       endoscopic approach.
------------------------------------------------------------------------
    We examined claims data from the September 2018 update of the FY
2018 MedPAR file for MS-DRGs 034, 035, and 036 and identified cases
reporting any one of the 46 ICD-10-PCS procedure codes listed in the
tables above. Our findings are shown in the following table.
                                   MS-DRGs for Carotid Artery Stent Procedures
----------------------------------------------------------------------------------------------------------------
                                                                     Number of    Average length
                             MS-DRG                                    cases          of stay      Average costs
----------------------------------------------------------------------------------------------------------------
MS-DRG 034--All cases...........................................             863             6.8         $27,600
MS-DRG 034--Cases with procedure code other than dilation of a                15             8.8          36,596
 carotid artery with an intraluminal device.....................
MS-DRG 035--All cases...........................................           2,369               3          16,731
MS-DRG 035--Cases with procedure code other than dilation of a                52             3.5          17,815
 carotid artery with an intraluminal device.....................
MS-DRG 036--All cases...........................................           3,481             1.4          12,637
MS-DRG 036--Cases with procedure code other than dilation of a                67             1.4          12,621
 carotid artery with an intraluminal device.....................
----------------------------------------------------------------------------------------------------------------
    As shown in the table above, we found a total of 863 cases with an
average length of stay of 6.8 days and average costs of $27,600 in MS-
DRG 034. There were 15 cases reporting at least one of the 46 procedure
codes that
[[Page 19184]]
do not describe dilation of the carotid artery with an intraluminal
device in MS-DRG 034 with an average length of stay of 8.8 days and
average costs of $36,596. For MS-DRG 035, we found a total of 2,369
cases with an average length of stay of 3 days and average costs of
$16,731. There were 52 cases reporting at least one of the 46 procedure
codes that do not describe dilation of the carotid artery with an
intraluminal device in MS-DRG 035 with an average length of stay of 3.5
days and average costs of $17,815. For MS-DRG 036, we found a total of
3,481 cases with an average length of stay of 1.4 days and average
costs of $12,637. There were 67 cases reporting at least one of the 46
procedure codes that do not describe dilation of the carotid artery
with an intraluminal device in MS-DRG 036 with an average length of
stay of 1.4 days and average costs of $12,621.
    Our clinical advisors stated that MS-DRGs 034, 035, and 036 are
defined to include only those procedure codes that describe procedures
that involve dilation of a carotid artery with an intraluminal device.
Therefore, we are proposing to remove the procedure codes listed in the
table above from MS-DRGs 034, 035, and 036 that describe procedures
which (1) do not include an intraluminal device; (2) describe
procedures performed on arteries other than a carotid; and (3) describe
procedures performed on a vein.
    The 46 ICD-10-PCS procedure codes listed in the table above are
also assigned to MS-DRGs 037, 038, and 039 (Extracranial Procedures
with MCC, with CC, and without CC/MCC, respectively). Therefore, we
also examined claims data from the September 2018 update of the FY 2018
MedPAR file for MS-DRGs 037, 038, and 039. Our findings are shown in
the following table.
                                       MS-DRGs for Extracranial Procedures
----------------------------------------------------------------------------------------------------------------
                                                                     Number of    Average length
                             MS-DRG                                    cases          of stay      Average costs
----------------------------------------------------------------------------------------------------------------
MS-DRG 037--All cases...........................................           3,612             7.1         $23,703
MS-DRG 038--All cases...........................................          11,406             3.1          12,480
MS-DRG 039--All cases...........................................          22,938             1.5           8,400
----------------------------------------------------------------------------------------------------------------
    We found a total of 3,612 cases in MS-DRG 037 with an average
length of stay of 7.1 days and average costs of $23,703. We found a
total of 11,406 cases in MS-DRG 038 with an average length of stay of
3.1 days and average costs of $12,480. We found a total of 22,938 cases
in MS-DRG 039 with an average length of stay of 1.5 days and average
costs of $8,400.
    During our review of claims data for MS-DRGs 037, 038, and 039, we
also discovered 96 ICD-10-PCS procedure codes describing dilation of a
carotid artery with an intraluminal device that were inadvertently
included as a result of efforts to replicate the ICD-9 based MS-DRGs.
These procedure codes are also included in the logic for MS-DRGs 034,
035, and 036. Under ICD-9-CM, procedure codes 00.61 (Percutaneous
angioplasty of extracranial vessel(s)) and 00.63 (Percutaneous
insertion of carotid artery stent(s)) are both required to be reported
on a claim to identify that a carotid artery stent procedure was
performed and for assignment of the case to MS-DRGs 034, 035, and 036.
Procedure code 00.61 is designated as an O.R. procedure, while
procedure code 00.63 is designated as a non-O.R. procedure. Under ICD-
10-PCS, a carotid artery stent procedure is described by one unique
code that includes both clinical concepts of the angioplasty (dilation)
and the insertion of the stent (intraluminal device). This
``combination code'' under ICD-10-PCS is designated as an O.R.
procedure. Under ICD-9-CM, procedure code 00.61 reported in the absence
of procedure code 00.63 results in assignment to MS-DRGs 037, 038, and
039 according to the MS-DRG logic because procedure code 00.61 has an
inclusion term for vertebral vessels, as well as for the carotid
vessels. Therefore, when all of the comparable translations of
procedure code 00.61 as an O.R. procedure were replicated from the ICD-
9 based MS-DRGs to the ICD-10 based MS-DRGs, this replication
inadvertently results in the assignment of ICD-10-PCS procedure codes
that identify and describe a carotid artery stent procedure to MS-DRGs
037, 038, and 039. Therefore, we are proposing to remove the 96 ICD-10-
PCS procedure codes describing dilation of a carotid artery with an
intraluminal device from MS-DRGs 037, 038, and 039.
    We also found 6 procedure codes describing dilation of a carotid
artery with an intraluminal device in MS-DRGs 037, 038, and 039 that
are not currently assigned to MS-DRGs 034, 035, and 036. Our clinical
advisors recommended that these 6 procedure codes be reassigned from
MS-DRGs 037, 038, and 039 to MS-DRGs 034, 035, and 036 because the 6
procedure codes are consistent with the other procedures describing
dilation of a carotid artery with an intraluminal device that are
currently assigned to MS-DRGs 034, 035, and 036. We refer readers to
Table 6P.1b. associated with this proposed rule (which is available via
the internet on the CMS website at: http://www.cms.hhs.gov/Medicare/Medicare-Fee-for-Service-Payment/AcuteInpatientPPS/index.html) for the
complete list of procedure codes that we are proposing to remove from
MS-DRGs 037, 038, and 039.
    We also note that, as discussed in section II.F.14.f. of the
preamble of this proposed rule, we are deleting a number of codes that
include the ICD-10-PCS qualifier term ``bifurcation'' as the result of
the finalized proposal discussed at the September 11-12, 2018 ICD-10
Coordination and Maintenance Committee meeting. We refer readers to the
website at: https://www.cms.gov/Medicare/Coding/ICD9ProviderDiagnosticCodes/ICD-9-CM-C-and-M-Meeting-Materials.html for
the committee meeting materials and discussion regarding this proposal.
We note that, of the 96 procedure codes that we are proposing to remove
from the logic for MS-DRGs 037, 038, and 039, there are 48 procedure
codes that include the qualifier term ``bifurcation''. Therefore, these
48 procedure codes will be deleted effective October 1, 2019. The 48
remaining valid procedure codes that do not include the term
``bifurcation'' that we are proposing to remove from MS-DRGs 037, 038,
and 039 will continue to be assigned to MS-DRGs 034, 035, and 036.
    Lastly, if the applicable proposed MS-DRG changes are finalized, we
would make a conforming change to the ICD-10 MS-DRG Version 37
Definitions Manual for FY 2020 by combining all the procedure codes
identifying a carotid artery stent procedure within MS-DRGs 034, 035,
and 036 into one list entitled ``Operating Room Procedures'' to better
reflect the
[[Page 19185]]
definition of these MS-DRGs based on the discussion and proposals
described above.
4. MDC 4 (Diseases and Disorders of the Respiratory System): Pulmonary
Embolism
    We received a request to reassign three ICD-10-CM diagnosis codes
for pulmonary embolism with acute cor pulmonale from MS-DRG 176
(Pulmonary Embolism without MCC) to the higher severity level MS-DRG
175 (Pulmonary Embolism with MCC). The three diagnosis codes are
identified in the following table.
------------------------------------------------------------------------
           ICD-10-CM code                      Code description
------------------------------------------------------------------------
I26.01..............................  Septic pulmonary embolism with
                                       acute cor pulmonale.
I26.02..............................  Saddle embolus of pulmonary artery
                                       with acute cor pulmonale.
I26.09..............................  Other pulmonary embolism with
                                       acute cor pulmonale.
------------------------------------------------------------------------
    The requestor noted that, in the FY 2019 IPPS/LTCH PPS final rule
(83 FR 41231 through 41234), we finalized the proposal to remove the
special logic in the GROUPER for processing claims containing a code on
the Principal Diagnosis Is Its Own CC or MCC Lists and deleted the
relevant tables from the ICD-10 MS-DRG Definitions Manual Version 36,
effective October 1, 2018. As a result of this change, cases reporting
any one of the three ICD-10-CM diagnosis codes describing a pulmonary
embolism with acute cor pulmonale were reassigned from MS-DRG 175 to
MS-DRG 176, absent a secondary diagnosis code to trigger assignment to
MS-DRG 175. The requestor stated that this change in the MS-DRG
assignment for these cases resulted in a reduction in payment for cases
involving pulmonary embolism with acute cor pulmonale and that the FY
2019 payment rate for MS-DRG 176 does not appropriately account for the
costs and resource utilization associated with these cases because the
subset of patients with pulmonary embolism with acute cor pulmonale
often represents a more severe set of patients with pulmonary embolism.
    The logic for case assignment to MS-DRGs 175 and 176 is displayed
in the ICD-10 MS-DRG Version 36 Definitions Manual, which is available
via the internet on the CMS website at: https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/AcuteInpatientPPS/MS-DRG-Classifications-and-Software.html.
    We analyzed claims data from the September 2018 update of the FY
2018 MedPAR file for MS-DRGs 175 and 176 to identify cases reporting
diagnosis codes describing pulmonary embolism with acute cor pulmonale
as listed above (ICD-10-CM diagnosis codes I26.01, I26.02 or I26.09) as
the principal diagnosis or as a secondary diagnosis. Our findings are
shown in the following table.
                                         MS-DRGs for Pulmonary Embolism
----------------------------------------------------------------------------------------------------------------
                                                                     Number of    Average length
                             MS-DRG                                    cases          of stay      Average costs
----------------------------------------------------------------------------------------------------------------
MS-DRG 175--All cases...........................................          24,389             5.2         $10,294
MS-DRG 175--Cases with pulmonary embolism with acute cor                   2,326             5.7          13,034
 pulmonale......................................................
MS-DRG 176--All cases...........................................          30,215             3.3           6,356
MS-DRG 176--Cases with pulmonary embolism with acute cor                   1,821             3.9           9,630
 pulmonale......................................................
----------------------------------------------------------------------------------------------------------------
    As shown in the table, for MS-DRG 175, there was a total of 24,389
cases with an average length of stay of 5.2 days and average costs of
$10,294. Of these 24,389 cases, there were 2,326 cases reporting
pulmonary embolism with acute cor pulmonale, with an average length of
stay 5.7 days and average costs of $13,034. For MS-DRG 176, there was a
total of 30,215 cases with an average length of stay of 3.3 days and
average costs of $6,356. Of these 30,215 cases, there were 1,821 cases
reporting pulmonary embolism with acute cor pulmonale with an average
length of stay of 3.9 days and average costs of $9,630.
    As stated in the FY 2019 IPPS/LTCH PPS final rule (83 FR 41231
through 41234), available ICD-10 data can now be used to evaluate other
indicators of resource utilization and, as shown by our claims
analysis, the data indicate that the average costs of cases reporting
pulmonary embolism or saddle embolus with acute cor pulmonale ($9,630)
in MS-DRG 176 are closer to the average costs for all pulmonary
embolism cases in MS-DRG 175 ($10,294) as compared to the average costs
for all cases in MS-DRG 176 ($6,356). Our clinical advisors also agree
that this subset of patients with acute cor pulmonale often represents
a more severe set of patients and that these cases are more
appropriately assigned to the higher severity level ``with MCC'' MS-
DRG. Therefore, we are proposing to reassign cases reporting diagnosis
code I26.01, I26.02, or I26.09 to the higher severity level MS-DRG 175
and to revise the title for MS-DRG 175 to ``Pulmonary Embolism with MCC
or Acute Cor Pulmonale'' to more accurately reflect the diagnoses
assigned there.
5. MDC 5 (Diseases and Disorders of the Circulatory System)
a. Transcatheter Mitral Valve Repair With Implant
    As we did for the FY 2015 IPPS/LTCH PPS proposed rule (79 FR 28008
through 28010) and for the FY 2017 IPPS/LTCH PPS proposed rule (81 FR
24985 through 24989), for FY 2020, we received a request to modify the
MS-DRG assignment for transcatheter mitral valve repair (TMVR) with
implant procedures. ICD-10-PCS procedure code 02UG3JZ (Supplement
mitral valve with synthetic substitute, percutaneous approach)
identifies and describes this procedure. This request also included the
suggestion that CMS give consideration to reclassifying other
endovascular cardiac valve repair procedures. Specifically, the
requestor recommended that cases reporting procedure codes describing
an endovascular cardiac valve repair with implant be reassigned to MS-
DRGs 266 and 267 (Endovascular Cardiac Valve Replacement with and
without MCC, respectively) and that the MS-DRG titles be revised to
Endovascular Cardiac Valve Interventions with Implant with and without
MCC, respectively. We refer readers to detailed discussions of
[[Page 19186]]
the MitraClip[supreg] System (hereafter referred to as
MitraClip[supreg]) for transcatheter mitral valve repair in previous
rulemakings, including the FY 2012 IPPS/LTCH PPS proposed rule (76 FR
25822) and final rule (76 FR 51528 through 51529), the FY 2013 IPPS/
LTCH PPS proposed rule (77 FR 27902 through 27903) and final rule (77
FR 53308 through 53310), the FY 2015 IPPS/LTCH PPS proposed rule (79 FR
28008 through 28010) and final rule (79 FR 49889 through 49892), the FY
2016 IPPS/LTCH PPS proposed rule (80 FR 24356 through 24359) and final
rule (80 FR 49363 through 49367), and the FY 2017 IPPS/LTCH PPS
proposed rule (81 FR 24985 through 24989) and final rule (81 FR 56809
through 56813), in response to requests for MS-DRG reclassification, as
well as the FY 2014 IPPS/LTCH PPS proposed rule (78 FR 27547 through
27552), under the new technology add-on payment policy. In the FY 2014
IPPS/LTCH PPS final rule (78 FR 50575), we were unable to consider
further the application for a new technology add-on payment for
MitraClip[supreg] because the technology had not received FDA approval
by the July 1, 2013 deadline.
    In the FY 2015 IPPS/LTCH PPS final rule, we finalized our proposal
to not create a new MS-DRG or to reassign cases reporting ICD-9-CM
procedure code 35.97 that described procedures involving the
MitraClip[supreg] to another MS-DRG (79 FR 49889 through 49892). Under
a new application, the request for new technology add-on payments for
the MitraClip[supreg] System was approved for FY 2015 (79 FR 49941
through 49946). The new technology add-on payment for MitraClip[supreg]
was subsequently discontinued effective FY 2017.
    In the FY 2016 IPPS/LTCH PPS final rule (80 FR 49371), we finalized
a modification to the MS-DRGs to which procedures involving the
MitraClip[supreg] were assigned. For the ICD-10 based MS-DRGs to fully
replicate the ICD-9-CM based MS-DRGs, ICD-10-PCS code 02UG3JZ
(Supplement mitral valve with synthetic substitute, percutaneous
approach), which identifies the MitraClip[supreg] technology and is the
ICD-10-PCS code translation for ICD-9-CM procedure code 35.97
(Percutaneous mitral valve repair with implant), was assigned to new
MS-DRGs 273 and 274 (Percutaneous Intracardiac Procedures with MCC and
without MCC, respectively) and continued to be assigned to MS-DRGs 231
and 232 (Coronary Bypass with PTCA with MCC and without MCC,
respectively).
    In the FY 2017 IPPS/LTCH PPS proposed and final rules, we also
discussed our analysis of MS-DRGs 228, 229, and 230 (Other
Cardiothoracic Procedures with MCC, with CC, and without CC/MCC,
respectively) with regard to the possible reassignment of cases
reporting ICD-10-PCS procedure code 02UG3JZ (Supplement mitral valve
with synthetic substitute, percutaneous approach). We finalized our
proposal to collapse these MS-DRGs (228, 229, and 230) from three
severity levels to two severity levels by deleting MS-DRG 230 and
revising the structure of MS-DRG 229. We also finalized our proposal to
reassign ICD-10-PCS procedure code 02UG3JZ (Supplement mitral valve
with synthetic substitute, percutaneous approach) from MS-DRGs 273 and
274 to MS-DRG 228 and revised MS-DRG 229 (81 FR 56813).
    According to the requestor, there are substantial clinical and
resource differences between the transcatheter mitral valve repair
(TMVR) procedure and other procedures currently grouping to MS-DRGs 228
and 229. The requestor noted that, currently, ICD-10-PCS procedure code
02UG3JZ is the only endovascular valve intervention with implant
procedure that maps to MS-DRGs 228 and 229. The requestor also noted
that other ICD-10-PCS procedure codes describing procedures for
endovascular (transcatheter) cardiac valve repair with implant map to
MS-DRGs 273 and 274 or to MS-DRGs 216, 217, 218, 219, 220, and 221
(Cardiac Valve and Other Major Cardiothoracic Procedures with and
without Cardiac Catheterization with MCC, with CC and without CC/MCC,
respectively). The requestor further noted that all ICD-10-PCS
procedure codes for endovascular cardiac valve replacement procedures
map to MS-DRGs 266 (Endovascular Cardiac Valve Replacement with MCC)
and 267 (Endovascular Cardiac Valve Replacement without MCC).
    The ICD-10-PCS procedure codes describing a transcatheter cardiac
valve repair procedure with an implant are listed in the following
table.
------------------------------------------------------------------------
           ICD-10-PCS code                        Description
------------------------------------------------------------------------
02UF37J.............................  Supplement aortic valve created
                                       from truncal valve with
                                       autologous tissue substitute,
                                       percutaneous approach.
02UF37Z.............................  Supplement aortic valve with
                                       autologous tissue substitute,
                                       percutaneous approach.
02UF38J.............................  Supplement aortic valve created
                                       from truncal valve with
                                       zooplastic tissue, percutaneous
                                       approach.
02UF38Z.............................  Supplement aortic valve with
                                       zooplastic tissue, percutaneous
                                       approach.
02UF3JJ.............................  Supplement aortic valve created
                                       from truncal valve with synthetic
                                       substitute, percutaneous
                                       approach.
02UF3JZ.............................  Supplement aortic valve with
                                       synthetic substitute,
                                       percutaneous approach.
02UF3KJ.............................  Supplement aortic valve created
                                       from truncal valve with
                                       nonautologous tissue substitute,
                                       percutaneous approach.
02UF3KZ.............................  Supplement aortic valve with
                                       nonautologous tissue substitute,
                                       percutaneous approach.
02UG37E.............................  Supplement mitral valve created
                                       from left atrioventricular valve
                                       with autologous tissue
                                       substitute, percutaneous
                                       approach.
02UG37Z.............................  Supplement mitral valve with
                                       autologous tissue substitute,
                                       percutaneous approach.
02UG38E.............................  Supplement mitral valve created
                                       from left atrioventricular valve
                                       with zooplastic tissue,
                                       percutaneous approach.
02UG38Z.............................  Supplement mitral valve with
                                       zooplastic tissue, percutaneous
                                       approach.
02UG3KE.............................  Supplement mitral valve created
                                       from left atrioventricular valve
                                       with nonautologous tissue
                                       substitute, percutaneous
                                       approach.
02UG3KZ.............................  Supplement mitral valve with
                                       nonautologous tissue substitute,
                                       percutaneous approach.
02UG3JE.............................  Supplement mitral valve created
                                       from left atrioventricular valve
                                       with synthetic substitute,
                                       percutaneous approach.
02UG3JZ.............................  Supplement mitral valve with
                                       synthetic substitute,
                                       percutaneous approach.
02UH37Z.............................  Supplement pulmonary valve with
                                       autologous tissue substitute,
                                       percutaneous approach.
02UH38Z.............................  Supplement pulmonary valve with
                                       zooplastic tissue, percutaneous
                                       approach.
02UH3JZ.............................  Supplement pulmonary valve with
                                       synthetic substitute,
                                       percutaneous approach.
02UH3KZ.............................  Supplement pulmonary valve with
                                       nonautologous tissue substitute,
                                       percutaneous approach.
02UJ37G.............................  Supplement tricuspid valve created
                                       from right atrioventricular valve
                                       with autologous tissue
                                       substitute, percutaneous
                                       approach.
02UJ37Z.............................  Supplement tricuspid valve with
                                       autologous tissue substitute,
                                       percutaneous approach.
02UJ38G.............................  Supplement tricuspid valve created
                                       from right atrioventricular valve
                                       with zooplastic tissue,
                                       percutaneous approach.
02UJ38Z.............................  Supplement tricuspid valve with
                                       zooplastic tissue, percutaneous
                                       approach.
02UJ3JG.............................  Supplement tricuspid valve created
                                       from right atrioventricular valve
                                       with synthetic substitute,
                                       percutaneous approach.
02UJ3JZ.............................  Supplement tricuspid valve with
                                       synthetic substitute,
                                       percutaneous approach.
[[Page 19187]]

02UJ3KG.............................  Supplement tricuspid valve created
                                       from right atrioventricular valve
                                       with nonautologous tissue
                                       substitute, percutaneous
                                       approach.
02UJ3KZ.............................  Supplement tricuspid valve with
                                       nonautologous tissue substitute,
                                       percutaneous approach.
------------------------------------------------------------------------
    The ICD-10-PCS procedure codes describing a transcatheter cardiac
valve replacement procedure are listed in the following table.
------------------------------------------------------------------------
           ICD-10-PCS code                        Description
------------------------------------------------------------------------
02RF37H.............................  Replacement of aortic valve with
                                       autologous tissue substitute,
                                       transapical, percutaneous
                                       approach.
02RF37Z.............................  Replacement of aortic valve with
                                       autologous tissue substitute,
                                       percutaneous approach.
02RF38H.............................  Replacement of aortic valve with
                                       zooplastic tissue, transapical,
                                       percutaneous approach.
02RF38Z.............................  Replacement of aortic valve with
                                       zooplastic tissue, percutaneous
                                       approach.
02RF3JH.............................  Replacement of aortic valve with
                                       synthetic substitute,
                                       transapical, percutaneous
                                       approach.
02RF3JZ.............................  Replacement of aortic valve with
                                       synthetic substitute,
                                       percutaneous approach.
02RF3KH.............................  Replacement of aortic valve with
                                       nonautologous tissue substitute,
                                       transapical, percutaneous
                                       approach.
02RF3KZ.............................  Replacement of aortic valve with
                                       nonautologous tissue substitute,
                                       percutaneous approach.
02RG37H.............................  Replacement of mitral valve with
                                       autologous tissue substitute,
                                       transapical, percutaneous
                                       approach.
02RG37Z.............................  Replacement of mitral valve with
                                       autologous tissue substitute,
                                       percutaneous approach.
02RG38H.............................  Replacement of mitral valve with
                                       zooplastic tissue, transapical,
                                       percutaneous approach.
02RG38Z.............................  Replacement of mitral valve with
                                       zooplastic tissue, percutaneous
                                       approach.
02RG3JH.............................  Replacement of mitral valve with
                                       synthetic substitute,
                                       transapical, percutaneous
                                       approach.
02RG3JZ.............................  Replacement of mitral valve with
                                       synthetic substitute,
                                       percutaneous approach.
02RG3KH.............................  Replacement of mitral valve with
                                       nonautologous tissue substitute,
                                       transapical, percutaneous
                                       approach.
02RG3KZ.............................  Replacement of mitral valve with
                                       nonautologous tissue substitute,
                                       percutaneous approach.
02RH37H.............................  Replacement of pulmonary valve
                                       with autologous tissue
                                       substitute, transapical,
                                       percutaneous approach.
02RH37Z.............................  Replacement of pulmonary valve
                                       with autologous tissue
                                       substitute, percutaneous
                                       approach.
02RH38H.............................  Replacement of pulmonary valve
                                       with zooplastic tissue,
                                       transapical, percutaneous
                                       approach.
02RH38Z.............................  Replacement of pulmonary valve
                                       with zooplastic tissue,
                                       percutaneous approach.
02RH3JH.............................  Replacement of pulmonary valve
                                       with synthetic substitute,
                                       transapical, percutaneous
                                       approach.
02RH3JZ.............................  Replacement of pulmonary valve
                                       with synthetic substitute,
                                       percutaneous approach.
02RH3KH.............................  Replacement of pulmonary valve
                                       with nonautologous tissue
                                       substitute, transapical,
                                       percutaneous approach.
02RH3KZ.............................  Replacement of pulmonary valve
                                       with nonautologous tissue
                                       substitute, percutaneous
                                       approach.
02RJ37H.............................  Replacement of tricuspid valve
                                       with autologous tissue
                                       substitute, transapical,
                                       percutaneous approach.
02RJ37Z.............................  Replacement of tricuspid valve
                                       with autologous tissue
                                       substitute, percutaneous
                                       approach.
02RJ38H.............................  Replacement of tricuspid valve
                                       with zooplastic tissue,
                                       transapical, percutaneous
                                       approach.
02RJ38Z.............................  Replacement of tricuspid valve
                                       with zooplastic tissue,
                                       percutaneous approach.
02RJ3JH.............................  Replacement of tricuspid valve
                                       with synthetic substitute,
                                       transapical, percutaneous
                                       approach.
02RJ3JZ.............................  Replacement of tricuspid valve
                                       with synthetic substitute,
                                       percutaneous approach.
02RJ3KH.............................  Replacement of tricuspid valve
                                       with nonautologous tissue
                                       substitute, transapical,
                                       percutaneous approach.
02RJ3KZ.............................  Replacement of tricuspid valve
                                       with nonautologous tissue
                                       substitute, percutaneous
                                       approach.
X2RF332.............................  Replacement of aortic valve using
                                       zooplastic tissue, rapid
                                       deployment technique,
                                       percutaneous approach, new
                                       technology group 2.
------------------------------------------------------------------------
    The requestor performed its own analyses, first comparing TMVR
procedures (ICD-10-PCS procedure code 02UG3JZ) to other procedures
currently assigned to MS-DRGs 228 and 229, as well as to the
transcatheter cardiac valve replacement procedures in MS-DRGs 266 and
267. We refer the reader to the ICD-10 MS-DRG Version 36 Definitions
Manual for complete documentation of the logic for case assignment to
MS-DRGs 228 and 229 (which is available via the internet on the CMS
website at: https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/AcuteInpatientPPS/MS-DRG-Classifications-and-Software.html).
According to the requestor, its findings indicate that TMVR is more
closely aligned with MS-DRGs 266 and 267 than MS-DRGs 228 and 229 with
regard to average length of stay and average [standardized] costs. The
requestor also examined the impact of removing cases reporting a TMVR
procedure (ICD-10-PCS procedure code 02UG3JZ) from MS-DRGs 228 and 229
and adding those cases to MS-DRGs 266 and 267. The requestor noted this
movement would have minimal impact to MS-DRGs 266 and 267 based on its
analysis. In addition, the requestor stated that its request is in
alignment with CMS' policy goal of creating and maintaining clinically
coherent MS-DRGs.
    The requestor acknowledged that CMS has indicated in prior
rulemaking that TMVR procedures are not clinically similar to
endovascular cardiac valve replacement procedures, and the requestor
agreed that they are distinct procedures. However, the requestor also
believed that TMVR is more similar to the replacement procedures in MS-
DRGs 266 and 267 compared to the other procedures currently assigned to
MS-DRGs 228 and 229. The requestor provided the following table of
procedures in volume order (highest to lowest) to illustrate the
clinical differences between TMVR procedures and other procedures
currently assigned to MS-DRGs 228 and 229.
----------------------------------------------------------------------------------------------------------------
                                                                            ICD-10-PCS root
            Procedure                  Approach         Anatomy treated        operation       Implanted device
----------------------------------------------------------------------------------------------------------------
TMVR............................  Percutaneous......  Valves............  Supplement........  Substitute.
Destruction.....................  Open..............  Atria.............  Destruction.......  None.
[[Page 19188]]

Coronary Atherectomy............  Open..............  Coronary Artery...  Extirpation.......  None.
Insertion.......................  Percutaneous......  Atria or            Insertion.........  Pacemaker or
                                                       Ventricles.                             Intraluminal
                                                                                               Device.
Destruction.....................  Percutaneous......  Atria.............  Destructions......  None.
Structural Heart Repair.........  Open..............  Septum, Heart,      Repair............  None.
                                                       Chordae Tendinae,
                                                       or Papillary
                                                       Muscle.
Structural Heart Excision.......  Open..............  Septum, Atria,      Excision..........  None.
                                                       Ventricles,
                                                       Chordae Tendinae,
                                                       or Papillary
                                                       Muscle.
----------------------------------------------------------------------------------------------------------------
    The requestor noted that, among the procedures listed in the table,
TMVR is the only procedure that involves treatment of a cardiac valve
and is the only procedure that involves implanting a synthetic
substitute.
    To illustrate the similarities between TMVR procedures and
endovascular cardiac valve replacements in MS-DRGs 266 and 267, the
requestor provided the following table.
----------------------------------------------------------------------------------------------------------------
                                                                            ICD-10-PCS root
            Procedure                  Approach         Anatomy treated        operation       Implanted device
----------------------------------------------------------------------------------------------------------------
TMVR............................  Percutaneous......  Valves............  Supplement........  Substitute.
Endovascular Cardiac Valve        Percutaneous......  Valves............  Replacement.......  Substitute.
 Replacement.
----------------------------------------------------------------------------------------------------------------
    The requestor noted that both TMVR procedures and endovascular
cardiac valve replacements use a percutaneous approach, treat cardiac
valves, and use an implanted device for purposes of improving the
function of the specified valve. The requestor believed that the
analyses support the request to group TMVR procedures with endovascular
cardiac valve replacements from a resource perspective and an
improvement to clinical coherence could be achieved because TMVR
procedures are more similar to the endovascular cardiac valve
replacements compared to the other procedures in MS-DRGs 228 and 229,
where TMVR is currently assigned.
    As noted earlier in this section, the request also included the
suggestion that CMS give consideration to reclassifying other
endovascular cardiac valve repair with implant procedures to MS-DRGs
266 and 267; specifically, endovascular cardiac valve repair with
implant procedures involving the aortic, pulmonary, tricuspid and other
non-TMVR mitral valve procedures that currently group to MS-DRGs 273
and 274 or MS-DRGs 216, 217, 218, 219, 220 and 221. The requestor
acknowledged that endovascular cardiac valve repair with implant
procedures involving these other cardiac valves have lower volumes in
comparison to the TMVR procedure (ICD-10-PCS procedure code 02UG3JZ),
which makes analysis of these procedures a little more difficult.
However, the requestor suggested that movement of these procedures to
MS-DRGs 266 and 267 would enable the ability to maintain clinical
coherence for all endovascular cardiac valve interventions. The
requestor also stated that there is an anticipated increase in the
volume of not only the TMVR procedure described by ICD-10-PCS procedure
code 02UG3JZ (which has grown annually since the MitraClip[supreg] was
approved for new technology add-on payment in FY 2015), but also for
the other endovascular cardiac valve repair with implant procedures,
such as those involving the tricuspid valve, which are currently under
study in the United States and Europe. Based on this anticipated
increase in volume for endovascular cardiac valve repair with implant
procedures, the requestor believed that it would be advantageous to
take this opportunity to restructure the MS-DRGs by moving all the
endovascular cardiac valve repair with implant procedures to MS-DRGs
266 and 267 with revised titles as noted previously, to improve
clinical consistency beginning in FY 2020. The requestor further noted
that while the requestor believes its request reflects the best
approach for appropriate MS-DRG assignment for TMVR and other
endovascular cardiac valve repair with implant procedures, the
requestor understands that CMS may consider other alternatives.
    We analyzed claims data from the September 2018 update of the FY
2018 MedPAR file for cases reporting ICD-10-PCS procedure code 02UG3JZ
in MS-DRGs 228 and 229 as well as cases reporting one of the procedure
codes listed above describing a transcatheter cardiac valve repair with
implant procedure in MS-DRGs 216, 217, 218, 219, 220, 221, 273, and
274. Our findings are shown in the tables below.
                     MS-DRGs for Transcatheter Cardiac Valve Repair With Implant Procedures
----------------------------------------------------------------------------------------------------------------
                                                                     Number of    Average length
                             MS-DRG                                    cases          of stay      Average costs
----------------------------------------------------------------------------------------------------------------
MS-DRG 216--All cases...........................................           5,909              16         $70,435
MS-DRG 216--Cases with procedure codes for transcatheter cardiac              48            12.6          72,556
 valve repair...................................................
MS-DRG 217--All cases...........................................           2,166             9.4          47,299
MS-DRG 217--Cases with procedure codes for transcatheter cardiac              25             3.4          40,707
 valve repair...................................................
MS-DRG 218--All cases...........................................             268             6.8          39,501
MS-DRG 218--Cases with procedure codes for transcatheter cardiac               4             1.3          45,903
 valve repair...................................................
MS-DRG 219--All cases...........................................          15,105            10.9          55,423
MS-DRG 219--Cases with procedure codes for transcatheter cardiac              55             7.1          65,880
 valve repair...................................................
[[Page 19189]]

MS-DRG 220--All cases...........................................          15,889             6.6          38,313
MS-DRG 220--Cases with procedure codes for transcatheter cardiac              40               3          38,906
 valve repair...................................................
MS-DRG 221--All cases...........................................           2,652             4.7          33,577
MS-DRG 221--Cases with procedure codes for transcatheter cardiac              13             2.2          29,646
 valve repair...................................................
MS-DRG 228--All cases...........................................           5,583             9.2          46,613
MS-DRG 228--Cases with procedure code 02UG3JZ (Supplement mitral           1,688             5.6          49,569
 valve with synthetic substitute, percutaneous approach)........
MS-DRG 229--All cases...........................................           6,593             4.3          32,322
MS-DRG 229--Cases with procedure code 02UG3JZ (Supplement mitral           2,018             1.7          38,321
 valve with synthetic substitute, percutaneous approach)........
MS-DRG 273--All cases...........................................           7,785             6.9          27,200
MS-DRG 273--Cases with procedure codes for transcatheter cardiac               6             7.5          52,370
 valve repair...................................................
MS-DRG 274--All cases...........................................          20,434             2.3          22,771
MS-DRG 274--Cases with procedure codes for transcatheter cardiac               7             1.4          28,152
 valve repair...................................................
----------------------------------------------------------------------------------------------------------------
    As shown in the table, we found a total of 5,909 cases for MS-DRG
216 with an average length of stay of 16 days and average costs of
$70,435. Of those 5,909 cases, there were 48 cases reporting a
procedure code for a transcatheter cardiac valve repair with an average
length of stay of 12.6 days and average costs of $72,556. We found a
total of 2,166 cases for MS-DRG 217 with an average length of stay of
9.4 days and average costs of $47,299. Of those 2,166 cases, there was
a total of 25 cases reporting a procedure for a transcatheter cardiac
valve repair with an average length of stay of 3.4 days and average
costs of $40,707. We found a total of 268 cases for MS-DRG 218 with an
average length of stay of 6.8 days and average costs of $39,501. Of
those 268 cases, there were 4 cases reporting a procedure code for a
transcatheter cardiac valve repair with an average length of stay of
1.3 days and average costs of $45,903. We found a total of 15,105 cases
for MS-DRG 219 with an average length of stay of 10.9 days and average
costs of $55,423. Of those 15,105 cases, there were 55 cases reporting
a procedure code for a transcatheter cardiac valve repair with an
average length of stay of 7.1 days and average costs of $65,880. We
found a total of 15,889 cases for MS-DRG 220 with an average length of
stay of 6.6 days and average costs of $38,313. Of those 15,889 cases,
there were 40 cases reporting a procedure code for a transcatheter
cardiac valve repair with an average length of stay of 3 days and
average costs of $38,906. We found a total of 2,652 cases for MS-DRG
221 with an average length of stay of 4.7 days and average costs of
$33,577. Of those 2,652 cases, there were 13 cases reporting a
procedure code for a transcatheter cardiac valve repair with an average
length of stay of 2.2 days and average costs of $29,646.
    For MS-DRG 228, we found a total of 5,583 cases with an average
length of stay of 9.2 days and average costs of $46,613. Of those 5,583
cases, there were 1,688 cases reporting ICD-10-PCS procedure code
02UG3JZ (Supplement mitral valve with synthetic substitute,
percutaneous approach) with an average length of stay of 5.6 days and
average costs of $49,569. As noted previously, ICD-10-PCS procedure
code 02UG3JZ is the only endovascular cardiac valve repair with implant
procedure assigned to MS-DRGs 228 and 229. We found a total of 6,593
cases for MS-DRG 229 with an average length of stay of 4.3 days and
average costs of $32,322. Of those 6,593 cases, there were 2,018 cases
reporting ICD-10-PCS procedure code 02UG3JZ with an average length of
stay of 1.7 days and average costs of $38,321.
    For MS-DRG 273, we found a total of 7,785 cases with an average
length of stay of 6.9 days and average costs of $27,200. Of those 7,785
cases, there were 6 cases reporting a procedure code for a
transcatheter cardiac valve repair with an average length of stay of
7.5 days and average costs of $52,370. We found a total of 20,434 cases
in MS-DRG 274 with an average length of stay of 2.3 days and average
costs of $22,771. Of those 20,434 cases, there were 7 cases reporting a
procedure code for a transcatheter cardiac valve repair with an average
length of stay of 1.4 days and average costs of $28,152.
    We also analyzed cases reporting any one of the procedure codes
listed above describing a transcatheter cardiac valve replacement
procedure in MS-DRGs 266 and 267. Our findings are shown in the table
below.
                         MS-DRGs for Transcatheter Cardiac Valve Replacement Procedures
----------------------------------------------------------------------------------------------------------------
                                                                     Number of    Average length
                             MS-DRG                                    cases          of stay      Average costs
----------------------------------------------------------------------------------------------------------------
MS-DRG 266--All cases...........................................          15,079             5.6         $51,402
MS-DRG 267--All cases...........................................          20,845             2.4          41,891
----------------------------------------------------------------------------------------------------------------
    As shown in the table, there was a total of 15,079 cases with an
average length of stay of 5.6 days and average costs of $51,402 in MS-
DRG 266. For MS-DRG 267, there was a total of 20,845 cases with an
average length of stay of 2.4 days and average costs of $41,891.
    As stated previously, the requestor noted that ICD-10-PCS procedure
code 02UG3JZ describing a transcatheter mitral valve repair with
implant procedure is the only endovascular cardiac valve intervention
with implant procedure assigned to MS-DRGs 228 and 229. The data
analysis shows that for the cases reporting procedure code 02UG3JZ in
MS-DRGs 228 and 229, the average length of stay and average costs are
aligned with the average length of stay and average costs of cases in
MS-DRGs 266 and 267, respectively.
    The data also show that, for MS-DRGs 216, 217, 218, 219, 220, and
221 and for
[[Page 19190]]
MS-DRG 274, the average length of stay for cases reporting a
transcatheter cardiac valve with implant procedure is shorter than the
average length of stay for all the cases in their assigned MS-DRG. For
MS-DRG 273, the average length of stay for cases reporting a
transcatheter cardiac valve with implant procedure is slightly longer
(7.5 days versus 6.9 days). In addition, the average costs for the
cases reporting a transcatheter cardiac valve with implant procedure
are higher when compared to all the cases in their assigned MS-DRG with
the exception of MS-DRG 217 ($40,707 versus $47,299) and MS-DRG 221
($29,646 versus $33,577).
    Our clinical advisors continue to believe that transcatheter
cardiac valve repair procedures are not the same as a transcatheter
(endovascular) cardiac valve replacement. However, they agree with the
requestor and, based on our data analysis, that these procedures are
more clinically coherent in that they also describe endovascular
cardiac valve interventions with implants and are similar in terms of
average length of stay and average costs to cases in MS-DRGs 266 and
267 when compared to other procedures in their current MS-DRG
assignment. For these reasons, our clinical advisors agree that we
should propose to reassign the endovascular cardiac valve repair
procedures (supplement procedures) listed previously to the
endovascular cardiac valve replacement MS-DRGs.
    We analyzed the impact of grouping the endovascular cardiac valve
repair with implant (supplement) procedures with the endovascular
cardiac valve replacement procedures. The following table reflects our
findings for the proposed revised endovascular cardiac valve
(supplement) procedures with the endovascular cardiac valve replacement
MS-DRGs with a 2-way severity level split.
          Proposed Revised MS-DRGs for Endovascular Cardiac Valve Replacement and Supplement Procedures
----------------------------------------------------------------------------------------------------------------
                                                                     Number of    Average length
                             MS-DRG                                    cases          of stay      Average costs
----------------------------------------------------------------------------------------------------------------
MS-DRG 266 (Endovascular Cardiac Valve Replacement and                    16,922             5.7         $51,564
 Supplement Procedures with MCC)................................
MS-DRG 267 (Endovascular Cardiac Valve Replacement and                    22,958             2.4         41,563.
 Supplement Procedures without MCC).............................
----------------------------------------------------------------------------------------------------------------
    As shown in the table, there was a total of 16,922 cases for the
endovascular cardiac valve replacement and supplement procedures with
MCC group, with an average length of stay of 5.7 days and average costs
of $51,564. There was a total of 22,958 cases for the endovascular
cardiac valve replacement and supplement procedures without MCC group,
with an average length of stay of 2.4 days and average costs of
$41,563. We applied the criteria to create subgroups for the two-way
severity level split for the proposed revised MS-DRGs and found that
all five criteria were met. For the proposed revised MS-DRGs, there is
at least (1) 500 or more cases in the MCC group or in the without MCC
subgroup; (2) 5 percent or more of the cases in the MCC group or 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.
    During our review of the transcatheter cardiac valve repair
(supplement) procedures in MS-DRGs 216, 217, 218, 219, 220, and 221,
MS-DRGs 228 and 229, and MS-DRGs 273 and 274, our clinical advisors
recommended that we also analyze the claims data to identify other
(non-supplement) transcatheter (endovascular) procedures that involve
the cardiac valves and are assigned to those same MS-DRGs to determine
if additional modifications may be warranted, consistent with our
ongoing efforts to refine the ICD-10 MS-DRGs.
    We analyzed the following ICD-10-PCS procedure codes that are
currently assigned to MS-DRGs 216, 217, 218, 219, 220, and 221.
------------------------------------------------------------------------
           ICD-10-PCS code                        Description
------------------------------------------------------------------------
02QF3ZJ.............................  Repair aortic valve created from
                                       truncal valve, percutaneous
                                       approach.
02QF3ZZ.............................  Repair aortic valve, percutaneous
                                       approach.
02QG3ZE.............................  Repair mitral valve created from
                                       left atrioventricular valve,
                                       percutaneous approach.
02QG3ZZ.............................  Repair mitral valve, percutaneous
                                       approach.
02QH3ZZ.............................  Repair pulmonary valve,
                                       percutaneous approach.
02QJ3ZG.............................  Repair tricuspid valve created
                                       from right atrioventricular
                                       valve, percutaneous approach.
02QJ3ZZ.............................  Repair tricuspid valve,
                                       percutaneous approach.
02TH3ZZ.............................  Resection of pulmonary valve,
                                       percutaneous approach.
02VG3ZZ.............................  Restriction of mitral valve,
                                       percutaneous approach.
02WF38Z.............................  Revision of zooplastic tissue in
                                       aortic valve, percutaneous
                                       approach.
02WF3JZ.............................  Revision of synthetic substitute
                                       in aortic valve, percutaneous
                                       approach.
02WF3KZ.............................  Revision of nonautologous tissue
                                       substitute in aortic valve,
                                       percutaneous approach.
02WG37Z.............................  Revision of autologous tissue
                                       substitute in mitral valve,
                                       percutaneous approach.
02WG38Z.............................  Revision of zooplastic tissue in
                                       mitral valve, percutaneous
                                       approach.
02WG3JZ.............................  Revision of synthetic substitute
                                       in mitral valve, percutaneous
                                       approach.
02WG3KZ.............................  Revision of nonautologous tissue
                                       substitute in mitral valve,
                                       percutaneous approach.
02WH37Z.............................  Revision of autologous tissue
                                       substitute in pulmonary valve,
                                       percutaneous approach.
02WH38Z.............................  Revision of zooplastic tissue in
                                       pulmonary valve, percutaneous
                                       approach.
02WH3JZ.............................  Revision of synthetic substitute
                                       in pulmonary valve, percutaneous
                                       approach.
02WH3KZ.............................  Revision of nonautologous tissue
                                       substitute in pulmonary valve,
                                       percutaneous approach.
02WJ37Z.............................  Revision of autologous tissue
                                       substitute in tricuspid valve,
                                       percutaneous approach.
[[Page 19191]]

02WJ38Z.............................  Revision of zooplastic tissue in
                                       tricuspid valve, percutaneous
                                       approach.
02WJ3JZ.............................  Revision of synthetic substitute
                                       in tricuspid valve, percutaneous
                                       approach.
02WJ3KZ.............................  Revision of nonautologous tissue
                                       substitute in tricuspid valve,
                                       percutaneous approach.
------------------------------------------------------------------------
    We also analyzed ICD-10-PCS procedure code 02TH3ZZ (Resection of
pulmonary valve, percutaneous approach) that is currently assigned to
MS-DRGs 228 and 229. Lastly, we analyzed the following ICD-10-PCS
procedure codes that are currently assigned to MS-DRGs 273 and 274.
------------------------------------------------------------------------
           ICD-10-PCS code                        Description
------------------------------------------------------------------------
025F3ZZ.............................  Destruction of aortic valve,
                                       percutaneous approach.
025G3ZZ.............................  Destruction of mitral valve,
                                       percutaneous approach.
025H3ZZ.............................  Destruction of pulmonary valve,
                                       percutaneous approach.
025J3ZZ.............................  Destruction of tricuspid valve,
                                       percutaneous approach.
027F34Z.............................  Dilation of aortic valve with drug-
                                       eluting intraluminal device,
                                       percutaneous approach.
027F3DZ.............................  Dilation of aortic valve with
                                       intraluminal device, percutaneous
                                       approach.
027F3ZZ.............................  Dilation of aortic valve,
                                       percutaneous approach.
027G34Z.............................  Dilation of mitral valve with drug-
                                       eluting intraluminal device,
                                       percutaneous approach.
027G3DZ.............................  Dilation of mitral valve with
                                       intraluminal device, percutaneous
                                       approach.
027G3ZZ.............................  Dilation of mitral valve,
                                       percutaneous approach.
027H34Z.............................  Dilation of pulmonary valve with
                                       drug-eluting intraluminal device,
                                       percutaneous approach.
027H3DZ.............................  Dilation of pulmonary valve with
                                       intraluminal device, percutaneous
                                       approach.
027H3ZZ.............................  Dilation of pulmonary valve,
                                       percutaneous approach.
027J34Z.............................  Dilation of tricuspid valve with
                                       drug-eluting intraluminal device,
                                       percutaneous approach.
027J3DZ.............................  Dilation of tricuspid valve with
                                       intraluminal device, percutaneous
                                       approach.
027J3ZZ.............................  Dilation of tricuspid valve,
                                       percutaneous approach.
02BF3ZZ.............................  Excision of aortic valve,
                                       percutaneous approach.
02BG3ZZ.............................  Excision of mitral valve,
                                       percutaneous approach.
02BH3ZZ.............................  Excision of pulmonary valve,
                                       percutaneous approach.
02BJ3ZZ.............................  Excision of tricuspid valve,
                                       percutaneous approach.
------------------------------------------------------------------------
    We analyzed claims data from the September 2018 update of the FY
2018 MedPAR file for cases reporting any of the above listed procedure
codes in MS-DRGs 216, 217, 218, 219, 220, and 221, MS-DRGs 228 and 229,
and MS-DRGs 273 and 274. Our findings are shown in the following
tables. We note that there were no cases found in MS-DRGs 228 and 229
reporting ICD-10-PCS procedure code 02TH3ZZ (Resection of pulmonary
valve, percutaneous approach).
                            Other Cardiac Valve Procedures in MS-DRGs 216 Through 221
----------------------------------------------------------------------------------------------------------------
                                                                     Number of    Average length
        ICD-10-PCS code                    Description            times reported      of stay      Average costs
----------------------------------------------------------------------------------------------------------------
02QF3ZZ........................  Repair aortic valve,                         58             9.7         $33,588
                                  percutaneous approach.
02QG3ZE........................  Repair mitral valve created                   4             1.3          38,680
                                  from left atrioventricular
                                  valve, percutaneous approach.
02QG3ZZ........................  Repair mitral valve,                         40             3.4          30,160
                                  percutaneous approach.
02QH3ZZ........................  Repair pulmonary valve,                       1               1          33,014
                                  percutaneous approach.
02QJ3ZG........................  Repair tricuspid valve created                1               9          51,294
                                  from right atrioventricular
                                  valve, percutaneous approach.
02QJ3ZZ........................  Repair tricuspid valve,                      15               5          25,208
                                  percutaneous approach.
02VG3ZZ........................  Restriction of mitral valve,                 11             8.1          53,798
                                  percutaneous approach.
02WF38Z........................  Revision of zooplastic tissue                26             8.9          61,124
                                  in aortic valve, percutaneous
                                  approach.
02WF3JZ........................  Revision of synthetic                        37             7.1          26,605
                                  substitute in aortic valve,
                                  percutaneous approach.
02WF3KZ........................  Revision of nonautologous                     2               1          69,030
                                  tissue substitute in aortic
                                  valve, percutaneous approach.
02WG38Z........................  Revision of zooplastic tissue                 2             7.5          16,982
                                  in mitral valve, percutaneous
                                  approach.
02WG3JZ........................  Revision of synthetic                        31             7.3          28,682
                                  substitute in mitral valve,
                                  percutaneous approach.
02WH3JZ........................  Revision of synthetic                         1               6          30,340
                                  substitute in pulmonary valve,
                                  percutaneous approach.
02WJ3JZ........................  Revision of synthetic                         1               3          14,145
                                  substitute in tricuspid valve,
                                  percutaneous approach.
                                                                 -----------------------------------------------
    Total......................  ...............................             230             7.1          34,968
----------------------------------------------------------------------------------------------------------------
                              Other Cardiac Valve Procedures in MS-DRGs 273 and 274
----------------------------------------------------------------------------------------------------------------
                                                                     Number of    Average length
        ICD-10-PCS code                    Description            times reported      of stay      Average costs
----------------------------------------------------------------------------------------------------------------
025F3ZZ........................  Destruction of aortic valve,                  6             4.7         $11,130
                                  percutaneous approach.
[[Page 19192]]

025J3ZZ........................  Destruction of tricuspid valve,              21             3.9          18,320
                                  percutaneous approach.
027F34Z........................  Dilation of aortic valve with                 1              16          53,786
                                  drug-eluting intraluminal
                                  device, percutaneous approach.
027F3DZ........................  Dilation of aortic valve with                 5             8.4          20,951
                                  intraluminal device,
                                  percutaneous approach.
027F3ZZ........................  Dilation of aortic valve,                 1,720             8.6          25,265
                                  percutaneous approach.
027G3ZZ........................  Dilation of mitral valve,                    86             6.4          19,791
                                  percutaneous approach.
027H3ZZ........................  Dilation of pulmonary valve,                  5             3.8          10,506
                                  percutaneous approach.
02BJ3ZZ........................  Excision of tricuspid valve,                  1               4          30,843
                                  percutaneous approach.
                                                                 -----------------------------------------------
    Total......................  ...............................           1,845             8.4          24,851
----------------------------------------------------------------------------------------------------------------
    We found that the overall frequency with which cases reporting at
least one of the above ICD-10-PCS procedure codes were reflected in the
claims data was 2,075 times with an average length of stay of 8.5 days
and average costs of $27,838. ICD-10-PCS procedure code 027F3ZZ
(Dilation of aortic valve, percutaneous approach) had the highest
frequency of 1,720 times with an average length of stay of 8.6 days and
average costs of $25,265. We also found that cases reporting ICD-10-PCS
procedure code 02WF3KZ (Revision of nonautologous tissue substitute in
aortic valve, percutaneous approach) had the highest average costs of
$69,030 with an average length of stay of 1 day. While not displayed
above, we also note that, of the 7,785 cases found in MS-DRG 273, from
the remaining procedure codes describing procedures other than those
performed on a cardiac valve, there were 4,920 cases reporting ICD-10-
PCS procedure code 02583ZZ (Destruction of conduction mechanism,
percutaneous approach) with an average length of stay of 6.6 days and
average costs of $26,800, representing approximately 63 percent of all
the cases in that MS-DRG. In addition, of the 20,434 cases in MS-DRG
274, from the remaining procedure codes describing procedures other
than those performed on a cardiac valve, there were 9,268 cases
reporting ICD-10-PCS procedure code 02583ZZ (Destruction of conduction
mechanism, percutaneous approach) with an average length of stay of 3.2
days and average costs of $21,689, and 8,775 cases reporting ICD-10-PCS
procedure code 02L73DK (Occlusion of left atrial appendage with
intraluminal device, percutaneous approach) with an average length of
stay of 1.2 days and average costs of $25,476, representing
approximately 88 percent of all the cases in that MS-DRG.
    After analyzing the claims data to identify the overall frequency
with which the other (non-supplement) ICD-10-PCS procedure codes
describing a transcatheter (endovascular) cardiac valve procedure were
reported and assigned to MS-DRGs 216, 217, 218, 219, 220, and 221, MS-
DRGs 228 and 229, and MS-DRGs 273 and 274, our clinical advisors
suggested that these other cardiac valve procedures should be grouped
together because the procedure codes are describing procedures
performed on a cardiac valve with a percutaneous (transcatheter/
endovascular) approach, they can be performed in a cardiac
catheterization laboratory, they require that the interventional
cardiologist have special additional training and skills, and often
require additional ancillary procedures and equipment, such as trans-
esophageal echocardiography, be available at the time of the procedure.
Our clinical advisors noted that these procedures are generally
considered more complicated and resource-intensive, and form a
clinically coherent group. They also noted that the majority of
procedures currently being reported in MS-DRGs 273 and 274 are
procedures other than those involving a cardiac valve and, therefore,
believed that reassignment of the other (non-supplement) ICD-10-PCS
procedure codes describing a transcatheter (endovascular) cardiac valve
procedure would have minimal impact to those MS-DRGs.
    We then analyzed the impact of grouping the other transcatheter
cardiac valve procedures. The following table reflects our findings for
the suggested other endovascular cardiac valve procedures MS-DRGs with
a 2-way severity level split.
                        Suggested MS-DRGs for Other Endovascular Cardiac Valve Procedures
----------------------------------------------------------------------------------------------------------------
                                                                     Number of    Average length
                             MS-DRG                                    cases          of stay      Average costs
----------------------------------------------------------------------------------------------------------------
MS-DRG XXX (Other Endovascular Cardiac Valve Procedures with               1,527             9.7         $27,801
 MCC)...........................................................
MS-DRG XXX (Other Endovascular Cardiac Valve Procedures without              560             3.9          17,027
 MCC)...........................................................
----------------------------------------------------------------------------------------------------------------
    As shown in the table, there were 1,527 cases for the other
endovascular cardiac valve procedures with MCC group, with an average
length of stay of 9.7 days and average costs of $27,801. There was a
total of 560 cases for the other endovascular cardiac valve procedures
without MCC group, with an average length of stay of 3.9 days and
average costs of $17,027. We applied the criteria to create subgroups
for the two-way severity level split for the suggested MS-DRGs and
found that all five criteria were met. For the suggested MS-DRGs, there
is at least (1) 500 or more cases in the MCC group or in the without
MCC subgroup; (2) 5 percent or more of the cases in the MCC group or in
the without MCC subgroup; (3) a 20 percent difference in average costs
between the MCC group and the without MCC group; (4) at least 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.
[[Page 19193]]
    For FY 2020, we are proposing to modify the structure of MS-DRGs
266 and 267 by reassigning the procedure codes describing a
transcatheter cardiac valve repair (supplement) procedure from the list
above and to revise the title of these MS-DRGs. We are proposing to
revise the title of MS-DRGs 266 from ``Endovascular Cardiac Valve
Replacement with MCC'' to ``Endovascular Cardiac Valve Replacement and
Supplement Procedures with MCC'' and the title of MS-DRG 267 from
``Endovascular Cardiac Valve Replacement without MCC'' to
``Endovascular Cardiac Valve Replacement and Supplement Procedures
without MCC'', to reflect the proposed restructuring. We also are
proposing to create two new MS-DRGs with a two-way severity level split
for the remaining (non-supplement) transcatheter cardiac valve
procedures listed above. These proposed new MS-DRGs are proposed new
MS-DRG 319 (Other Endovascular Cardiac Valve Procedures with MCC) and
proposed new MS-DRG 320 (Other Endovascular Cardiac Valve Procedures
without MCC), which would also conform with the severity level split of
MS-DRGs 266 and 267. We are proposing to reassign the procedure codes
from their current MS-DRGs to the proposed new MS-DRGs.
b. Revision of Pacemaker Lead
    In the FY 2019 IPPS/LTCH PPS final rule (83 FR 41189 through
41190), we finalized our proposal to maintain the Version 35 ICD-10 MS-
DRG GROUPER logic for the Version 36 ICD-10 MS-DRG GROUPER logic within
MS-DRGs 260, 261, and 262 (Cardiac Pacemaker Revision Except Device
Replacement with MCC, with CC and without CC/MCC, respectively) so that
cases reporting any of the ICD-10-PCS procedure codes describing
procedures involving pacemakers and related procedures and associated
devices would continue to be assigned to those MS-DRGs under MDC 5
because they are reported when a pacemaker device requires revision and
they have a corresponding circulatory system diagnosis. We also
discussed and finalized the addition of ICD-10-PCS procedure codes
02H63MZ (Insertion of cardiac lead into right atrium, percutaneous
approach) and 02H73MZ (Insertion of cardiac lead into left atrium,
percutaneous approach) to the GROUPER logic as non-O.R. procedures that
impact the MS-DRG assignment when reported as stand-alone codes for the
insertion of a pacemaker lead within MS-DRGs 260, 261, and 262 in
response to a commenter's suggestion.
    After publication of the FY 2019 IPPS/LTCH PPS final rule, it was
brought to our attention that ICD-10-PCS procedure code 02H60JZ
(Insertion of pacemaker lead into right atrium, open approach) was
inadvertently omitted from the GROUPER logic for MS-DRGs 260, 261, and
262. This procedure code is designated as a non-O.R. procedure.
However, we note that, within MDC 5, in MS-DRGs 242, 243, and 244, this
procedure code is part of a code pair that requires another procedure
code (cluster). We are proposing to add procedure code 02H60JZ to the
list of non-O.R. procedures that would impact MS-DRGs 260, 261, and 262
when reported as a stand-alone procedure code, consistent with ICD-10-
PCS procedure codes 02H63JZ (Insertion of pacemaker lead into right
atrium, percutaneous approach) and 02H64JZ (Insertion of pacemaker lead
into right atrium, percutaneous endoscopic approach), which also
describe the insertion of a pacemaker lead into the right atrium. If
the proposal is finalized, we would make conforming changes to the ICD-
10 MS-DRG Definitions Manual Version 37.
6. MDC 8 (Diseases and Disorders of the Musculoskeletal System and
Connective Tissue)
a. Knee Procedures With Principal Diagnosis of Infection
    We received a request to add ICD-10-CM diagnosis codes M00.9
(Pyogenic arthritis, unspecified) and A54.42 (Gonococcal arthritis) to
the list of principal diagnoses for MS-DRGs 485, 486, and 487 (Knee
Procedure with Principal Diagnosis of Infection with MCC, with CC, and
without CC/MCC, respectively) in MDC 8. The requestor believed that
adding diagnosis code M00.9 is necessary to accurately recognize knee
procedures that are performed with a principal diagnosis of infectious
arthritis, including those procedures performed when the specific
infectious agent is unknown. The requestor stated that, currently, only
diagnosis codes describing infections caused by a specific bacterium
are included in MS-DRGs 485, 486, and 487. The requestor stated that
additional diagnosis codes such as M00.9 are indicated for knee
procedures performed as a result of infection because pyogenic
arthritis can reasonably be diagnosed based on the patient's history
and clinical symptoms, even if a bacterial infection is not confirmed
by culture. For example, the requestor noted that a culture may present
negative for infection if a patient has been treated with antibiotics
prior to knee surgery, but other clinical signs may indicate a
principal diagnosis of joint infection. In the absence of a culture
identifying an infection by a specific bacterium, the requestor stated
that ICD-10-CM diagnosis code M00.09 should also be included as a
principal diagnosis in MS-DRGs 485, 486, and 487.
    The requestor also asserted that ICD-10-CM diagnosis code A54.42
should be added to the list of principal diagnoses for MS-DRGs 485,
486, and 487 because gonococcal arthritis is also an infectious type of
arthritis that can be an indication for a knee procedure.
    Currently, cases reporting ICD-10-CM diagnosis codes M00.9 or
A54.42 as a principal diagnosis group to MS-DRGs 488 and 489 (Knee
Procedures without Principal Diagnosis of Infection with and without
CC/MCC, respectively) when a knee procedure is also reported on the
claim.
    We analyzed claims data from the September 2018 update of the FY
2018 MedPAR file for ICD-10-CM diagnosis codes M00.9 and A54.42, which
are currently assigned to medical MS-DRGs 548, 549, and 550 (Septic
Arthritis with MCC, with CC, and without CC/MCC, respectively) in the
absence of a surgical procedure. Our findings are shown in the
following table.
                  MS-DRGs for Septic Arthritis With Pyogenic Arthritis or Gonococcal Arthritis
----------------------------------------------------------------------------------------------------------------
                                                                     Number of    Average length
                             MS-DRG                                    cases          of stay      Average costs
----------------------------------------------------------------------------------------------------------------
MS-DRG 548--All cases...........................................             601             8.1         $13,974
MS-DRG 548--Cases with pyogenic arthritis as principal diagnosis             312             7.6          13,177
MS-DRG 549--All cases...........................................           1,169             5.0           8,547
MS-DRG 549--Cases with pyogenic arthritis as principal diagnosis             686             4.7           7,976
MS-DRG 549--Cases with gonococcal arthritis as principal                       2             8.0           7,070
 diagnosis......................................................
MS-DRG 550--All cases...........................................             402             3.5           6,317
[[Page 19194]]

MS-DRG 550--Cases with pyogenic arthritis as principal diagnosis             260             3.2           6,209
MS-DRG 550--Cases with gonococcal arthritis as principal                       3             2.3           3,929
 diagnosis......................................................
----------------------------------------------------------------------------------------------------------------
    As shown in the table, we found a total of 2,172 cases in MS-DRGs
548, 549, and 550. A total of 601 cases were reported in MS-DRG 548,
with an average length of stay of 8.1 days and average costs of
$13,974. Cases in MS-DRG 548 with a principal diagnosis of pyogenic
arthritis (ICD-10-CM diagnosis code M00.9) accounted for 312 of these
601 cases, and reported an average length of stay of 7.6 days and
average costs of $13,177. None of the cases in MS-DRG 548 had a
principal diagnosis of gonococcal arthritis (ICD-10-CM diagnosis code
A54.42).
    The total number of cases reported in MS-DRG 549 was 1,169, with an
average length of stay of 5 days and average costs of $8,547. Within
this MS-DRG, 686 cases had a principal diagnosis described by ICD-10-CM
diagnosis code M00.9, with an average length of stay of 4.7 days and
average costs of $7,976. Two of the cases reported in MS-DRG 549 had a
principal diagnosis described by ICD-10-CM diagnosis code A54.42. These
2 cases had an average length of stay of 8 days and average costs of
$7,070.
    The total number of cases reported in MS-DRG 550 was 402, with an
average length of stay of 3.5 days and average costs of $6,317. Within
this MS-DRG, 260 cases had a principal diagnosis described by ICD-10-CM
diagnosis code M00.9 with an average length of stay of 3.2 days and
average costs of $6,209. Three of the cases reported in MS-DRG 550 had
a principal diagnosis described by ICD-10-CM diagnosis code A54.42.
These 3 cases had an average length of stay of 2.3 days and average
costs of $3,929.
    In summary, for MS-DRGs 548, 549, and 550, there were 1,258 cases
that reported ICD-10-CM diagnosis code M00.9 as the principal diagnosis
and 5 cases that reported ICD-10-CM diagnosis code A54.42 as the
principal diagnosis. We note that, overall, our data analysis suggests
that the MS-DRG assignment for cases reporting ICD-10-CM diagnosis
codes M00.9 and A54.42 is appropriate based on the average costs and
average length of stay. However, it is unclear how many of these cases
involved infected knee joints because neither ICD-10-CM diagnosis code
M00.9 nor A54.42 is specific to the knee. We then analyzed claims data
for MS-DRGs 485, 486, and 487 (Knee Procedures with Principal Diagnosis
of Infection with MCC, with CC, and without CC/MCC, respectively) and
for MS-DRGs 488 and 489 (Knee Procedures without Principal Diagnosis of
Infection with and without CC/MCC, respectively). For MS-DRGs 488 and
489, we also analyzed claims data for cases reporting a knee procedure
with ICD-10-CM diagnosis code M00.9 or A54.42 as a principal diagnosis,
as these are the MS-DRGs to which such cases would currently group. Our
findings are shown in the following table.
                             MS-DRGs for Knee Procedures With and Without Infection
----------------------------------------------------------------------------------------------------------------
                                                                     Number of    Average length
                             MS-DRG                                    cases          of stay      Average costs
----------------------------------------------------------------------------------------------------------------
MS-DRG 485--All cases...........................................           1,021             9.7         $23,980
MS-DRG 486--All cases...........................................           2,260               6          16,060
MS-DRG 487--All cases...........................................             614             4.2          12,396
MS-DRG 488--All cases...........................................           2,857             4.8          14,197
MS-DRG 488--Cases with pyogenic arthritis as principal diagnosis             524             7.1          16,894
MS-DRG 489--All cases...........................................           2,416             2.4           9,217
MS-DRG 489--Cases with pyogenic arthritis as principal diagnosis             195             4.1           9,526
MS-DRG 489--Cases with gonococcal arthritis as principal                       1               8          10,810
 diagnosis......................................................
----------------------------------------------------------------------------------------------------------------
    As shown in the table, we found a total of 1,021 cases reported in
MS-DRG 485, with an average length of stay of 9.7 days and average
costs of $23,980. We found a total of 2,260 cases reported in MS-DRG
486, with an average length of stay of 6.0 days and average costs of
$16,060. The total number of cases reported in MS-DRG 487 was 614, with
an average length of stay of 4.2 days and average costs of $12,396. For
MS-DRG 488, we found a total of 2,857 cases with an average length of
stay of 4.8 days and average costs of $14,197. Of these 2,857 cases, we
found 524 cases that reported a principal diagnosis of pyogenic
arthritis (ICD-10-CM diagnosis code M00.9), with an average length of
stay of 7.1 days and average costs of $16,894. There were no cases
found that reported a principal diagnosis of gonococcal arthritis (ICD-
10-CM diagnosis code A54.42). For MS-DRG 489, we found a total of 2,416
cases with an average length of stay of 2.4 days and average costs of
$9,217. Of these 2,416 cases, we found 195 cases that reported a
principal diagnosis of pyogenic arthritis (ICD-10-CM diagnosis code
M00.9), with an average length of stay of 4.1 days and average costs of
$9,526. We found 1 case that reported a principal diagnosis of
gonococcal arthritis (ICD-10-CM diagnosis code A54.42) in MS-DRG 489,
with an average length of stay of 8 days and average costs of $10,810.
    Upon review of the data, we noted that the average costs and
average length of stay for cases reporting a principal diagnosis of
pyogenic arthritis (ICD-10-CM diagnosis code M00.9) in MS-DRG 488 are
higher than the average costs and average length of stay for all cases
in MS-DRG 488. We found similar results for MS-DRG 489 for the cases
reporting diagnosis code M00.9 or A54.42 as the principal diagnosis.
    As stated earlier, the requestor recommended that ICD-10-CM
diagnosis codes M00.9 and A54.42 be added to the list of principal
diagnoses in MS-DRGs 485, 486, and 487 to recognize knee procedures
that are performed with a principal diagnosis of an infectious type of
arthritis. Because these diagnosis codes are not specific to the knee
in the code description, we
[[Page 19195]]
examined the ICD-10-CM Alphabetic Index to review the entries that
refer and correspond to these diagnosis codes. Specifically, we
searched the Index for codes M00.9 and A54.42 and found the following
entries.
[GRAPHIC] [TIFF OMITTED] TP03MY19.000
    Our clinical advisors agreed that the results of our ICD-10-CM
Alphabetic Index review combined with the data analysis results support
the addition of ICD-10-CM diagnosis code M00.9 to the list of principal
diagnoses of infection for MS-DRGs 485, 486, and 487. The entries for
diagnosis code M00.9 include infection of the knee, and as discussed
above, in our data analysis, we found cases reporting ICD-10-CM
diagnosis code M00.9 as a principal diagnosis in MS-DRGs 488 and 489,
indicating that knee procedures are, in fact, being performed for an
infectious arthritis of the knee. In addition, the average costs for
cases reporting a principal diagnosis code of pyogenic arthritis (ICD-
10-CM diagnosis code M00.9) in MS-DRG 488 are similar to the average
costs of cases in MS-DRG 486 ($16,894 and $16,060, respectively).
Because MS-DRG 488 includes cases with a CC or an MCC, we reviewed how
many of the 524 cases reporting a principal diagnosis code of pyogenic
arthritis (ICD-10-CM diagnosis code M00.9) were reported with a CC or
an MCC. We found that there were 361 cases reporting a CC with an
average length of stay of 6 days and average costs of $14,092 and 163
cases reporting an MCC with an average length of stay of 9.5 days and
average costs of $23,100. Therefore, the cases in MS-DRG 488 reporting
a principal diagnosis code of pyogenic arthritis (ICD-10-CM diagnosis
code M00.9) with an MCC have average costs that are consistent with the
average costs of cases in MS-DRG 485 ($23,100 and $23,980,
respectively), and the cases with a CC have average costs that are
consistent with the average costs of cases in MS-DRG 486 ($14,092 and
$16,060, respectively), as noted above.
[[Page 19196]]
We also note that the average length of stay for cases reporting a
principal diagnosis code of pyogenic arthritis (ICD-10-CM diagnosis
code M00.9) with an MCC in MS-DRG 488 is similar to the average length
of stay for cases in MS-DRG 485 (9.5 days and 9.7 days, respectively),
and the cases with a CC have an average length of stay that is
equivalent to the average length of stay for cases in MS-DRG 486 (6
days and 6 days, respectively). We further note that the average length
of stay for cases reporting a principal diagnosis code of pyogenic
arthritis (ICD-10-CM diagnosis code M00.9) in MS-DRG 489 is similar to
the average length of stay for cases in MS DRG 487 (4.1 days and 4.2
days, respectively). Lastly, the average costs for cases reporting a
principal diagnosis code of pyogenic arthritis (ICD-10-CM diagnosis
code M00.9) in MS-DRG 489 are consistent with the average costs for
cases in MS-DRG 487 ($9,526 and $12,396, respectively), with a
difference of $2,870. For these reasons, we are proposing to add ICD-
10-CM diagnosis code M00.9 to the list of principal diagnosis codes for
MS-DRGs 485, 486, and 487.
    Our clinical advisors did not support the addition of ICD-10-CM
diagnosis code A54.42 to the list of principal diagnosis codes for MS-
DRGs 485, 486, and 487 because ICD-10-CM diagnosis code A54.42 is not
specifically indexed to include the knee or any infection in the knee.
Therefore, we are not proposing to add ICD-10-CM diagnosis code A54.42
to the list of principal diagnosis codes for these MS-DRGs.
    Upon review of the existing list of principal diagnosis codes for
MS-DRGs 485, 486, and 487, our clinical advisors recommended that we
review the following ICD-10-CM diagnosis codes currently included on
the list of principal diagnosis codes because the codes are not
specific to the knee.
------------------------------------------------------------------------
      ICD-10-CM code                      Code description
------------------------------------------------------------------------
M86.9.....................  Osteomyelitis, unspecified.
T84.50XA..................  Infection and inflammatory reaction due to
                             unspecified internal joint prosthesis,
                             initial encounter.
T84.51XA..................  Infection and inflammatory reaction due to
                             internal right hip prosthesis, initial
                             encounter.
T84.52XA..................  Infection and inflammatory reaction due to
                             internal left hip prosthesis, initial
                             encounter.
T84.59XA..................  Infection and inflammatory reaction due to
                             other internal joint prosthesis, initial
                             encounter.
T84.60XA..................  Infection and inflammatory reaction due to
                             internal fixation device of unspecified
                             site, initial encounter.
T84.63XA..................  Infection and inflammatory reaction due to
                             internal fixation device of spine, initial
                             encounter.
T84.69XA..................  Infection and inflammatory reaction due to
                             internal fixation device of other site,
                             initial encounter.
------------------------------------------------------------------------
    These ICD-10-CM diagnosis codes are currently assigned to medical
MS-DRGs 559, 560, and 561 (Aftercare, Musculoskeletal System and
Connective Tissue with MCC, with CC, and without CC/MCC, respectively)
within MDC 8 in the absence of a surgical procedure. Similar to the
process described above, we examined the ICD-10-CM Alphabetic Index to
review the entries that refer and correspond to the diagnosis codes
shown in the table above. We found the following entries.
------------------------------------------------------------------------

-------------------------------------------------------------------------
Index entries referring to M86.9: Osteomyelitis (general) (infective)
 (localized) (neonatal) (purulent) (septic) (staphylococcal)
 (streptococcal) (suppurative) (with periostitis).
Index entries referring to T84.50XA:Complication(s) (from) (of) > joint
 prosthesis, internal > infection or inflammation Infection, infected,
 infective (opportunistic) > joint NEC > due to internal joint
 prosthesis.
Index entries referring to T84.51XA: Infection, infected, infective
 (opportunistic) > hip (joint) NEC > due to internal joint prosthesis >
 right.
Index entries referring to T84.52XA: Infection, infected, infective
 (opportunistic) > hip (joint) NEC > due to internal joint prosthesis >
 left.
Index entries referring to T84.59XA: Complication(s) (from) (of) > joint
 prosthesis, internal > infection or inflammation > specified joint NEC
 Infection, infected, infective (opportunistic) > shoulder (joint) NEC >
 due to internal joint prosthesis.
Index entries referring to T84.60XA: Complication(s) (from) (of) >
 fixation device, internal (orthopedic) > infection and inflammation.
Index entries referring to T84.63XA: Complication(s) (from) (of) >
 fixation device, internal (orthopedic) > infection and inflammation >
 spine.
Index entries referring to T84.69XA: Complication(s) (from) (of) >
 fixation device, internal (orthopedic) > infection and inflammation >
 specified site NEC.
------------------------------------------------------------------------
    The Index entries for the ICD-10-CM diagnosis codes listed above
reflect terms relating to an infection. However, none of the entries is
specific to the knee. In addition, we note that there are other
diagnosis codes in the subcategory T84.5- series (Infection and
inflammatory reaction due to internal joint prosthesis) that are
specific to the knee. For example, ICD-10-CM diagnosis code T84.53X-
(Infection and inflammatory reaction due to internal right knee
prosthesis) or ICD-10-CM diagnosis code T84.54X- (Infection and
inflammatory reaction due to internal left knee prosthesis) with the
appropriate 7th digit character to identify initial encounter,
subsequent encounter or sequela, would be reported to identify a
documented infection of the right or left knee due to an internal
prosthesis. We further note that these ICD-10-CM diagnosis codes
(T84.53X- and T84.54X-) with the 7th character ``A'' for initial
encounter are currently already in the list of principal diagnosis
codes for MS-DRGs 485, 486, and 487.
    Our clinical advisors support the removal of the above ICD-10-CM
diagnosis codes from the list of principal diagnosis codes for MS-DRGs
485, 486, and 487 because they are not specifically indexed to include
an infection of the knee and there are other diagnosis codes in the
subcategory T84.5- series that uniquely identify an infection and
inflammatory reaction of the right or left knee due to an internal
prosthesis as noted above.
    We also analyzed claims data for MS-DRGs 485, 486 and 487 to
identify cases reporting one of the above listed ICD-10-CM diagnosis
codes not specific to the knee as a principal diagnosis. Our findings
are shown in the following table.
[[Page 19197]]
----------------------------------------------------------------------------------------------------------------
                                                                     Number of    Average length
                             MS-DRG                                    cases          of stay      Average costs
----------------------------------------------------------------------------------------------------------------
MS-DRG 485--Cases reporting principal diagnosis code not                      13            11.2         $30,765
 specific to the knee...........................................
MS-DRG 486--Cases reporting principal diagnosis code not                      43             6.5          15,837
 specific to the knee...........................................
MS-DRG 487--Cases reporting principal diagnosis code not                       7             2.6          11,362
 specific to the knee...........................................
----------------------------------------------------------------------------------------------------------------
    For MS-DRG 485, we found 13 cases reporting one of the diagnosis
codes not specific to the knee as a principal diagnosis with an average
length of stay of 11.2 days and average costs of $30,765. For MS-DRG
486, we found 43 cases reporting one of the diagnosis codes not
specific to the knee as a principal diagnosis with an average length of
stay of 6.5 days and average costs of $15,837. For MS-DRG 487, we found
7 cases reporting one of the diagnosis codes not specific to the knee
as a principal diagnosis with an average length of stay of 2.6 days and
average costs of $11,362.
    Overall, for MS-DRGs 485, 486, and 487, there were a total of 63
cases reporting one of the ICD-10-CM diagnosis codes not specific to
the knee as a principal diagnosis with an average length of stay of 7
days and average costs of $18,421. Of those 63 cases, there were 32
cases reporting a principal diagnosis code from the ICD-10-CM
subcategory T84.5-series (Infection and inflammatory reaction due to
internal joint prosthesis); 23 cases reporting a principal diagnosis
code from the ICD-10-CM subcategory T84.6-series (Infection and
inflammatory reaction due to internal fixation device), with 22 of the
23 cases reporting ICD-10-CM diagnosis code T84.69XA (Infection and
inflammatory reaction due to internal fixation device of other site,
initial encounter) and 1 case reporting ICD-10-CM diagnosis code
T84.63XA (Infection and inflammatory reaction due to internal fixation
device of spine, initial encounter); and 8 cases reporting ICD-10-CM
diagnosis code M86.9 (Osteomyelitis, unspecified) as a principal
diagnosis.
    Our clinical advisors believe that there may have been coding
errors among the 63 cases reporting a principal diagnosis of infection
not specific to the knee. For example, 32 cases reported a principal
diagnosis code from the ICD-10-CM subcategory T84.5-series (Infection
and inflammatory reaction due to internal joint prosthesis) that was
not specific to the knee and, as stated previously, there are other
codes in this subcategory that uniquely identify an infection and
inflammatory reaction of the right or left knee due to an internal
prosthesis.
    Based on the results of our claims analysis and input from our
clinical advisors, we are proposing to remove the following ICD-10-CM
diagnosis codes that do not describe an infection of the knee from the
list of principal diagnosis codes for MS-DRGs 485, 486, and 487: M86.9;
T84.50XA; T84.51XA; T84.52XA; T84.59XA; T84.60XA; T84.63XA; and
T84.69XA. We are not proposing to change the current assignment of
these diagnosis codes in MS-DRGs 559, 560, and 561.
    In addition, our clinical advisors recommended that we add the
following ICD-10-CM diagnosis codes as principal diagnosis codes for
MS-DRGs 485, 486, and 487 because they are specific to the knee and
describe an infection.
------------------------------------------------------------------------
      ICD-10-CM code                      Code description
------------------------------------------------------------------------
A18.02....................  Tuberculous arthritis of other joints.
M01.X61...................  Direct infection of right knee in infectious
                             and parasitic diseases classified
                             elsewhere.
M01.X62...................  Direct infection of left knee in infectious
                             and parasitic diseases classified
                             elsewhere.
M01.X69...................  Direct infection of unspecified knee in
                             infectious and parasitic diseases
                             classified elsewhere.
M71.061...................  Abscess of bursa, right knee.
M71.062...................  Abscess of bursa, left knee.
M71.069...................  Abscess of bursa, unspecified knee.
M71.161...................  Other infective bursitis, right knee.
M71.162...................  Other infective bursitis, left knee.
M71.169...................  Other infective bursitis, unspecified knee.
------------------------------------------------------------------------
    ICD-10-CM diagnosis code A18.02 (Tuberculous arthritis of other
joints) is currently assigned to medical MS-DRGs 548, 549, and 550
(Septic Arthritis with MCC, with CC, and without CC/MCC, respectively)
within MDC 8 and MS-DRGs 974, 975, and 976 (HIV with Major Related
Condition with MCC, with CC, and without CC/MCC, respectively) within
MDC 25 (Human Immunodeficiency Virus Infections) in the absence of a
surgical procedure. ICD-10-CM diagnosis codes M01.X61 (Direct infection
of right knee in infectious and parasitic diseases classified
elsewhere), M01.X62 (Direct infection of left knee in infectious and
parasitic diseases classified elsewhere), and M01.X69 (Direct infection
of unspecified knee in infectious and parasitic diseases classified
elsewhere) are currently assigned to medical MS-DRGs 548, 549, and 550
(Septic Arthritis with MCC, with CC, and without CC/MCC, respectively)
within MDC 8 in the absence of a surgical procedure. ICD-10-CM
diagnosis codes M71.061 (Abscess of bursa, right knee), M71.062
(Abscess of bursa, left knee), M71.069 (Abscess of bursa, unspecified
knee), M71.161 (Other infective bursitis, right knee), M71.162 (Other
infective bursitis, left knee), and M71.169 (Other infective bursitis,
unspecified knee) are currently assigned to medical MS-DRGs 557 and 558
(Tendonitis, Myositis and Bursitis with and without MCC, respectively)
within MDC 8 in the absence of a surgical procedure.
    Similar to the process described above, we examined the ICD-10-CM
Alphabetic Index to review the entries that refer and correspond to the
diagnosis codes shown in the table above. We found the following
entries.
BILLING CODE 4120-01-P
[[Page 19198]]
[GRAPHIC] [TIFF OMITTED] TP03MY19.001
[[Page 19199]]
[GRAPHIC] [TIFF OMITTED] TP03MY19.002
[[Page 19200]]
[GRAPHIC] [TIFF OMITTED] TP03MY19.003
BILLING CODE 4120-01-C
    We note that there were no Index entries specifically for ICD-10-CM
diagnosis codes M71.061, M71.062, M71.069, M71.161, M71.162, and
M71.169. Rather, there were Index entries at the subcategory levels of
M71.06- and M71.16-. We found the following entries.
[[Page 19201]]
------------------------------------------------------------------------

-------------------------------------------------------------------------
Index entry referring to M71.06-: (connective tissue) (embolic)
 (fistulous) (infective) (metastatic) (multiple) (pernicious) (pyogenic)
 (septic) > bursa > knee.
Index entry referring to M71.16-: Infective NEC > knee.
------------------------------------------------------------------------
    Our clinical advisors agreed that the results of our review of the
ICD-10-CM Alphabetic Index support the addition of these ICD-10-CM
diagnosis codes to MS-DRGs 485, 486, and 487 because the Index entries
and/or the code descriptions clearly describe or include an infection
that is specific to the knee.
    Therefore, we are proposing to add the following ICD-10-CM
diagnosis codes to the list of principal diagnosis codes for MS-DRGs
485, 486, and 487: A18.02; M01.X61; M01.X62; M01.X69; M71.061; M71.062;
M71.069; M71.161; M71.162; and M71.169.
b. Neuromuscular Scoliosis
    We received a request to add ICD-10-CM diagnosis codes describing
neuromuscular scoliosis to the list of principal diagnosis codes for
MS-DRGs 456, 457, and 458 (Spinal Fusion except Cervical with Spinal
Curvature or Malignancy or Infection or Extensive Fusions with MCC,
with CC, and without CC/MCC, respectively). Excluding the ICD-10-CM
diagnosis codes that address the cervical spine, the following ICD-10-
CM diagnosis codes are used to describe neuromuscular scoliosis.
------------------------------------------------------------------------
      ICD-10-CM code                      Code description
------------------------------------------------------------------------
M41.40....................  Neuromuscular scoliosis, site unspecified.
M41.44....................  Neuromuscular scoliosis, thoracic region.
M41.45....................  Neuromuscular scoliosis, thoracolumbar
                             region.
M41.46....................  Neuromuscular scoliosis, lumbar region.
M41.47....................  Neuromuscular scoliosis, lumbosacral region.
------------------------------------------------------------------------
    The requestor asserted that all levels of neuromuscular scoliosis,
except cervical, should group to the non-cervical spinal fusion MS-DRGs
for spinal curvature (MS-DRGs 456, 457, and 458). The requestor also
noted that the current MS-DRG logic only groups cases reporting
neuromuscular scoliosis to MS-DRGs 456, 457, and 458 when neuromuscular
scoliosis is reported as a secondary diagnosis. The requestor contended
that it would be rare for a diagnosis of neuromuscular scoliosis to be
reported as a secondary diagnosis because there is not a ``code first''
note in the ICD-10-CM Tabular List of Diseases and Injuries indicating
to ``code first'' the underlying cause. According to the requestor,
when a diagnosis of neuromuscular scoliosis is the reason for an
admission for non-cervical spinal fusion, neuromuscular scoliosis must
be sequenced as the principal diagnosis because it is the chief
condition responsible for the admission. However, this sequencing,
which adheres to the ICD-10-CM Official Guidelines for Coding and
Reporting, prevents the admission from grouping to the non-cervical
spinal fusion MS-DRGs for spinal curvature caused by neuromuscular
scoliosis.
    We analyzed claims data from the September 2018 update of the FY
2018 MedPAR file for cases reporting any of the ICD-10-CM diagnosis
codes describing neuromuscular scoliosis (as listed previously) as a
principal diagnosis with a non-cervical spinal fusion, which are
currently assigned to MS-DRGs 459 and 460 (Spinal Fusion except
Cervical with MCC and without MCC, respectively). Our findings are
shown in the following table.
   MS-DRGs for Cases Involving Non-Cervical Spinal Fusion With Principal Diagnosis of Neuromuscular Scoliosis
----------------------------------------------------------------------------------------------------------------
                                                                     Number of    Average length
                             MS-DRG                                    cases          of stay      Average costs
----------------------------------------------------------------------------------------------------------------
MS-DRG 459--All cases...........................................           3,903             8.6         $46,416
MS-DRG 459--Cases with principal diagnosis of neuromuscular                    3            15.3          95,745
 scoliosis......................................................
MS-DRG 460--All cases...........................................          52,597             3.3          28,754
MS-DRG 460--Cases with principal diagnosis of neuromuscular                    8             4.3          71,406
 scoliosis......................................................
----------------------------------------------------------------------------------------------------------------
    The data reveal that there was a total of 56,500 cases in MS-DRGs
459 and 460. We found 3,903 cases reported in MS-DRG 459, with an
average length of stay of 8.6 days and average costs of $46,416. Of
these 3,903 cases, 3 reported a principal diagnosis code of
neuromuscular scoliosis, with an average length of stay of 15.3 days
and average costs of $95,745. We found a total of 52,597 cases in MS-
DRG 460, with an average length of stay of 3.3 days and average costs
of $28,754. Of these 52,597 cases, 8 cases reported a principal
diagnosis code describing neuromuscular scoliosis, with an average
length of stay of 4.3 days and average costs of $71,406. The data
clearly demonstrate that the average costs and average length of stay
for the small number of cases reporting a principal diagnosis of
neuromuscular scoliosis are higher in comparison to all the cases in
their assigned MS-DRG.
    We also analyzed claims data for MS-DRGs 456, 457, and 458 (Spinal
Fusion except Cervical with Spinal Curvature or Malignancy or Infection
or Extensive Fusions with MCC, with CC, and without CC/MCC,
respectively) to identify the spinal fusion cases reporting any of the
ICD-10-CM codes describing neuromuscular scoliosis (as listed
previously) as a secondary diagnosis. Our findings are shown in the
following table.
[[Page 19202]]
   MS-DRGs for Cases Involving Non-Cervical Spinal Fusion With Spinal Curvature or Malignancy or Infection or
                      Extensive Fusions With Secondary Diagnosis of Neuromuscular Scoliosis
----------------------------------------------------------------------------------------------------------------
                                                                     Number of    Average length
                             MS-DRG                                    cases          of stay      Average costs
----------------------------------------------------------------------------------------------------------------
MS-DRG 456--All cases...........................................           1,344            12.0         $66,012
MS-DRG 456--Cases with secondary diagnosis of neuromuscular                    6            18.2          79,809
 scoliosis......................................................
MS-DRG 457--All cases...........................................           3,654             6.2          47,577
MS-DRG 457--Cases with secondary diagnosis of neuromuscular                   12             4.5          31,646
 scoliosis......................................................
MS-DRG 458--All cases...........................................           1,245             3.4          34,179
MS-DRG 458--Cases with secondary diagnosis of neuromuscular                    6             3.3          31,117
 scoliosis......................................................
----------------------------------------------------------------------------------------------------------------
    The data indicate that there were 1,344 cases reported in MS-DRG
456, with an average length of stay of 12 days and average costs of
$66,012. Of these 1,344 cases, 6 cases reported a secondary diagnosis
code describing neuromuscular scoliosis, with an average length of stay
of 18.2 days and average costs of $79,809. We found a total of 3,654
cases in MS-DRG 457, with an average length of stay of 6.2 days and
average costs of $47,577. Twelve of these 3,654 cases reported a
secondary diagnosis code describing neuromuscular scoliosis, with an
average length of stay of 4.5 days and average costs of $31,646.
Finally, the 1,245 cases reported in MS-DRG 458 had an average length
of stay of 3.4 days and average costs of $34,179. Of these 1,245 cases,
6 cases reported neuromuscular scoliosis as a secondary diagnosis, with
an average length of stay of 3.3 days and average costs of $31,117.
    We reviewed the ICD-10-CM Tabular List of Diseases for subcategory
M41.4 and confirmed there is a ``Code also underlying condition'' note.
We also reviewed the ICD-10-CM Official Guidelines for Coding and
Reporting for the ``code also'' note at Section 1.A.12.b., which
states: ``A `code also' note instructs that two codes may be required
to fully describe a condition, but this note does not provide
sequencing direction.'' Our clinical advisors agree that the sequencing
of the ICD-10-CM diagnosis codes is determined by which condition leads
to the encounter and is responsible for the admission. They also note
that there may be instances in which the underlying cause of the
diagnosis of neuromuscular scoliosis is not treated or responsible for
the admission.
    As discussed earlier, our review of the claims data shows that a
small number of cases reported neuromuscular scoliosis either as a
principal diagnosis in MS-DRGs 459 and 460 or as a secondary diagnosis
in MS-DRGs 456, 457, and 458. Our clinical advisors agree that while
the volume of cases is small, the average costs and average length of
stay for the cases reporting neuromuscular scoliosis as a principal
diagnosis with a non-cervical spinal fusion currently grouping to MS-
DRGs 459 and 460 are more aligned with the average costs and average
length of stay for the cases reporting neuromuscular scoliosis as a
secondary diagnosis with a non-cervical spinal fusion currently
grouping to MS-DRGs 456, 457, and 458. Therefore, for the reasons
described above, we are proposing to add the following ICD-10-CM codes
describing neuromuscular scoliosis to the list of principal diagnosis
codes for MS-DRGs 456, 457, and 458: M41.40; M41.44; M41.45; M41.46;
and M41.47.
c. Secondary Scoliosis and Secondary Kyphosis
    We received a request to add ICD-10-CM diagnosis codes describing
secondary scoliosis and secondary kyphosis to the list of principal
diagnoses for MS-DRGs 456, 457, and 458 (Spinal Fusion except Cervical
with Spinal Curvature or Malignancy or Infection or Extensive Fusions
with MCC, with CC, and without CC/MCC, respectively). Excluding the
ICD-10-CM diagnosis codes that address the cervical spine, the
following ICD-10-CM diagnosis codes are used to describe secondary
scoliosis.
------------------------------------------------------------------------
      ICD-10-CM code                      Code description
------------------------------------------------------------------------
M41.50....................  Other secondary scoliosis, site unspecified.
M41.54....................  Other secondary scoliosis, thoracic region.
M41.55....................  Other secondary scoliosis, thoracolumbar
                             region.
M41.56....................  Other secondary scoliosis, lumbar region.
M41.57....................  Other secondary scoliosis, lumbosacral
                             region.
------------------------------------------------------------------------
    Excluding the ICD-10-CM diagnosis codes that address the cervical
spine, the following ICD-10-CM diagnosis codes are used to describe
secondary kyphosis.
------------------------------------------------------------------------
      ICD-10-CM code                      Code description
------------------------------------------------------------------------
M40.10....................  Other secondary kyphosis, site unspecified.
M40.14....................  Other secondary kyphosis, thoracic region.
M40.15....................  Other secondary kyphosis, thoracolumbar
                             region.
------------------------------------------------------------------------
    The requestor stated that generally in cases of diagnoses of
secondary scoliosis or kyphosis, the underlying cause of the condition
is not treated or is not responsible for the admission. If a patient is
admitted for surgery to correct non-cervical spinal curvature, it is
appropriate to sequence the diagnosis of secondary scoliosis or
secondary kyphosis as principal diagnosis. However, reporting a
diagnosis of secondary scoliosis or secondary
[[Page 19203]]
kyphosis as the principal diagnosis with a non-cervical spinal fusion
procedure results in the case grouping to MS-DRG 459 or 460 (Spinal
Fusion except Cervical with MCC and without MCC, respectively), instead
of the spinal fusion with spinal curvature MS-DRGs 456, 457, and 458.
    We analyzed claims data from the September 2018 update of the FY
2018 MedPAR file for MS-DRGs 459 and 460 to determine the number of
cases reporting an ICD-10-CM diagnosis code describing secondary
scoliosis or secondary kyphosis as the principal diagnosis. Our
findings are shown in the following table.
   MS-DRGs for Cases Involving Non-Cervical Spinal Fusion With a Principal Diagnosis of Secondary Scoliosis or
                                               Secondary Kyphosis
----------------------------------------------------------------------------------------------------------------
                                                                     Number of        Average
                             MS-DRG                                    cases      length of stay   Average costs
----------------------------------------------------------------------------------------------------------------
MS-DRG 459--All cases...........................................           3,903             8.6         $46,416
MS-DRG 459--Cases with a principal diagnosis of secondary                      4             7.3          56,024
 scoliosis......................................................
MS-DRG 459--Cases with a principal diagnosis of secondary                      4             5.8          41,883
 kyphosis.......................................................
MS-DRG 460--All cases...........................................          52,597             3.3          28,754
MS-DRG 460--Cases with a principal diagnosis of secondary                     34             3.6          34,424
 scoliosis......................................................
MS-DRG 460--Cases with a principal diagnosis of secondary                     31             4.6          42,315
 kyphosis.......................................................
----------------------------------------------------------------------------------------------------------------
    As shown in the table, we found a total of 3,903 cases in MS-DRG
459, with an average length of stay of 8.6 days and average costs of
$46,416. Of these 3,903 cases, we found 4 cases that reported a
principal diagnosis of secondary scoliosis, with an average length of
stay of 7.3 days and average costs of $56,024. We also found 4 cases
that reported a principal diagnosis of secondary kyphosis, with an
average length of stay of 5.8 days and average costs of $41,883. For
MS-DRG 460, we found a total of 52,597 cases with an average length of
stay of 3.3 days and average costs of $28,754. Of these 52,597 cases,
we found 34 cases that reported a principal diagnosis of secondary
scoliosis, with an average length of stay of 3.6 days and average costs
of $34,424. We found 31 cases that reported a principal diagnosis of
secondary kyphosis in MS-DRG 460, with an average length of stay of 4.6
days and average costs of $42,315.
    We also analyzed claims data for MS-DRGs 456, 457, and 458 to
determine the number of cases reporting an ICD-10-CM diagnosis code
describing secondary scoliosis or secondary kyphosis as a secondary
diagnosis. Our findings are shown in the following table.
   MS-DRGs for Cases Involving Non-Cervical Spinal Fusion With Spinal Curvature or Malignancy or Infection or
             Extensive Fusions With Secondary Diagnosis of Secondary Scoliosis or Secondary Kyphosis
----------------------------------------------------------------------------------------------------------------
                                                                     Number of        Average
                             MS-DRG                                    cases      length of stay   Average costs
----------------------------------------------------------------------------------------------------------------
MS-DRG 456--All cases...........................................           1,344              12         $66,012
MS-DRG 456--Cases with a secondary diagnosis of secondary                     37             7.7          58,009
 scoliosis......................................................
MS-DRG 456--Cases with a secondary diagnosis of secondary                     52              12          78,865
 kyphosis.......................................................
MS-DRG 457--All cases...........................................           3,654             6.2          47,577
MS-DRG 457--Cases with a secondary diagnosis of secondary                    187             4.9          37,655
 scoliosis......................................................
MS-DRG 457--Cases with a secondary diagnosis of secondary                    114             5.2          37,357
 kyphosis.......................................................
MS-DRG 458--All cases...........................................           1,245             3.4          34,179
MS-DRG 458--Cases with a secondary diagnosis of secondary                    190             3.0          29,052
 scoliosis......................................................
MS-DRG 458--Cases with a secondary diagnosis of secondary                     39             3.7          31,015
 kyphosis.......................................................
----------------------------------------------------------------------------------------------------------------
    The data indicate that there were 1,344 cases in MS-DRG 456, with
an average length of stay of 12 days and average costs of $66,012. Of
these 1,344 cases, there were 37 cases that reported a secondary
diagnosis of secondary scoliosis, with an average length of stay of 7.7
days and average costs of $58,009. There were also 52 cases in MS-DRG
456 reporting a secondary diagnosis of secondary kyphosis, with an
average length of stay of 12 days and average costs of $78,865. In MS-
DRG 457, there was a total of 3,654 cases, with an average length of
stay of 6.2 days and average costs of $47,577. Of these 3,654 cases,
there were 187 cases that reported secondary scoliosis as a secondary
diagnosis, with an average length of stay of 4.9 days and average costs
of $37,655. In MS-DRG 457, there were also 114 cases that reported a
secondary diagnosis of secondary kyphosis, with an average length of
stay of 5.2 days and average costs of $37,357. Finally, there was a
total of 1,245 cases in MS-DRG 458, with an average length of stay of
3.4 days and average costs of $34,179. Of these 1,245 cases, there were
190 cases that reported a secondary diagnosis of secondary scoliosis,
with an average length of stay of 3 days and average costs of $29,052.
There were 39 cases in MS-DRG 458 that reported a secondary diagnosis
of secondary kyphosis, with an average length of stay of 3.7 days and
average costs of $31,015.
    Our clinical advisors agree that the average length of stay and
average costs for the small number of cases reporting secondary
scoliosis or secondary kyphosis as a principal diagnosis with a non-
cervical spinal fusion currently grouping to MS-DRGs 459 and 460 are
generally more aligned with the average length of stay and average
costs for the cases reporting secondary scoliosis or secondary kyphosis
as a secondary diagnosis with a non-cervical spinal fusion currently
grouping to MS-DRGs 456, 457, and 458. They also note that there may be
instances in which the underlying cause of the diagnosis of secondary
scoliosis or secondary kyphosis is not treated or responsible for the
admission.
    Therefore, for the reasons described above, we are proposing to add
the following ICD-10-CM diagnosis codes describing secondary scoliosis
and
[[Page 19204]]
secondary kyphosis to the list of principal diagnosis codes for MS-DRGs
456, 457, and 458: M40.10; M40.14; M40.15; M41.50; M41.54; M41.55;
M41.56; and M41.57. During our review of MS-DRGs 456, 457, and 458, we
found the following diagnosis codes that describe conditions involving
the cervical region.
------------------------------------------------------------------------
      ICD-10-CM code                      Code description
------------------------------------------------------------------------
M40.03....................  Postural kyphosis, cervicothoracic region.
M40.202...................  Unspecified kyphosis, cervical region.
M40.203...................  Unspecified kyphosis, cervicothoracic
                             region.
M40.292...................  Other kyphosis, cervical region.
M40.293...................  Other kyphosis, cervicothoracic region.
M41.02....................  Infantile idiopathic scoliosis, cervical
                             region.
M41.03....................  Infantile idiopathic scoliosis,
                             cervicothoracic region.
M41.112...................  Juvenile idiopathic scoliosis, cervical
                             region.
M41.113...................  Juvenile idiopathic scoliosis,
                             cervicothoracic region.
M41.122...................  Adolescent idiopathic scoliosis, cervical
                             region.
M41.123...................  Adolescent idiopathic scoliosis,
                             cervicothoracic region.
M41.22....................  Other idiopathic scoliosis, cervical region.
M41.23....................  Other idiopathic scoliosis, cervicothoracic
                             region.
M41.82....................  Other forms of scoliosis, cervical region.
M41.83....................  Other forms of scoliosis, cervicothoracic
                             region.
M42.01....................  Juvenile osteochondrosis of spine, occipito-
                             atlanto-axial region.
M42.02....................  Juvenile osteochondrosis of spine, cervical
                             region.
M42.03....................  Juvenile osteochondrosis of spine,
                             cervicothoracic region.
M43.8X1...................  Other specified deforming dorsopathies,
                             occipito-atlanto-axial region.
M43.8X2...................  Other specified deforming dorsopathies,
                             cervical region.
M43.8X3...................  Other specified deforming dorsopathies,
                             cervicothoracic region.
M46.21....................  Osteomyelitis of vertebra, occipito-atlanto-
                             axial region.
M46.22....................  Osteomyelitis of vertebra, cervical region.
M46.23....................  Osteomyelitis of vertebra, cervicothoracic
                             region.
M48.51XA..................  Collapsed vertebra, not elsewhere
                             classified, occipito-atlanto-axial region,
                             initial encounter for fracture.
M48.52XA..................  Collapsed vertebra, not elsewhere
                             classified, cervical region, initial
                             encounter for fracture.
M48.53XA..................  Collapsed vertebra, not elsewhere
                             classified, cervicothoracic region, initial
                             encounter for fracture.
M40.12....................  Other secondary kyphosis, cervical region.
M40.13....................  Other secondary kyphosis, cervicothoracic
                             region.
M41.41....................  Neuromuscular scoliosis, occipito-atlanto-
                             axial region.
M4.142....................  Neuromuscular scoliosis, cervical region.
M4143.....................  Neuromuscular scoliosis, cervicothoracic
                             region.
M41.52....................  Other secondary scoliosis, cervical region.
M41.53....................  Other secondary scoliosis, cervicothoracic
                             region.
------------------------------------------------------------------------
    Our clinical advisors noted that because the diagnosis codes shown
in the table above describe conditions involving the cervical region,
they are not clinically appropriate for assignment to MS-DRGs 456, 457,
and 458, which are defined by non-cervical spinal fusion procedures
(with spinal curvature or malignancy or infection or extensive
fusions). Therefore, our clinical advisors recommended that these codes
be removed from the MS-DRG logic for these MS-DRGs. As such, we are
proposing to remove the diagnosis codes that describe conditions
involving the cervical region as shown in the table above from MS-DRGs
456, 457, and 458.
7. MDC 11 (Diseases and Disorders of the Kidney and Urinary Tract):
Extracorporeal Shock Wave Lithotripsy (ESWL)
    We received two separate, but related requests to add ICD-10-CM
diagnosis code N13.6 (Pyonephrosis) and ICD-10-CM diagnosis code
T83.192A (Other mechanical complication of indwelling ureteral stent,
initial encounter) to the list of principal diagnosis codes for MS-DRGs
691 and 692 (Urinary Stones with ESW Lithotripsy with CC/MCC and
without CC/MCC, respectively) in MDC 11 so that cases are assigned more
appropriately when an Extracorporeal Shock Wave Lithotripsy (ESWL)
procedure is performed.
    ICD-10-CM diagnosis code N13.6 currently groups to MS-DRGs 689 and
690 (Kidney and Urinary Tract Infections with MCC and without MCC,
respectively) and ICD-10-CM diagnosis code T83.192A currently groups to
MS-DRGs 698, 699, and 700 (Other Kidney and Urinary Tract Diagnoses
with MCC, with CC, and without CC/MCC, respectively).
    The ICD-10-PCS procedure codes for identifying procedures involving
ESWL are designated as non-O.R. procedures and are shown in the
following table.
------------------------------------------------------------------------
      ICD-10-PCS code                     Code description
------------------------------------------------------------------------
0TF3XZZ...................  Fragmentation in right kidney pelvis,
                             external approach.
0TF4XZZ...................  Fragmentation in left kidney pelvis,
                             external approach.
OTF6XZZ...................  Fragmentation in right ureter, external
                             approach.
OTF7XZZ...................  Fragmentation in left ureter, external
                             approach.
OTFBXZZ...................  Fragmentation in bladder, external approach.
OTFCXZZ...................  Fragmentation in bladder neck, external
                             approach.
OTFDXZZ...................  Fragmentation in urethra, external approach.
------------------------------------------------------------------------
[[Page 19205]]
    Pyonephrosis can be described as an infection of the kidney with
pus in the upper collecting system which can progress to obstruction.
Patients with an obstruction in the upper urinary tract due to urinary
stones (calculi), tumors, fungus balls or ureteropelvic obstruction
(UPJ) may also have a higher risk of developing pyonephrosis. If
pyonephrosis is not recognized and treated promptly, it can result in
serious complications, including fistulas, septic shock, irreversible
damage to the kidneys, and death.
    As noted above, the requestor recommended that ICD-10-CM diagnosis
codes N13.6 and T83.192A be added to the list of principal diagnosis
codes for MS-DRGs 691 and 692. There are currently four MS-DRGs that
group cases for diagnoses involving urinary stones, which are
subdivided to identify cases with and without an ESWL procedure: MS-
DRGs 691 and 692 (Urinary Stones with ESW Lithotripsy with and without
CC/MCC, respectively) and MS-DRGs 693 and 694 (Urinary Stones without
ESW Lithotripsy with and without MCC, respectively).
    The requestor stated that when patients who have been diagnosed
with hydronephrosis secondary to renal and ureteral calculus
obstruction undergo an ESWL procedure, ICD-10-CM diagnosis code N13.2
(Hydronephrosis with renal and ureteral calculous obstruction) is
reported and groups to MS-DRGs 691 and 692. However, if a patient with
a diagnosis of hydronephrosis has a urinary tract infection (UTI) in
addition to a renal calculus obstruction and undergoes an ESWL
procedure, ICD-10-CM diagnosis code N13.6 must be coded and reported as
the principal diagnosis, which groups to MS-DRGs 689 and 690. The
requestor stated that ICD-10-CM diagnosis code N13.6 should be grouped
to MS-DRGs 691 and 692 when reported as a principal diagnosis because
this grouping will more appropriately reflect resource consumption for
patients who undergo an ESWL procedure for obstructive urinary calculi,
while also receiving treatment for urinary tract infections.
    With regard to ICD-10-CM diagnosis code T83.192A, the requestor
believed that when an ESWL procedure is performed for the treatment of
calcifications within and around an indwelling ureteral stent, it is
comparable to an ESWL procedure performed for the treatment of urinary
calculi. Therefore, the requestor recommended adding ICD-10-CM
diagnosis code T83.192A to MS-DRGs 691 and 692 when reported as a
principal diagnosis and an ESWL procedure is also reported on the
claim.
    To analyze these separate, but related requests, we first reviewed
the reporting of ICD-10-CM diagnosis code N13.6 within the ICD-10-CM
classification. ICD-10-CM diagnosis code N13.6 is to be assigned for
conditions identified in the code range N13.0-N13.5 with infection.
(Codes in this range describe hydronephrosis with obstruction.)
Infection may be documented by the patient's provider as urinary tract
infection (UTI) or as specific as acute pyelonephritis. We agree with
the requestor that if a patient with a diagnosis of hydronephrosis has
a urinary tract infection (UTI) in addition to a renal calculus
obstruction and undergoes an ESWL procedure, ICD-10-CM diagnosis code
N13.6 must be coded and reported as the principal diagnosis, which
groups to MS-DRGs 689 and 690. In this case scenario, the ESWL
procedure is designated as a non-O.R. procedure and does not impact the
MS-DRG assignment when reported with ICD-10-CM diagnosis code N13.6.
    The ICD-10-CM classification instructs that when both a urinary
obstruction and a genitourinary infection co-exist, the correct code
assignment for reporting is ICD-10-CM diagnosis code N13.6, which is
appropriately grouped to MS-DRGs 689 and 690 (Kidney and Urinary Tract
Infections with MCC and without MCC, respectively) because it describes
a type of urinary tract infection. Therefore, in response to the
requestor's suggestion that ICD-10-CM diagnosis code N13.6 be grouped
to MS-DRGs 691 and 692 when reported as a principal diagnosis to more
appropriately reflect resource consumption for patients who undergo an
ESWL procedure for obstructive urinary calculi while also receiving
treatment for urinary tract infections, we note that the ICD-10-CM
classification provides instruction to identify the conditions reported
with ICD-10-CM diagnosis code N13.6 as an infection, and not as urinary
stones. Our clinical advisors agree with this classification and the
corresponding MS-DRG assignment for diagnosis code N13.6. In addition,
our clinical advisors noted that an ESWL procedure is a non-O.R.
procedure and they do not believe that this procedure is a valid
indicator of resource consumption for cases that involve an infection
and obstruction. Our clinical advisors believe that the resources used
for a case that involves an infection and an obstruction are clinically
distinct from the cases that involve an obstruction only in the course
of treatment. Therefore, our clinical advisors do not agree with the
request to add ICD-10-CM diagnosis code N13.6 to the list of principal
diagnoses for MS-DRGs 691 and 692.
    We also performed various analyses of claims data to evaluate this
request. We analyzed claims data from the September 2018 update of the
FY 2018 MedPAR file for MS-DRGs 689 and 690 to identify cases reporting
ICD-10-CM diagnosis code N13.6 as the principal diagnosis with and
without an ESWL procedure. Our findings are reflected in the table
below.
       Kidney and Urinary Tract Infections With Principal Diagnosis of Pyonephrosis With and Without ESWL
----------------------------------------------------------------------------------------------------------------
                                                                     Number of    Average length
                             MS-DRG                                    cases          of stay      Average costs
----------------------------------------------------------------------------------------------------------------
MS-DRG 689--All cases...........................................          68,020             4.8          $7,873
MS-DRG 689--Cases with principal diagnosis of pyonephrosis......           1,024             6.1          13,809
MS-DRG 689--Cases with principal diagnosis of pyonephrosis with                6            14.2          45,489
 ESWL...........................................................
MS-DRG 690--All cases...........................................         131,999             3.5           5,692
MS-DRG 690--Cases with principal diagnosis of pyonephrosis......           4,625             3.6           5,483
MS-DRG 690--Cases with principal diagnosis of pyonephrosis with               24             4.8          14,837
 ESWL...........................................................
----------------------------------------------------------------------------------------------------------------
    For MS-DRG 689, we found a total of 68,020 cases with an average
length of stay of 4.8 days and average costs of $7,873. Of those 68,020
cases, we found 1,024 cases reporting pyonephrosis (ICD-10-CM diagnosis
code N13.6) as a principal diagnosis with an average length of stay of
6.1 days and average costs of $13,809. Of those 1,024 cases reporting
pyonephrosis (ICD-10-CM diagnosis code N13.6) as a principal diagnosis,
there were 6 cases that also reported an ESWL procedure with an average
length of stay of 14.2 days and average costs of $45,489. For MS-DRG
[[Page 19206]]
690, we found a total of 131,999 cases with an average length of stay
of 3.5 days and average costs of $5,692. Of those 131,999 cases, we
found 4,625 cases reporting pyonephrosis (ICD-10-CM diagnosis code
N13.6) as a principal diagnosis with an average length of stay of 3.6
days and average costs of $5,483. Of those 4,625 cases reporting
pyonephrosis (ICD-10-CM diagnosis code N13.6) as a principal diagnosis,
there were 24 cases that also reported an ESWL procedure with an
average length of stay of 4.8 days and average costs of $14,837.
    The data indicate that the 1,024 cases reporting pyonephrosis (ICD-
10-CM diagnosis code N13.6) as a principal diagnosis in MS-DRG 689 have
a longer average length of stay (6.1 days versus 4.8 days) and higher
average costs ($13,809 versus $7,873) compared to all the cases in MS-
DRG 689. The data also indicate that the 6 cases reporting pyonephrosis
(ICD-10-CM diagnosis code N13.6) as a principal diagnosis that also
reported an ESWL procedure have a longer average length of stay (14.2
days versus 4.8 days) and higher average costs ($45,489 versus $7,873)
in comparison to all the cases in MS-DRG 689. We found similar results
for cases reporting pyonephrosis (ICD-10-CM diagnosis code N13.6) as a
principal diagnosis with an ESWL procedure in MS-DRG 690, where the
average length of stay was slightly longer (4.8 days versus 3.5 days)
and the average costs were higher ($14,837 versus $5,692).
    We then conducted further analysis for the six cases in MS-DRG 689
that reported a principal diagnosis of pyonephrosis with ESWL to
determine what factors may be contributing to the longer lengths of
stay and higher average costs. Specifically, we analyzed the MCC
conditions that were reported across the six cases. Our findings are
shown in the table below.
  Secondary Diagnosis MCC Conditions Reported in MS-DRG 689 With Principal Diagnosis of Pyonephrosis with ESWL
----------------------------------------------------------------------------------------------------------------
                                                                     Number of        Average
         ICD-10-CM code                     Description           times reported  length of stay   Average costs
----------------------------------------------------------------------------------------------------------------
A41.9...........................  Sepsis, unspecified organism..               2            26.5          96,525
G82.50..........................  Quadriplegia, unspecified.....               1               7          13,782
I50.23..........................  Acute on chronic systolic                    1               7          13,304
                                   (congestive) heart failure.
J96. 01.........................  Acute respiratory failure with               1               7          13,304
                                   hypoxia.
K66.1...........................  Hemoperitoneum................               1              10          26,314
L89.153.........................  Pressure ulcer of sacral                     1               8          26,487
                                   region, stage 3.
R57.1...........................  Hypovolemic shock.............               1              10          26,314
                                                                 -----------------------------------------------
    Total.......................  ..............................               8            12.8          39,069
----------------------------------------------------------------------------------------------------------------
    We found seven secondary diagnosis MCC conditions reported among
the six cases in MS-DRG 689 that had a principal diagnosis of
pyonephrosis with ESWL. These MCC conditions appear to have contributed
to the longer lengths of stay and higher average costs for those six
cases. As shown in the table above, the overall average length of stay
for the cases reporting these conditions is 12.8 days with average
costs of $39,069, which is consistent with the average length of stay
of 14.2 days and average costs of $45,489 for the cases in MS-DRG 689
that had a principal diagnosis of pyonephrosis with ESWL.
    We then analyzed the 24 cases in MS-DRG 690 that reported a
principal diagnosis of pyonephrosis with ESWL to determine what factors
may be contributing to the longer lengths of stay and higher average
costs. Specifically, we analyzed the CC conditions that were reported
across the 24 cases. Our findings are shown in the table below.
                       Secondary Diagnosis CC Conditions Reported in MS-DRG 690 With Principal Diagnosis of Pyonephrosis With ESWL
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                             Number of        Average
                ICD-10-CM code                                        Description                         times reported  length of stay   Average costs
--------------------------------------------------------------------------------------------------------------------------------------------------------
B37.0........................................  Candidal stomatitis......................................               2             9.5         $18,895
B37.49.......................................  Other urogenital candidiasis.............................               2             7.5          30,458
C79.89.......................................  Secondary malignant neoplasm of other specified sites....               1               3           5,882
E22.2........................................  Syndrome of inappropriate secretion of antidiuretic                     1               2           5,979
                                                hormone.
E44.0........................................  Moderate protein-calorie malnutrition....................               1               6           9,027
E46..........................................  Unspecified protein-calorie malnutrition.................               2             5.5           8,704
E87.0........................................  Hyperosmolality and hypernatremia........................               1               6           9,027
E87.1........................................  Hypo-osmolality and hyponatremia.........................               1               5          12,339
F11.20.......................................  Opioid dependence, uncomplicated.........................               1               1           8,209
F33.1........................................  Major depressive disorder, recurrent, moderate...........               1              12          55,034
G81.94.......................................  Hemiplegia, unspecified affecting left nondominant side..               3             9.3          25,390
G82.20.......................................  Paraplegia, unspecified..................................               1              10          15,142
G93.40.......................................  Encephalopathy, unspecified..............................               2               7          10,277
I13.0........................................  Hypertensive heart and chronic kidney disease with heart                1               4          12,348
                                                failure and stage 1 through stage 4 chronic kidney
                                                disease, or unspecified chronic kidney dis.
I48.1........................................  Persistent atrial fibrillation...........................               1              12          55,034
I50.22.......................................  Chronic systolic (congestive) heart failure..............               1              12          55,034
I50.32.......................................  Chronic diastolic (congestive) heart failure.............               2             3.5           9,115
I69.351......................................  Hemiplegia and hemiparesis following cerebral infarction                1               3           4,845
                                                affecting right dominant side.
[[Page 19207]]

I69.859......................................  Hemiplegia and hemiparesis following other                              1               4          18,160
                                                cerebrovascular disease affecting unspecified side.
I97.791......................................  Other intraoperative cardiac functional disturbances                    1               8           8,114
                                                during other surgery.
J44.0........................................  Chronic obstructive pulmonary disease with acute lower                  1              11          25,641
                                                respiratory infection.
J44.1........................................  Chronic obstructive pulmonary disease with (acute)                      2               5          11,283
                                                exacerbation.
J96.10.......................................  Chronic respiratory failure, unspecified whether with                   1              12          55,034
                                                hypoxia or hypercapnia.
J96.11.......................................  Chronic respiratory failure with hypoxia.................               2               7          15,243
K57.92.......................................  Diverticulitis of intestine, part unspecified, without                  1               8          12,150
                                                perforation or abscess without bleeding.
N12..........................................  Tubulo-interstitial nephritis, not specified as acute or                1              11          25,641
                                                chronic.
N13.8........................................  Other obstructive and reflux uropathy....................               1               5          32,854
N17.9........................................  Acute kidney failure, unspecified........................               1               2          21,329
N20.1........................................  Calculus of ureter.......................................               1              10          15,142
N20.2........................................  Calculus of kidney with calculus of ureter...............               1               6           9,027
R44.3........................................  Hallucinations, unspecified..............................               1               2          21,329
R47.01.......................................  Aphasia..................................................               1               4          10,161
R78.81.......................................  Bacteremia...............................................               1              11           4,849
S37.012A.....................................  Minor contusion of left kidney, initial encounter........               1               2          21,329
T83.511A.....................................  Infection and inflammatory reaction due to indwelling                   1              10          15,142
                                                urethral catheter, initial encounter.
Z68.1........................................  Body mass index (BMI) 19.9 or less, adult................               2             4.5          10,040
Z68.43.......................................  Body mass index (BMI) 50-59.9, adult.....................               1               3           6,145
                                                                                                         -----------------------------------------------
    Total....................................  .........................................................              47             6.6          18,173
--------------------------------------------------------------------------------------------------------------------------------------------------------
    We found 37 secondary diagnosis CC conditions reported among the 24
cases in MS-DRG 690 that had a principal diagnosis of pyonephrosis with
ESWL. These CC conditions appear to have contributed to the longer
length of stay and higher average costs for those 24 cases. As shown in
the table above, the overall average length of stay for the cases
reporting these conditions is 6.6 days with average costs of $18,173,
which is higher, although comparable, to the average length of stay of
4.8 days and average costs of $14,837 for the cases in MS-DRG 690 that
had a principal diagnosis of pyonephrosis with ESWL. We note that it
appears that 1 of the 24 cases had at least 4 secondary diagnosis CC
conditions (F33.1, I48.1, I50.22, and J96.10) with an average length of
stay of 12 days and average costs of $55,034, which we believe
contributed greatly overall to the longer length of stay and higher
average costs for those secondary diagnosis CC conditions reported
among the 24 cases.
    Our clinical advisors agree that the resource consumption for the 6
cases in MS-DRG 689 and the 24 cases in MS-DRG 690 that reported a
principal diagnosis of pyonephrosis with ESWL cannot be directly
attributed to ESWL and believe that it is the secondary diagnosis MCC
and CC conditions that are the major contributing factors to the longer
average length of stay and higher average costs for these cases.
    We also analyzed claims data for MS-DRGs 691 and 692 (Urinary
Stones with ESW Lithotripsy with CC/MCC and without CC/MCC,
respectively) and MS-DRGs 693 and 694 (Urinary Stones without ESW
Lithotripsy with MCC and without MCC, respectively) to identify claims
reporting pyonephrosis (ICD-10-CM diagnosis code N13.6) as a secondary
diagnosis. Our findings are shown in the following table.
            MS-DRGs for Urinary Stones With Secondary Diagnosis of Pyonephrosis With and Without ESWL
----------------------------------------------------------------------------------------------------------------
                                                                     Number of        Average
                             MS-DRG                               times reported  length of stay   Average costs
----------------------------------------------------------------------------------------------------------------
MS-DRG 691--All cases...........................................             140             3.9         $11,997
MS-DRG 691--Cases with secondary diagnosis of pyonephrosis and                 3               8          24,280
 ESWL...........................................................
MS-DRG 692--All cases...........................................             124             2.1           8,326
MS-DRG 693--All cases...........................................           1,315             5.1           9,668
MS-DRG 693--Cases with secondary diagnosis of pyonephrosis......              16             5.5           9,962
MS-DRG 694--All cases...........................................           7,240             2.7           5,263
MS-DRG 694--Cases with secondary diagnosis of pyonephrosis......              89             3.5           6,678
----------------------------------------------------------------------------------------------------------------
    As shown in the table above, in MS-DRG 691, there was a total of
140 cases with an average length of stay of 3.9 days and average costs
of $11,997. Of those 140 cases, there were 3 cases that reported
pyonephrosis as a secondary diagnosis and an ESWL procedure with an
average length of stay of 8.0 days and average costs of $24,280. There
was a total of 124 cases found in MS-DRG 692 with an average length of
stay of 2.1 days and average costs of $8,326. There were no cases in
MS-DRG 692 that reported pyonephrosis as a secondary diagnosis with an
ESWL procedure. For MS-DRG 693, there was a total of 1,315 cases with
an average length of stay of 5.1 days and average costs of $9,668. Of
[[Page 19208]]
those 1,315 cases, there were 16 cases reporting pyonephrosis as a
secondary diagnosis with an average length of stay of 5.5 days and
average costs of $9,962. For MS-DRG 694, there was a total of 7,240
cases with an average length of stay of 2.7 days and average costs of
$5,263. Of those 7,240 cases, there were 89 cases reporting
pyonephrosis as a secondary diagnosis with an average length of stay of
3.5 days and average costs of $6,678.
    Similar to the process described above, we then conducted further
analysis for the three cases in MS-DRG 691 that reported a secondary
diagnosis of pyonephrosis with ESWL to determine what factors may be
contributing to the longer lengths of stay and higher average costs.
Specifically, we analyzed what other MCC and CC conditions were
reported across the three cases. We found no other MCC conditions
reported for those three cases. Our findings for the CC conditions
reported for those three cases are shown in the table below.
                            Secondary Diagnosis CC Conditions Reported in MS-DRG 691
----------------------------------------------------------------------------------------------------------------
                                                                     Number of    Average length
         ICD-10-CM code                     Description           times reported      of stay      Average costs
----------------------------------------------------------------------------------------------------------------
E44.0...........................  Moderate protein-calorie                     1              15         $52,384
                                   malnutrition.
J96.10..........................  Chronic respiratory failure,                 1               7          15,110
                                   unspecified whether with
                                   hypoxia or hypercapnia.
N13.6...........................  Pyonephrosis..................               2             8.5          28,865
N17.9...........................  Acute kidney failure,                        1               2           5,346
                                   unspecified.
N39.0...........................  Urinary tract infection, site                1               2           5,346
                                   not specified.
Q79.6...........................  Ehlers-Danlos syndrome........               1               2           5,346
                                                                 -----------------------------------------------
    Total.......................  ..............................               7             6.4          20,181
----------------------------------------------------------------------------------------------------------------
    We found six secondary diagnosis CC conditions reported among the
three cases in MS-DRG 691 that had a secondary diagnosis of
pyonephrosis with ESWL. These CC conditions appear to have contributed
to the longer lengths of stay and higher average costs for those three
cases. As shown in the table above, the overall average length of stay
for the cases reporting these conditions is 6.4 days with average costs
of $20,181, which is more consistent with the average length of stay of
8.0 days and average costs of $24,280 for the cases in MS-DRG 691 that
had a secondary diagnosis of pyonephrosis with ESWL.
    Our clinical advisors believe that the resource consumption for
those three cases cannot be directly attributed to ESWL and that it is
the secondary diagnosis CC conditions reported in addition to
pyonephrosis, which is also designated as a CC condition, that are the
major contributing factors for the longer average lengths of stay and
higher average costs for these cases in MS-DRG 691.
    We did not conduct further analysis for the 16 cases in MS-DRG 693
or the 89 cases in MS-DRG 694 that reported a secondary diagnosis of
pyonephrosis because MS-DRGs 693 and 694 do not include ESWL procedures
and the average length of stay and average costs for those cases were
consistent with the data findings for all of the cases in their
assigned MS-DRG.
    As discussed earlier in this section, the requestor suggested that
ICD-10-CM diagnosis code N13.6 should be grouped to MS-DRGs 691 and 692
when reported as a principal diagnosis because this grouping will more
appropriately reflect resource consumption for patients who undergo an
ESWL procedure for obstructive urinary calculi, while also receiving
treatment for urinary tract infections. However, based on the results
of the data analysis and input from our clinical advisors, we believe
that cases for which ICD-10-CM diagnosis code N13.6 was reported as a
principal diagnosis or as a secondary diagnosis with an ESWL procedure
should not be utilized as an indicator for increased utilization of
resources based on the performance of an ESWL procedure. Rather, we
believe that the resource consumption is more likely the result of
secondary diagnosis CC and/or MCC diagnosis codes.
    With respect to the requestor's concern that cases reporting ICD-
10-CM diagnosis code T83.192A (Other mechanical complication of
indwelling ureteral stent, initial encounter) and an ESWL procedure are
not appropriately assigned and should be added to the list of principal
diagnoses for MS-DRGs 691 and 692 (Urinary Stones with ESW Lithotripsy
with CC/MCC and without CC/MCC, respectively), our clinical advisors
note that ICD-10-CM diagnosis code T83.192A is not necessarily
indicative of a patient having urinary stones. As such, they do not
support adding ICD-10-CM diagnosis code T83.192A to the list of
principal diagnosis codes for MS-DRGs 691 and 692.
    We analyzed claims data to identify cases reporting ICD-10-CM
diagnosis code T83.192A as a principal diagnosis with ESWL in MS-DRGs
698, 699, and 700 (Other Kidney and Urinary Tract Diagnoses with MCC,
with CC, and without CC/MCC, respectively). Our findings are shown in
the following table.
 MS-DRGs for Other Kidney and Urinary Tract Diagnoses With Principal Diagnosis of Other Mechanical Complications
                                     of Indwelling Ureteral Stent With ESWL
----------------------------------------------------------------------------------------------------------------
                                                                     Number of        Average
                             MS-DRG                                    cases      length of stay   Average costs
----------------------------------------------------------------------------------------------------------------
MS-DRG 698--All cases...........................................          56,803             6.1         $11,220
MS-DRG 698--Cases with diagnosis code T83.192A reported as                    35             7.1          14,574
 principal diagnosis............................................
MS-DRG 699--All cases...........................................          33,693             4.2           7,348
MS-DRG 699--Cases with diagnosis code T83.192A reported as                    63             4.1           7,652
 principal diagnosis............................................
MS-DRG 699--Cases with diagnosis code T83.192A reported as                     1               3           7,986
 principal diagnosis with ESWL..................................
[[Page 19209]]

MS-DRG 700--All cases...........................................           3,719               3           5,356
----------------------------------------------------------------------------------------------------------------
    For MS-DRG 698, there was a total of 56,803 cases reported, with an
average length of stay of 6.1 days and average costs of $11,220. Of
these 56,803 cases, 35 cases reported ICD-10-CM diagnosis code T83.192A
as the principal diagnosis, with an average length of stay of 7.1 days
and average costs of $14,574. There were no cases that reported an ESWL
procedure with ICD-10-CM diagnosis code T83.192A as the principal
diagnosis in MS-DRG 698. For MS-DRG 699, there was a total of 33,693
cases reported, with an average length of stay of 4.2 days and average
costs of $7,348. Of the 33,693 cases in MS-DRG 699, there were 63 cases
that reported ICD-10-CM diagnosis code T83.192A as the principal
diagnosis, with an average length of stay of 4.1 days and average costs
of $7,652. There was only 1 case in MS-DRG 699 that reported ICD-10-CM
diagnosis code T83.192A as the principal diagnosis with an ESWL
procedure, with an average length of stay of 3 days and average costs
of $7,986. For MS-DRG 700, there was a total of 3,719 cases reported,
with an average length of stay of 3 days and average costs of $5,356.
There were no cases that reported ICD-10-CM diagnosis code T83.192A as
the principal diagnosis in MS-DRG 700. Of the 98 cases in MS-DRGs 698
and 699 that reported a principal diagnosis of other mechanical
complication of indwelling ureteral stent (diagnosis code T83.192A),
only 1 case also reported an ESWL procedure. Based on the results of
our data analysis and input from our clinical advisors, we are not
proposing to add ICD-10-CM diagnosis code T83.192A to the list of
principal diagnosis codes for MS-DRGs 691 and 692.
    In connection with these requests, our clinical advisors
recommended that we evaluate the frequency with which ESWL is reported
in the inpatient setting across all the MS-DRGs. Therefore, we also
analyzed claims data from the September 2018 update of the FY 2018
MedPAR file to identify the other MS-DRGs to which claims reporting an
ESWL procedure were reported. Our findings are shown in the following
table.
------------------------------------------------------------------------
          MS-DRGs                        MS-DRG description
------------------------------------------------------------------------
654.......................  Major Bladder Procedures with CC.
657.......................  Kidney and Ureter Procedures for Neoplasm
                             with CC.
659, 660, 661.............  Kidney and Ureter Procedures for Non-
                             Neoplasm with MCC, with CC, without CC/MCC,
                             respectively.
662, 663..................  Minor Bladder Procedures with MCC and with
                             CC, respectively.
665, 666..................  Prostatectomy with MCC and with CC,
                             respectively.
668, 669, 670.............  Transurethral Procedures with MCC, with CC,
                             and without CC/MCC, respectively.
671.......................  Urethral Procedures with CC/MCC.
682, 683..................  Renal Failure with MCC and with CC,
                             respectively.
689, 690..................  Kidney and Urinary Tract Infections with MCC
                             and without MCC, respectively.
691, 692..................  Urinary Stones with ESW Lithotripsy with CC/
                             MCC and without CC/MCC, respectively.
696.......................  Kidney and Urinary Tract Signs and Symptoms
                             without MCC.
698, 699, 700.............  Other Kidney and Urinary Tract Diagnoses
                             with MCC, with CC, and without CC/MCC,
                             respectively.
982.......................  Extensive O.R. Procedure Unrelated to
                             Principal Diagnosis with CC.
------------------------------------------------------------------------
    Our findings with respect to the cases reporting an ESWL procedure
in each of these MS-DRGs, as compared to all cases in the applicable
MS-DRG, are shown in the table below.
----------------------------------------------------------------------------------------------------------------
                                                                     Number of        Average
                             MS-DRG                               times reported  length of stay   Average costs
----------------------------------------------------------------------------------------------------------------
MS-DRG 654--All cases...........................................           3,838             6.7         $19,805
MS-DRG 654--Cases reporting ESWL................................               1               5           9,102
MS-DRG 657--All cases...........................................           7,242             4.1          14,047
MS-DRG 657--Cases reporting ESWL................................               2               2          19,021
MS-DRG 659--All cases...........................................           7,761             8.1          18,717
MS-DRG 659--Cases reporting ESWL................................              71            11.1          26,366
MS-DRG 660--All cases...........................................          17,617             4.1          10,292
MS-DRG 660--Cases reporting ESWL................................             193               4          13,627
MS-DRG 661--All cases...........................................          12,434             2.3           7,997
MS-DRG 661--Cases reporting ESWL................................             154             2.7          12,639
MS-DRG 662--All cases...........................................             614            10.2          23,110
MS-DRG 662--Cases reporting ESWL................................               1              22          57,520
MS-DRG 663--All cases...........................................           1,349               5          11,213
MS-DRG 663--Cases reporting ESWL................................               2             3.5          15,870
MS-DRG 665--All cases...........................................             589             9.4          21,328
MS-DRG 665--Cases reporting ESWL................................               2            16.5          17,710
MS-DRG 666--All cases...........................................           1,517             5.6          13,060
MS-DRG 666--Cases reporting ESWL................................               2             9.5          16,521
MS-DRG 668--All cases...........................................           2,065               9          20,229
[[Page 19210]]

MS-DRG 668--Cases reporting ESWL................................               1               4          19,383
MS-DRG 669--All cases...........................................           5,259             4.9          11,217
MS-DRG 669--Cases reporting ESWL................................               5             2.4          13,006
MS-DRG 670--All cases...........................................           1,707             2.6           7,177
MS-DRG 670--Cases reporting ESWL................................               5               3          18,416
MS-DRG 671--All cases...........................................             367             6.4          13,519
MS-DRG 671--Cases reporting ESWL................................               1               3          29,731
MS-DRG 682--All cases...........................................          97,347             5.7          10,384
MS-DRG 682--Cases reporting ESWL................................               5              10          26,773
MS-DRG 683--All cases...........................................         132,206             3.9           6,450
MS-DRG 683--Cases reporting ESWL................................               4            13.3          19,706
MS-DRG 689--All cases...........................................          68,020             4.8           7,873
MS-DRG 689--Cases reporting ESWL................................              11            13.3          35,510
MS-DRG 690--All cases...........................................         131,999             3.5           5,692
MS-DRG 690--Cases reporting ESWL................................              39             4.9          13,567
MS-DRG 691--All cases...........................................             140             3.9          11,997
MS-DRG 691--Cases reporting ESWL................................             140             3.9          11,997
MS-DRG 692--All cases...........................................             124             2.1           8,326
MS-DRG 692--Cases reporting ESWL................................             124             2.1           8,326
MS-DRG 696--All cases...........................................           5,933             2.9           4,938
MS-DRG 696--Cases reporting ESWL................................               2             2.5           6,238
MS-DRG 698--All cases...........................................          56,803             6.1          11,220
MS-DRG 698--Cases reporting ESWL................................              18             9.2          27,818
MS-DRG 699--All cases...........................................          33,693             4.2           7,348
MS-DRG 699--Cases reporting ESWL................................               9             4.4          10,986
MS-DRG 700--All cases...........................................           3,719               3           5,356
MS-DRG 700--Cases reporting ESWL................................               1               1           7,580
MS-DRG 982--All cases...........................................          16,834             6.3          16,939
MS-DRG 982--Cases reporting ESWL................................               2              11          74,751
----------------------------------------------------------------------------------------------------------------
    Our data analysis indicates that, generally, the subset of cases
reporting an ESWL procedure appear to have a longer average length of
stay and higher average costs when compared to all the cases in their
assigned MS-DRG. However, we note that this same subset of cases also
reported at least one O.R. procedure and/or diagnosis designated as a
CC or an MCC, which our clinical advisors believe are contributing
factors to the longer average lengths of stay and higher average costs,
with the exception of the case assigned to MS-DRG 700, which is a
medical MS-DRG and has no CC or MCC conditions in the logic. Therefore,
our clinical advisors do not believe that cases reporting an ESWL
procedure should be considered as an indication of increased resource
consumption for inpatient hospitalizations.
    Our clinical advisors also suggested that we evaluate the reporting
of ESWL procedures in the inpatient setting over the past few years. We
analyzed claims data for MS-DRGs 691 and 692 from the FY 2012 through
the FY 2016 MedPAR files, which were used in our analysis of claims
data for MS-DRG reclassification requests effective for FY 2014 through
FY 2018. We note that the analysis findings shown in the following
table reflect ICD-9-CM, ICD-10-CM and ICD-10-PCS coded claims data.
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                FY 2014 (version 31)          FY 2015 (version 32)          FY 2016 (version 33)          FY 2017 (version 34)          FY 2018 (version 35)
                                           -----------------------------------------------------------------------------------------------------------------------------------------------------
                  MS-DRG                               Average                       Average                       Average                       Average                       Average
                                             Number    length    Average   Number    length    Average   Number    length    Average   Number    length    Average   Number    length    Average
                                            of cases   of stay    costs   of cases   of stay    costs   of cases   of stay    costs   of cases   of stay    costs   of cases   of stay    costs
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
MS-DRG 691--Urinary Stones with ESW              898      3.77   $10,274       832      3.81   $11,141       812      3.72   $11,534       750      4.06   $11,907       448       3.4   $11,502
 Lithotripsy w CC/MCC.....................
MS-DRG 692--Urinary Stones with ESW              231      2.02     7,292       197      2.14     8,041       133      2.32     9,273       103      2.39     9,398        61       2.3     8,702
 Lithotripsy without CC/MCC...............
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
    The data show a steady decline in the number of cases reporting
urinary stones with an ESWL procedure for the past 5 years. As
previously noted, the total number of cases reporting urinary stones
with an ESWL procedure for MS-DRGs 691 and 692 based on our analysis of
the September 2018 update of the FY 2018 MedPAR file was 264, which
again is a decline from the prior year's figures. As discussed
throughout this section, an ESWL procedure is a non-O.R. procedure
which currently groups to medical MS-DRGs 691 and 692. Therefore,
because an ESWL procedure is a non-O.R. procedure and due to decreased
usage of this procedure in the inpatient setting for the treatment of
urinary stones, our clinical advisors believe that there is no longer a
clinical reason to subdivide the MS-DRGs for urinary stones (MS-DRGs
691, 692, 693, and 694) based on ESWL procedures.
    Therefore, we are proposing to delete MS-DRGs 691 and 692 and to
revise the titles for MS-DRGs 693 and 694 from ``Urinary Stones without
ESW Lithotripsy with MCC'' and ``Urinary Stones without ESW Lithotripsy
without MCC'', respectively to ``Urinary Stones with MCC'' and
``Urinary Stones without MCC'', respectively.
8. MDC 12 (Diseases and Disorders of the Male Reproductive System):
Diagnostic Imaging of Male Anatomy
    We received a request to review four ICD-10-CM diagnosis codes
describing
[[Page 19211]]
body parts associated with male anatomy that are currently assigned to
MDC 5 (Diseases and Disorders of the Circulatory System) in MS-DRGs 302
and 303 (Atherosclerosis with MCC and Atherosclerosis without MCC,
respectively). The four codes are listed in the following table.
------------------------------------------------------------------------
      ICD-10-CM code                      Code description
------------------------------------------------------------------------
R93.811...................  Abnormal radiologic findings on diagnostic
                             imaging of right testicle.
R93.812...................  Abnormal radiologic findings on diagnostic
                             imaging of left testicle.
R93.813...................  Abnormal radiologic findings on diagnostic
                             imaging of testicles, bilateral.
R93.819...................  Abnormal radiologic findings on diagnostic
                             imaging of unspecified testicle.
------------------------------------------------------------------------
    The requestor recommended that the four diagnosis codes shown in
the table above be considered for assignment to MDC 12 (Diseases and
Disorders of the Male Reproductive System), consistent with other
diagnosis codes that include the male anatomy. However, the requestor
did not suggest a specific MS-DRG assignment within MDC 12.
    We examined claims data from the September 2018 update of the FY
2018 MedPAR file for MS-DRGs 302 and 303 to identify any cases
reporting a diagnosis code for abnormal radiologic findings on
diagnostic imaging of the testicles. We did not find any such cases.
    Our clinical advisors reviewed this request and determined that the
assignment of diagnosis codes R93.811, R93.812, R93.813, and R93.819 to
MDC 5 in MS-DRGs 302 and 303 was a result of replication from ICD-9-CM
diagnosis code 793.2 (Nonspecific (abnormal) findings on radiological
and other examination of other intrathoracic organs) which was assigned
to those MS-DRGs. Therefore, our clinical advisors support reassignment
of these codes to MDC 12. Our clinical advisors agree that this
reassignment is clinically appropriate because these diagnosis codes
are specific to the male anatomy, consistent with other diagnosis codes
in MDC 12 that include the male anatomy. Specifically, our clinical
advisors suggest reassignment of the four diagnosis codes to MS-DRGs
729 and 730 (Other Male Reproductive System Diagnoses with CC/MCC and
without CC/MCC, respectively). Therefore, we are proposing to reassign
ICD-10-CM diagnosis codes R93.811, R93.812, R93.813, and R93.819 from
MDC 5 in MS-DRGs 302 and 303 to MDC 12 in MS-DRGs 729 and 730.
9. MDC 14 (Pregnancy, Childbirth and the Puerperium): Proposed
Reassignment of Diagnosis Code O99.89
    We received a request to review the MS-DRG assignment for cases
reporting ICD-10-CM diagnosis code O99.89 (Other specified diseases and
conditions complicating pregnancy, childbirth and the puerperium). The
requestor stated that it is experiencing MS-DRG shifts to MS-DRG 769
(Postpartum and Post Abortion Diagnoses with O.R. Procedure) as a
result of the new obstetric MS-DRG logic when ICD-10-CM diagnosis code
O99.89 is reported as a principal diagnosis in the absence of a
delivery code on the claim (to indicate the patient delivered during
that hospitalization), or when there is no other secondary diagnosis
code on the claim indicating that the patient is in the postpartum
period. According to the requestor, claims reporting ICD-10-CM
diagnosis code O99.89 as a principal diagnosis for conditions described
as occurring during the antepartum period that are reported with an
O.R. procedure are grouping to MS-DRG 769. In the example provided by
the requestor, ICD-10-CM diagnosis code O99.89 was reported as the
principal diagnosis, with ICD-10-CM diagnosis codes N13.2
(Hydronephrosis with renal and ureteral calculous obstruction) and
Z3A.25 (25 weeks of gestation of pregnancy) reported as secondary
diagnoses with ICD-10-PCS procedure code 0T68DZ (Dilation of right
ureter with intraluminal device, endoscopic approach), resulting in
assignment to MS-DRG 769. The requestor noted that, in the FY 2019
IPPS/LTCH PPS final rule (83 FR 41212), we stated ``If there was not a
principal diagnosis of abortion reported on the claim, the logic asks
if there was a principal diagnosis of an antepartum condition reported
on the claim. If yes, the logic then asks if there was an O.R.
procedure reported on the claim. If yes, the logic assigns the case to
one of the proposed new MS-DRGs 817, 818, or 819.'' In the requestor's
example, there were not any codes reported to indicate that the patient
was in the postpartum period, nor was there a delivery code reported on
the claim. Therefore, the requestor suggested that a more appropriate
assignment for ICD-10-CM diagnosis code O99.89 may be MS-DRGs 817, 818,
and 819 (Other Antepartum Diagnoses with O.R. Procedure with MCC, with
CC and without CC/MCC, respectively).
    In the FY 2019 IPPS/LTCH PPS final rule (83 FR 41202 through
41216), we finalized our proposal to restructure the MS-DRGs within MDC
14 (Pregnancy, Childbirth and the Puerperium) which established new
concepts for the GROUPER logic. As a result of the modifications made,
ICD-10-CM diagnosis code O99.89 was classified as a postpartum
condition and is currently assigned to MS-DRG 769 (Postpartum and Post
Abortion Diagnoses with O.R. Procedure) and MS-DRG 776 (Postpartum and
Post Abortion Diagnoses without O.R. Procedure) under the Version 36
ICD-10 MS-DRGs. As also discussed and displayed in Diagram 2 in the FY
2019 IPPS/LTCH PPS final rule (83 FR 41212 through 41213), the logic
asks if there was a principal diagnosis of a postpartum condition
reported on the claim. If yes, the logic then asks if there was an O.R.
procedure reported on the claim. If yes, the logic assigns the case to
MS-DRG 769. If no, the logic assigns the case to MS-DRG 776. Therefore,
the MS-DRG assignment for the example provided by the requestor is
grouping accurately according to the current GROUPER logic.
    We analyzed claims data from the September 2018 update of the FY
2018 MedPAR file for cases reporting diagnosis code O99.89 in MS-DRGs
769 and 776 as a principal diagnosis or as a secondary diagnosis. Our
findings are shown in the following table.
[[Page 19212]]
Postpartum MS-DRGs With Principal or Secondary Diagnosis of Other Specified Diseases and Conditions Complicating
                                    Pregnancy, Childbirth and the Puerperium
----------------------------------------------------------------------------------------------------------------
                                                                     Number of    Average length
                             MS-DRG                                    cases          of stay      Average costs
----------------------------------------------------------------------------------------------------------------
MS-DRG 769--All cases...........................................              91             4.3         $11,015
MS-DRG 769--Cases reporting diagnosis code O99.89 as principal                 7             5.6          19,059
 diagnosis......................................................
MS-DRG 769--Cases reporting diagnosis code O99.89 as secondary                61            12.1          41,717
 diagnosis......................................................
MS-DRG 776--All cases...........................................             560             3.1           5,332
MS-DRG 776--Cases reporting diagnosis code O99.89 as principal                57             3.5           6,439
 diagnosis......................................................
----------------------------------------------------------------------------------------------------------------
    As shown in the table above, we found a total of 91 cases in MS-DRG
769 with an average length of stay of 4.3 days and average costs of
$11,015. Of these 91 cases, 7 cases reported ICD-10-CM diagnosis code
O99.89 as a principal diagnosis with an average length of stay of 5.6
days and average costs of $19,059, and 61 cases reported ICD-10-CM
diagnosis code O99.89 as a secondary diagnosis with an average length
of stay of 12.1 days and average costs of $41,717. For MS-DRG 776, we
found a total of 560 cases with an average length of stay of 3.1 days
and average costs of $5,332. Of these 560 cases, 57 cases reported ICD-
10-CM diagnosis code O99.89 as a principal diagnosis with an average
length of stay of 3.5 days and average costs of $6,439. There were no
cases reporting ICD-10-CM diagnosis code O99.89 as a secondary
diagnosis in MS-DRG 776.
    For MS-DRG 769, the data show that the 68 cases reporting ICD-10-CM
diagnosis code O99.89 as a principal or secondary diagnosis have a
longer average length of stay and higher average costs compared to all
the cases in MS-DRG 769. For MS-DRG 776, the data show that the 57
cases reporting a principal diagnosis of ICD-10-CM diagnosis code
O99.89 have a similar average length of stay compared to all the cases
in MS-DRG 776 (3.5 days versus 3.1 days) and average costs that are
consistent with the average costs of all cases in MS-DRG 776 ($6,439
versus $5,332).
    We note that the description for ICD-10-CM diagnosis code O99.89
``Other specified diseases and conditions complicating pregnancy,
childbirth and the puerperium'', describes conditions that may occur
during the antepartum period (pregnancy), during childbirth, or during
the postpartum period (puerperium). In addition, in the ICD-10-CM
Tabular List of Diseases, there is an inclusion term at subcategory
O99.8- instructing users that the reporting of any diagnosis codes in
that subcategory is intended for conditions that are reported in
certain ranges of the classification. Specifically, the inclusion term
states ``Conditions in D00-D48, H00-H95, M00-N99, and Q00-Q99.'' There
is also an instructional note to ``Use additional code to identify
condition.'' As a result, ICD-10-CM diagnosis code O99.89 may be
reported to identify conditions that occur during the antepartum period
(pregnancy), during childbirth, or during the postpartum period
(puerperium). However, it is not restricted to the reporting of
obstetric specific conditions only. In the example provided by the
requestor, ICD-10-CM diagnosis code O99.89 was reported as the
principal diagnosis with ICD-10-CM diagnosis code N13.2 (Hydronephrosis
with renal and ureteral calculous obstruction) as a secondary
diagnosis. ICD-10-CM diagnosis code N13.2 is within the code range
referenced earlier in this section (M00-N99) and qualifies as an
appropriate condition for reporting according to the instruction.
    As noted earlier, ICD-10-CM diagnosis code O99.89 is intended to
report conditions that occur during the antepartum period (pregnancy),
during childbirth, or during the postpartum period (puerperium) and is
not restricted to the reporting of obstetric specific conditions only.
However, because the diagnosis code description includes three distinct
obstetric related stages, it is not clear what stage the patient is in
by this single code. For example, upon review of subcategory O99.8-, we
recognized that the other ICD-10-CM diagnosis code sub-subcategories
are expanded to include unique codes that identify the condition as
occurring or complicating pregnancy, childbirth or the puerperium.
Specifically, sub-subcategory O99.81- (Abnormal glucose complicating
pregnancy, childbirth, and the puerperium) is expanded to include the
following ICD-10-CM diagnosis codes.
------------------------------------------------------------------------
      ICD-10-CM code                      Code description
------------------------------------------------------------------------
O99.810...................  Abnormal glucose complicating pregnancy.
O99.814...................  Abnormal glucose complicating childbirth.
O99.815...................  Abnormal glucose complicating the
                             puerperium.
------------------------------------------------------------------------
    The codes listed above specifically identify at what stage the
abnormal glucose was a complicating condition. Because each code
uniquely identifies a stage, the code can be easily classified under
MDC 14 as an antepartum condition (ICD-10-CM diagnosis code O99.810),
occurring during a delivery episode (ICD-10-CM diagnosis code O99.814),
or as a postpartum condition (ICD-10-CM diagnosis code O99.815). The
same is not true for ICD-10-CM diagnosis code O99.89 because it
includes all three stages in the single code.
    Therefore, we examined the number and type of secondary diagnoses
reported with ICD-10-CM diagnosis code O99.89 as a principal diagnosis
for MS-DRGs 769 and 776 to identify how many secondary diagnoses were
related to other obstetric conditions and how many were related to non-
obstetric conditions.
[[Page 19213]]
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                             Number of
                                                             secondary       Number of       Number of       Number of       Number of       Number of
                                                             diagnoses     secondary  OB   secondary  OB   secondary  OB   secondary  OB  secondary non-
                         MS-DRG                            reported with      related         related         related         related       OB  related
                                                            O99.89  as       diagnoses      antepartum      postpartum       delivery        diagnoses
                                                             principal                       diagnoses       diagnoses       diagnoses
--------------------------------------------------------------------------------------------------------------------------------------------------------
MS-DRG 769..............................................              59              13              11               1               1              46
MS-DRG 776..............................................             376             113              88              19               6             263
--------------------------------------------------------------------------------------------------------------------------------------------------------
    As shown in the table above, there was a total of 59 secondary
diagnoses reported with diagnosis code O99.89 as the principal
diagnosis for MS-DRG 769. Of those 59 secondary diagnoses, 13 were
obstetric (OB) related diagnosis codes (11 antepartum, 1 postpartum and
1 delivery) and 46 were non-obstetric (Non-OB) related diagnosis codes.
For MS-DRG 776, there was a total of 376 secondary diagnoses reported
with diagnosis code O99.89 as the principal diagnosis. Of those 376
secondary diagnoses, 113 were obstetric (OB) related diagnosis codes
(88 antepartum, 19 postpartum and 6 delivery) and 263 were non-
obstetric (Non-OB) related diagnosis codes.
    The data reflect that, for MS-DRGs 769 and 776, the number of
secondary diagnoses identified as OB-related antepartum diagnoses is
greater than the number of secondary diagnoses identified as OB-related
postpartum diagnoses (99 antepartum diagnoses versus 20 postpartum
diagnoses). The data also indicate that, of the 435 secondary diagnoses
reported with ICD-10-CM diagnosis code O99.89 as the principal
diagnosis, 309 (71 percent) of those secondary diagnoses were non-OB-
related diagnosis codes. Because there was a greater number of
secondary diagnoses identified as OB-related antepartum diagnoses
compared to the OB-related postpartum diagnoses within the postpartum
MS-DRGs when ICD-10-CM diagnosis code O99.89 was reported as the
principal diagnosis, we performed further analysis of diagnosis code
O99.89 within the antepartum MS-DRGs.
    Under the Version 35 ICD-10 MS-DRGs, diagnosis code O99.89 was
classified as an antepartum condition and was assigned to MS-DRG 781
(Other Antepartum Diagnoses with Medical Complications). Therefore, we
also analyzed claims data for MS-DRGs 817, 818 and 819 (Other
Antepartum Diagnoses with O.R. Procedure with MCC, with CC and without
CC/MCC, respectively) and MS-DRGs 831, 832, and 833 (Other Antepartum
Diagnoses without O.R. Procedure with MCC, with CC and without CC/MCC,
respectively) for cases reporting ICD-10-CM diagnosis code O99.89 as a
secondary diagnosis. We note that the analysis for the proposed FY 2020
ICD-10 MS-DRGs is based upon the September 2018 update of the FY 2018
MedPAR claims data that were grouped through the ICD-10 MS-DRG GROUPER
Version 36. Our findings are shown in the table below.
 Antepartum MS-DRGs With Secondary Diagnosis of Other Specified Diseases and Conditions Complicating Pregnancy,
                                          Childbirth and the Puerperium
----------------------------------------------------------------------------------------------------------------
                                                                     Number of    Average length
                             MS-DRG                                    cases          of stay      Average costs
----------------------------------------------------------------------------------------------------------------
MS-DRG 817--All cases...........................................              63             5.7         $14,948
MS-DRG 817--Cases reporting diagnosis code O99.89 as secondary                 8            10.8          24,359
 diagnosis......................................................
MS-DRG 818--All cases...........................................              78             4.1           9,343
MS-DRG 818--Cases reporting diagnosis code O99.89 as secondary                 7             3.4          14,182
 diagnosis......................................................
MS-DRG 819--All cases...........................................              25             2.2           5,893
MS-DRG 819--Cases reporting diagnosis code O99.89 as secondary                 1               1           4,990
 diagnosis......................................................
MS-DRG 831--All cases...........................................             747             4.8           7,714
MS-DRG 831--Cases reporting diagnosis code O99.89 as secondary               127             5.4           7,050
 diagnosis......................................................
MS-DRG 832--All cases...........................................           1,142             3.6           5,159
MS-DRG 832--Cases reporting diagnosis code O99.89 as secondary               145             4.2           5,656
 diagnosis......................................................
MS-DRG 833--All cases...........................................             537             2.6           3,807
MS-DRG 833--Cases reporting diagnosis code O99.89 as secondary                47             2.6           3,307
 diagnosis......................................................
----------------------------------------------------------------------------------------------------------------
    As shown in the table above, we found a total of 63 cases in MS-DRG
817 with an average length of stay of 5.7 days and average costs of
$14,948. Of these 63 cases, there were 8 cases reporting ICD-10-CM
diagnosis code O99.89 as a secondary diagnosis with an average length
of stay of 10.8 days and average costs of $24,359. For MS-DRG 818, we
found a total of 78 cases with an average length of stay of 4.1 days
and average costs of $9,343. Of these 78 cases, there were 7 cases
reporting ICD-10-CM diagnosis code O99.89 as a secondary diagnosis with
an average length of stay of 3.4 days and average costs of $14,182. For
MS-DRG 819, we found a total of 25 cases with an average length of stay
of 2.2 days and average costs of $5,893. Of these 25 cases, there was 1
case reporting ICD-10-CM diagnosis code O99.89 as a secondary diagnosis
with an average length of stay of 1 day and average costs of $4,990.
    For MS-DRG 831, we found a total of 747 cases with an average
length of stay of 4.8 days and average costs of $7,714. Of these 747
cases, there were 127 cases reporting ICD-10-CM diagnosis code O99.89
as a secondary diagnosis with an average length of stay of 5.4 days and
average costs of $7,050. For MS-DRG 832, we found a total of 1,142
cases with an average length of stay of 3.6 days and average costs of
$5,159. Of these 1,142 cases, there were 145 cases reporting ICD-10-CM
diagnosis code O99.89 as a secondary diagnosis with an average length
of stay of 4.2 days and average costs of $5,656. For MS-DRG 833, we
found a total of 537 cases with an average length of stay of 2.6 days
and average costs of $3,807. Of these 537 cases, there were 47 cases
reporting ICD-10-CM diagnosis code O99.89 as a secondary diagnosis with
an average length of stay of 2.6 days and average costs of $3,307.
[[Page 19214]]
    Overall, there was a total of 335 cases reporting ICD-10-CM
diagnosis code O99.89 as a secondary diagnosis within the antepartum
MS-DRGs. Of those 335 cases, 16 cases involved an O.R. procedure and
319 cases did not involve an O.R. procedure. The data indicate that
ICD-10-CM diagnosis code O99.89 is reported more often as a secondary
diagnosis within the antepartum MS-DRGs (335 cases) than it is reported
as a principal or secondary diagnosis within the postpartum MS-DRGs
(125 cases).
    Our clinical advisors believe that, because ICD-10-CM diagnosis
code O99.89 can be reported during the antepartum period (pregnancy),
during childbirth, or during the postpartum period (puerperium), there
is not a clear clinical indication as to which set of MS-DRGs
(antepartum, delivery, or postpartum) would be the most appropriate
assignment for this diagnosis code. They recommended that we
collaborate with the National Center for Health Statistics (NCHS) at
the Centers for Disease Control and Prevention (CDC), in consideration
of a proposal to possibly expand ICD-10-CM diagnosis code O99.89 to
become a sub-subcategory that would result in the creation of unique
codes with a sixth digit character to specify which obstetric related
stage the patient is in. For example, under subcategory O99.8-, a
proposed new sub-subcategory for ICD-10-CM diagnosis code O99.89- could
include the following proposed new diagnosis codes:
     O99.890 (Other specified diseases and conditions
complicating pregnancy);
     O99.894 (Other specified diseases and conditions
complicating childbirth); and
     O99.85 (Other specified diseases and conditions
complicating the puerperium).
    If such a proposal to create this new sub-subcategory and new
diagnosis codes were approved and finalized, it would enable improved
data collection and more appropriate MS-DRG assignment, consistent with
the current MS-DRG assignments of the existing obstetric related
diagnosis codes. For instance, a new diagnosis code described as
``complicating pregnancy'' would be clinically aligned with the
antepartum MS-DRGs, a new diagnosis code described as ``complicating
childbirth'' would be clinically aligned with the delivery MS-DRGs, and
a new diagnosis code described as ``complicating the puerperium'' would
be clinically aligned with the postpartum MS-DRGs. (We note that all
requests for new diagnosis codes require that a proposal be approved
for discussion at a future ICD-10 Coordination and Maintenance
Committee meeting.)
    While our clinical advisors could not provide a strong clinical
justification for classifying ICD-10-CM diagnosis code O99.89 as an
antepartum condition versus as a postpartum condition for the reasons
described above, they did consider the claims data to be informative as
to how the diagnosis code is being reported for obstetric patients. In
analyzing both the postpartum MS-DRGs and the antepartum MS-DRGs
discussed earlier in this section, they agreed that the data clearly
show that ICD-10-CM diagnosis code O99.89 is reported more frequently
as a secondary diagnosis within the antepartum MS-DRGs than it is
reported as a principal or secondary diagnosis within the postpartum
MS-DRGs.
    Based on our analysis of claims data and input from our clinical
advisors, we are proposing to reclassify ICD-10-CM diagnosis code
O99.89 from a postpartum condition to an antepartum condition under MDC
14. If finalized, ICD-10-CM diagnosis code O99.89 would follow the
logic as described in the FY 2019 IPPS/LTCH PPS final rule (83 FR
41212) which asks if there was a principal diagnosis of an antepartum
condition reported on the claim. If yes, the logic then asks if there
was an O.R. procedure reported on the claim. If yes, the logic assigns
the case to MS-DRG 817, 818, or 819. If no (there was not an O.R.
procedure reported on the claim), the logic assigns the case to MS-DRG
831, 832, or 833.
10. MDC 22 (Burns): Skin Graft to Perineum for Burn
    We received a request to add seven ICD-10-PCS procedure codes that
describe a skin graft to the perineum to MS-DRG 927 (Extensive Burns Or
Full Thickness Burns with MV >96 Hours with Skin Graft) and MS-DRGs 928
and 929 (Full Thickness Burn with Skin Graft Or Inhalation Injury with
CC/MCC and without CC/MCC, respectively) in MDC 22. The seven procedure
codes are listed in the following table.
------------------------------------------------------------------------
      ICD-10-PCS code                     Code description
------------------------------------------------------------------------
0HR9X73...................  Replacement of perineum skin with autologous
                             tissue substitute, full thickness, external
                             approach.
0HR9X74...................  Replacement of perineum skin with autologous
                             tissue substitute, partial thickness,
                             external approach.
0HR9XJ3...................  Replacement of perineum skin with synthetic
                             substitute, full thickness, external
                             approach.
0HR9XJ4...................  Replacement of perineum skin with synthetic
                             substitute, partial thickness, external
                             approach.
0HR9XJZ...................  Replacement of perineum skin with synthetic
                             substitute, external approach.
0HR9XK3...................  Replacement of perineum skin with non-
                             autologous tissue substitute, full
                             thickness, external approach.
0HR9XK4...................  Replacement of perineum skin with non-
                             autologous tissue substitute, partial
                             thickness, external approach.
------------------------------------------------------------------------
    These seven procedure codes are currently assigned to MS-DRGs 746
and 747 (Vagina, Cervix and Vulva Procedures with CC/MCC and without
CC/MCC, respectively). In addition, when reported in conjunction with a
principal diagnosis in MDC 21 (Injuries, Poisonings and Toxic Effects
of Drugs), these codes group to MS-DRGs 907, 908, and 909 (Other O.R.
Procedures For Injuries with MCC, with CC and without CC/MCC,
respectively), and when reported in conjunction with a principal
diagnosis in MDC 24 (Multiple Significant Trauma), these codes group to
MS-DRGs 957, 958, and 959 (Other O.R. Procedures For Multiple
Significant Trauma with MCC, with CC and without CC/MCC, respectively).
In addition, these procedures are designated as non-extensive O.R.
procedures and are assigned to MS-DRGs 987, 988 and 989 (Non-Extensive
O.R. Procedure Unrelated to Principal Diagnosis with MCC, with CC, and
without CC/MCC, respectively) when a principal diagnosis that is
unrelated to the procedure is reported on the claim.
    The requestor provided an example in which it identified one case
where a patient underwent debridement and split thickness skin graft
(STSG) to the perineum area (only), and expressed concern that the case
did not route to MS-DRGs 928 and 929 to recognize operating room
resources. (We note that the requestor did not specify the diagnosis
associated with this case nor the MS-DRG to which this one case was
grouped.) The requestor stated that providers may document various
terminologies for this anatomic site,
[[Page 19215]]
including perineum, groin, and buttocks crease; therefore, when a
provider deems a burn to affect the perineum as opposed to the groin or
buttock crease, cases should route to MS-DRGs which compensate
hospitals for skin grafting operating room resources. Therefore, the
requestor recommended that the cited seven ICD-10-PCS codes be added to
the list of procedure codes for a skin graft within MS-DRGs 927, 928,
and 929.
    We reviewed this request by analyzing claims data from the
September 2018 update of the FY 2018 MedPAR file for cases reporting
any of the above seven procedure codes in MS-DRGs 746, 747, 907, 908,
909, 957, 958, 959, 987, 988, and 989. Our findings are shown in the
following table.
                                   Cases Involving Skin Graft to the Perineum
----------------------------------------------------------------------------------------------------------------
                                                                     Number of    Average length
                             MS-DRG                                    cases          of stay      Average costs
----------------------------------------------------------------------------------------------------------------
MS-DRG 746--All cases...........................................           1,344               5         $11,847
MS-DRG 746--Cases with skin graft to the perineum procedure.....               1               2          10,830
MS-DRG 907--All cases...........................................           7,843              10          28,919
MS-DRG 907--Cases with skin graft to the perineum procedure.....               1               8          21,909
MS-DRG 908--All cases...........................................           9,286             5.3          14,601
MS-DRG 908--Cases with skin graft to the perineum procedure.....               1               6           8,410
MS-DRG 988--All cases...........................................           8,391             5.7          12,294
MS-DRG 988--Cases with skin graft to the perineum procedure.....               2               3           6,906
MS-DRG 989--All cases...........................................           1,551             3.1           8,171
MS-DRG 989--Cases with skin graft to the perineum procedure.....               1               7          14,080
----------------------------------------------------------------------------------------------------------------
    As shown in the table above, the overall volume of cases reporting
a skin graft to the perineum procedure is low, with a total of 6 cases
found. In MS-DRG 746, we found a total of 1,344 cases with an average
length of stay of 5 days and average costs of $11,847. The single case
reporting a skin graft to the perineum procedure in MS-DRG 746 had a
length of stay of 2 days and a cost of $10,830. In MS-DRG 907, we found
a total of 7,843 cases with an average length of stay of 10 days and
average costs of $28,919. The single case reporting a skin graft to the
perineum procedure in MS-DRG 907 had a length of stay of 8 days and a
cost of $21,909. In MS-DRG 908, we found a total of 9,286 cases with an
average length of stay of 5.3 days and average costs of $14,601. The
single case reporting a skin graft to the perineum procedure in MS-DRG
908 had a length of stay of 6 days and a cost of $8,410. In MS-DRG 988,
we found a total of 8,391 cases with an average length of stay of 5.7
days and average costs of $12,294. The 2 cases reporting a skin graft
to the perineum procedure in MS-DRG 988 had an average length of stay
of 3 days and average costs of $6,906. In MS-DRG 989, we found a total
of 1,551 cases with an average length of stay of 3.1 days and average
costs of $8,171. The single case reporting a skin graft to the perineum
procedure in MS-DRG 989 had a length of stay of 7 day and a cost of
$14,080. We found no cases reporting a skin graft to the perineum
procedure in MS-DRG 747, 909, 957, 958, 959, or 987. Cases reporting a
skin graft to the perineum procedure generally had shorter length of
stays and lower average costs than those of their assigned MS-DRGs
overall.
    We then analyzed claims data for MS-DRGs 927, 928, and 929 (the MS-
DRGs to which the requestor suggested that these cases group) for all
cases reporting a procedure describing a skin graft to the perineum
listed in the table above to consider how the resources involved in the
cases reporting a procedure describing a skin graft to the perineum
compared to those of all cases in MS-DRGs 927, 928, and 929. Our
findings are shown in the following table.
----------------------------------------------------------------------------------------------------------------
                                                                     Number of    Average length
                             MS-DRG                                    cases          of stay      Average costs
----------------------------------------------------------------------------------------------------------------
MS-DRG 927--All cases...........................................             146            30.9        $147,903
MS-DRG 928--All cases...........................................           1,149            15.7          45,523
MS-DRG 928--Cases with skin graft to the perineum procedure.....               5              39          64,041
MS-DRG 929--All cases...........................................             296             7.9          21,474
----------------------------------------------------------------------------------------------------------------
    As shown in the table above, for MS-DRG 927, we found a total of
146 cases with an average length of stay of 30.9 days and average costs
of $147,903; no cases reporting a skin graft to the perineum procedure
were found. For MS-DRG 928, we found a total of 1,149 cases with an
average length of stay of 15.7 days and average costs of $45,523. We
found 5 cases reporting a skin graft to the perineum procedure with an
average length of stay of 39 days and average costs of $64,041. For MS-
DRG 929, we found a total of 296 cases with an average length of stay
of 7.9 days and average costs of $21,474; and no cases reporting a skin
graft to the perineum procedure were found. We note that none of the 5
cases reporting a skin graft to the perineum in MS-DRGs 927, 928, and
929 reported a skin graft to the perineum procedure as the only
operating room procedure. Therefore, it is not possible to determine
how much of the operating room resources for these 5 cases were
attributable to the skin graft to the perineum procedure.
    Our clinical advisors reviewed the claims data described above and
noted that none of the cases reporting the seven identified procedure
codes that grouped to MS-DRGs 746, 907, 908, 988, and 989 (listed in
the table above) had a principal or secondary diagnosis of a burn,
which suggests that these skin grafts were not performed to treat a
burn. Therefore, our clinical advisors believe that it would not be
appropriate for these cases that report a skin graft to the perineum
procedure to group to MS-DRGs 927, 928, and 929, which describe burns.
Our clinical advisors state that the seven ICD-10-PCS procedure codes
that describe a skin graft to the perineum are more clinically aligned
with the other procedures in MS-DRGs 746 and 747, to which they are
currently assigned. Therefore, we are
[[Page 19216]]
not proposing to add the seven identified procedure codes to MS-DRGs
927, 928, and 929.
11. MDC 23 (Factors Influencing Health Status and Other Contacts With
Health Services): Proposed Assignment of Diagnosis Code R93.89
    We received a request to consider reassignment of ICD-10-CM
diagnosis code R93.89 (Abnormal finding on diagnostic imaging of other
specified body structures) from MDC 5 (Diseases and Disorders of the
Circulatory System) in MS-DRGs 302 and 303 (Atherosclerosis with and
without MCC and Atherosclerosis without MCC, respectively) to MDC 23
(Factors Influencing Health Status and Other Contact with Health
Services), consistent with other diagnosis codes that include abnormal
findings. However, the requestor did not suggest a specific MS-DRG
assignment within MDC 23.
    We examined claims data from the September 2018 update of the FY
2018 MedPAR file for MS-DRGs 302 and 303 and identified cases reporting
diagnosis code R93.89. Our findings are shown in the following table.
----------------------------------------------------------------------------------------------------------------
                                                                     Number of    Average length
                             MS-DRG                                    cases          of stay      Average costs
----------------------------------------------------------------------------------------------------------------
MS-DRG 302--All cases...........................................           3,750             3.8          $7,956
MS-DRG 302--Cases reporting diagnosis code R93.89...............               3             7.7          10,818
MS-DRG 303--All cases...........................................          12,986             2.3           4,920
MS-DRG 303--Cases reporting diagnosis code R93.89...............              10               2           3,416
----------------------------------------------------------------------------------------------------------------
    As shown in the table, for MS-DRG 302, there was a total of 3,750
cases with an average length of stay of 3.8 days and average costs of
$7,956. Of these 3,750 cases, there were 3 cases reporting abnormal
finding on diagnostic imaging of other specified body structures, with
an average length of stay 7.7 days and average costs of $10,818. For
MS-DRG 303, there was a total of 12,986 cases with an average length of
stay of 2.3 days and average costs of $4,920. Of these 12,986 cases,
there were 10 cases reporting abnormal finding on diagnostic imaging of
other specified body structures, with an average length of stay 2 days
and average costs of $3,416.
    Our clinical advisors reviewed this request and determined that the
assignment of diagnosis code R93.89 to MDC 5 in MS-DRGs 302 and 303 was
a result of replication from ICD-9-CM diagnosis code 793.2 (Nonspecific
(abnormal) findings on radiological and other examination of other
intrathoracic organs), which was assigned to those MS-DRGs. Therefore,
they support reassignment of diagnosis code R93.89 to MDC 23. Our
clinical advisors agree this reassignment is clinically appropriate as
it is consistent with other diagnosis codes in MDC 23 that include
abnormal findings from other nonspecified sites. Specifically, our
clinical advisors suggest reassignment of diagnosis code R89.93 to MS-
DRGs 947 and 948 (Signs and Symptoms with and without MCC,
respectively). Therefore, we are proposing to reassign ICD-10-CM
diagnosis code R93.89 from MDC 5 in MS-DRGs 302 and 303 to MDC 23 in
MS-DRGs 947 and 948.
12. Review of Procedure Codes in MS-DRGs 981 Through 983 and 987
Through 989
a. Adding Procedure Codes and Diagnosis Codes Currently Grouping to MS-
DRGs 981 Through 983 or MS-DRGs 987 Through 989 into MDCs
    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 (Nonextensive 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 2018 update of the FY 2018 MedPAR file, we are
proposing to move the cases reporting the procedures and/or principal
diagnosis codes described below 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.
(1) Gastrointestinal Stromal Tumors With Excision of Stomach and Small
Intestine
    Gastrointestinal stromal tumors (GIST) are tumors of connective
tissue, and are currently assigned to MDC 8 (Diseases and Disorders of
the Musculoskeletal System and Connective Tissue). The ICD-10-CM
diagnosis codes describing GIST are listed in the table below.
------------------------------------------------------------------------
 ICD-10-CM  diagnosis code                Code description
------------------------------------------------------------------------
C49.A0....................  Gastrointestinal stromal tumor, unspecified
                             site.
C49.A1....................  Gastrointestinal stromal tumor of esophagus.
C49.A2....................  Gastrointestinal stromal tumor of stomach.
C49.A3....................  Gastrointestinal stromal tumor of small
                             intestine.
C49.A4....................  Gastrointestinal stromal tumor of large
                             intestine.
C49.A5....................  Gastrointestinal stromal tumor of rectum.
C49.A9....................  Gastrointestinal stromal tumor of other
                             sites.
------------------------------------------------------------------------
[[Page 19217]]
    During our review of cases that group to MS-DRGs 981 through 983,
we noted that when procedures describing open excision of the stomach
or small intestine (ICD-10-PCS procedure codes 0DB60ZZ (Excision of
stomach, open approach) and 0DB80ZZ (Excision of small intestine, open
approach)) were reported with a principal diagnosis of GIST, the cases
group to MS-DRGs 981 through 983. These two excision codes are assigned
to several MDCs, as listed in the table below. Whenever there is a
surgical procedure reported on the claim, which 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''.
                       DRG Assignments for ICD-10-PCS Procedure Codes 0DB60ZZ and 0DB80ZZ
----------------------------------------------------------------------------------------------------------------
             MDC                            DRG                                DRG Description
----------------------------------------------------------------------------------------------------------------
5............................  264.........................  Other Circulatory O.R. Procedures.
6............................  326-328.....................  Stomach, Esophageal and Duodenal Procedures.
10...........................  619-621.....................  Procedures for Obesity.
17...........................  820-822.....................  Lymphoma and Leukemia with Major Procedure.
17...........................  826-828.....................  Myeloproliferative Disorders or Poorly
                                                              Differentiated Neoplasms with Major Procedure.
21...........................  907-909.....................  Other O.R. Procedures for Injuries.
24...........................  957-959.....................  Other Procedures for Multiple Significant Trauma.
----------------------------------------------------------------------------------------------------------------
    We first examined cases that reported a principal diagnosis of GIST
and ICD-10-PCS procedure code 0DB60ZZ or 0DB80ZZ that currently group
to MS-DRGs 981 through 983, as well as all cases in MS-DRGs 981 through
983. Our findings are shown in the table below.
   MS-DRGs 981-983: All Cases and Cases With Principal Diagnosis of GIST and Procedure Code 0DB60ZZ or 0DB80ZZ
----------------------------------------------------------------------------------------------------------------
                                                                     Number of    Average length
                             MS-DRG                                    cases          of stay      Average costs
----------------------------------------------------------------------------------------------------------------
MS-DRG 981--All cases...........................................          29,192            11.3         $29,862
MS-DRG 981--Cases with procedure code 0DB60ZZ...................              46            12.4          35,723
MS-DRG 981--Cases with procedure code 0DB80ZZ...................              12            10.8          28,059
MS-DRG 982--All cases...........................................          16,834             6.3          16,939
MS-DRG 982--Cases with procedure code 0DB60ZZ...................             104             6.8          17,442
MS-DRG 982--Cases with procedure code 0DB80ZZ...................              41               8          18,961
MS-DRG 983--All cases...........................................           3,166             3.3          11,872
MS-DRG 983--Cases with procedure code 0DB60ZZ...................              97             4.5          11,901
MS-DRG 983--Cases with procedure code 0DB80ZZ...................              19             4.5           9,971
----------------------------------------------------------------------------------------------------------------
    Of the MDCs to which these gastrointestinal excision procedures are
currently assigned, our clinical advisors indicated that cases with a
principal diagnosis of GIST that also report an open gastrointestinal
excision procedure code would logically be assigned to MDC 6 (Diseases
and Disorders of the Digestive System). Within MDC 6, ICD-10-PCS
procedures codes 0DB60ZZ and 0DB80ZZ are currently assigned to MS-DRGs
326, 327, and 328 (Stomach, Esophageal and Duodenal Procedures with
MCC, CC, and without CC/MCC, respectively). To understand how the
resources associated with the subset of cases reporting a principal
diagnosis of GIST and procedure code 0DB60ZZ or 0DB80ZZ compare to
those of cases in MS-DRGs 326, 327, and 328 as a whole, we examined the
average costs and average length of stay for all cases in MS-DRGs 326,
327, and 328. Our findings are shown in the table below.
----------------------------------------------------------------------------------------------------------------
                                                                     Number of    Average length
                             MS-DRG                                    cases          of stay      Average costs
----------------------------------------------------------------------------------------------------------------
MS-DRG 326--All cases...........................................           9,898              13         $36,129
MS-DRG 327--All cases...........................................           9,602             6.6          18,736
MS-DRG 328--All cases...........................................           7,634             2.9          11,555
----------------------------------------------------------------------------------------------------------------
    Our clinical advisors reviewed these data and noted that the
average length of stay and average costs of this subset of cases were
similar to those of cases in MS-DRGs 326, 327, and 328 in MDC 6. To
consider whether it was appropriate to move the GIST diagnosis codes
from MDC 8, we examined the other procedure codes reported for cases
that report a principal diagnosis of GIST and noted that almost all of
the O.R. procedures most frequently reported were assigned to MDC 6
rather than MDC 8. Our clinical advisors believe that, given the
similarity in resource use between this subset of cases and cases in
MS-DRGs 326, 327, and 328, and that the GIST diagnosis codes are
gastrointestinal in nature, they would be more appropriately assigned
to MS-DRGs 326, 327, and 328 in MDC 6 than their current assignment in
MDC 8. Therefore, we are proposing to move the GIST diagnosis codes
listed above from MDC 8 to MDC 6 within MS-DRGs 326, 327, and 328.
Under our proposal, cases reporting a principal diagnosis of GIST would
group to MS-DRGs 326, 327, and 328.
(2) Peritoneal Dialysis Catheter Complications
    During our review of the cases currently grouping to MS-DRGs 981-
[[Page 19218]]
983, we noted that cases reporting a principal diagnosis of
complications of peritoneal dialysis catheters with procedure codes
describing removal, revision, and/or insertion of new peritoneal
dialysis catheters group to MS-DRGs 981 through 983. The ICD-10-CM
diagnosis codes that describe complications of peritoneal dialysis
catheters, listed in the table below, are assigned to MDC 21 (Injuries,
Poisonings and Toxic Effects of Drugs). These principal diagnoses are
frequently reported with the procedure codes describing removal,
revision, and/or insertion of new peritoneal dialysis catheters.
------------------------------------------------------------------------
      ICD-10-CM code                      Code description
------------------------------------------------------------------------
T85.611A..................  Breakdown (mechanical) of intraperitoneal
                             dialysis catheter, initial encounter.
T85.621A..................  Displacement of intraperitoneal dialysis
                             catheter, initial encounter.
T85.631A..................  Leakage of intraperitoneal dialysis
                             catheter, initial encounter.
T85.691A..................  Other mechanical complication of
                             intraperitoneal dialysis catheter, initial
                             encounter.
T85.71XA..................  Infection and inflammatory reaction due to
                             peritoneal dialysis catheter, initial
                             encounter.
T85.898A..................  Other specified complication of other
                             internal prosthetic devices, implants and
                             graft, initial encounter.
------------------------------------------------------------------------
    The procedure codes in the table below describe removal, revision,
and/or insertion of new peritoneal dialysis catheters or revision of
synthetic substitutes and are currently assigned to MDC 6 (Diseases and
Disorders of the Digestive System) in MS-DRGs 356, 357, and 358 (Other
Digestive System O.R. Procedures with MCC, with CC, and without CC/MCC,
respectively).
------------------------------------------------------------------------
ICD-10-PCS  procedure code                Code description
------------------------------------------------------------------------
0WHG03Z...................  Insertion of infusion device into peritoneal
                             cavity, open approach.
0WHG43Z...................  Insertion of infusion device into peritoneal
                             cavity, percutaneous endoscopic approach.
0WPG03Z...................  Removal of infusion device from peritoneal
                             cavity, open approach.
0WPG43Z...................  Removal of infusion device from peritoneal
                             cavity, percutaneous endoscopic approach.
0WWG03Z...................  Revision of infusion device in peritoneal
                             cavity, open approach.
0WWG0JZ...................  Revision of synthetic substitute in
                             peritoneal cavity, open approach.
0WWG43Z...................  Revision of infusion device in peritoneal
                             cavity, percutaneous endoscopic approach.
0WWG4JZ...................  Revision of synthetic substitute in
                             peritoneal cavity, percutaneous endoscopic
                             approach.
------------------------------------------------------------------------
    We examined the claims data from the September 2018 update of the
FY 2018 MedPAR file for the average costs and length of stay for cases
that report a principal diagnosis of complications of peritoneal
dialysis catheters with a procedure describing removal, revision, and/
or insertion of new peritoneal dialysis catheters or revision of
synthetic substitutes. Our findings are shown in the table below. We
note that we did not find any such cases in MS-DRG 983.
  MS-DRG 981 Through 982: Peritoneal Dialysis Catheter Procedures With Principal Diagnosis of Complications of
                                          Peritoneal Dialysis Catheters
----------------------------------------------------------------------------------------------------------------
                                                                     Number of    Average length
                             MS-DRG                                    cases          of stay      Average costs
----------------------------------------------------------------------------------------------------------------
MS-DRG 981--Cases reporting peritoneal dialysis catheter                   1,603             8.5         $20,676
 procedures with a principal diagnosis of complications of
 peritoneal dialysis catheters..................................
MS-DRG 982--Cases reporting peritoneal dialysis catheter                       5             8.6          11,694
 procedures with a principal diagnosis of complications of
 peritoneal dialysis catheters..................................
----------------------------------------------------------------------------------------------------------------
    Our clinical advisors indicated that, within MDC 21, the procedures
describing removal, revision, and/or insertion of new peritoneal
dialysis catheters or revision of synthetic substitutes most suitably
group to MS-DRGs 907, 908, and 909, which contain all procedures for
injuries that are not specific to the hand, skin, and wound
debridement. To determine how the resources for this subset of cases
compared to cases in MS-DRGs 907, 908, and 909 as a whole, we examined
the average costs and length of stay for cases in MS-DRGs 907, 908, and
909. Our findings are shown in the table below.
----------------------------------------------------------------------------------------------------------------
                                                                     Number of    Average length
                             MS-DRG                                    cases          of stay      Average costs
----------------------------------------------------------------------------------------------------------------
MS-DRG 907--All cases...........................................           9,482             9.7         $27,492
MS-DRG 908--All cases...........................................           9,305             5.3          14,597
MS-DRG 909--All cases...........................................           3,011               3           9,587
----------------------------------------------------------------------------------------------------------------
    Our clinical advisors considered these data and noted that the
average costs and length of stay for this subset of cases, most of
which group to MS-DRG 981, are lower than the average costs and length
of stay for cases of the same
[[Page 19219]]
severity level in MS-DRGs 907. However, our clinical advisors believe
that the procedures describing removal, revision, and/or insertion of
new peritoneal dialysis catheters or revision of synthetic substitutes
are clearly related to the principal diagnosis codes describing
complications of peritoneal dialysis catheters and, therefore, it is
clinically appropriate for the procedures to group to the same MS-DRGs
as the principal diagnoses. Therefore, we are proposing to add the
eight procedure codes listed in the table above that describe removal,
revision, and/or insertion of new peritoneal dialysis catheters or
revision of synthetic substitutes to MDC 21 (Injuries, Poisonings &
Toxic Effects of Drugs) in MS-DRGs 907, 908, and 909. Under this
proposal, cases reporting a principal diagnosis of complications of
peritoneal dialysis catheters with a procedure describing removal,
revision, and/or insertion of new peritoneal dialysis catheters or
revision of synthetic substitutes would group to MS-DRGs 907, 908, and
909.
(3) Bone Excision With Pressure Ulcers
    During our review of the cases that group to MS-DRGs 981 through
983, we noted that when procedures describing excision of the sacrum,
pelvic bones, and coccyx (ICD-10-PCS procedure codes 0QB10ZZ (Excision
of sacrum, open approach), 0QB20ZZ (Excision of right pelvic bone, open
approach), 0QB30ZZ (Excision of left pelvic bone, open approach), and
0QBS0ZZ (Excision of coccyx, open approach)) are reported with a
principal diagnosis of pressure ulcers in MDC 9 (Diseases and Disorders
of the Skin, Subcutaneous Tissue and Breast), the cases group to MS-
DRGs 981 through 983. The procedures describing excision of the sacrum,
pelvic bones, and coccyx group to several MDCs, which are listed in the
table below.
                 MS-DRG Assignments for ICD-10-PCS Codes 0QB10ZZ, 0QB20ZZ, 0QB30ZZ, and 0QBS0ZZ
----------------------------------------------------------------------------------------------------------------
             MDC                          MS-DRG                              MS-DRG description
----------------------------------------------------------------------------------------------------------------
3............................  133-134.....................  Other Ear, Nose, Mouth and Throat O.R. Procedures
                                                              with CC/MCC and without CC/MCC, respectively.
8............................  515-517.....................  Other Musculoskeletal System and Connective Tissue
                                                              O.R. Procedures with MCC, with CC, and without CC/
                                                              MCC, respectively.
10...........................  628-630.....................  Other Endocrine, Nutritional and Metabolic O.R.
                                                              Procedures with MCC, with CC, and without CC/MCC,
                                                              respectively.
21...........................  907-909.....................  Other O.R. Procedures for Injuries.
24...........................  957-959.....................  Other Procedures for Multiple Significant Trauma.
----------------------------------------------------------------------------------------------------------------
    When cases reporting procedure codes describing excision of the
sacrum, pelvic bones, and coccyx report a principal diagnosis from MDC
9, the ICD-10-CM diagnosis codes that are most frequently reported as
principal diagnoses are listed below.
------------------------------------------------------------------------
 ICD-10-CM  diagnosis code                Code description
------------------------------------------------------------------------
L89.150...................  Pressure ulcer of sacral region,
                             unstageable.
L89.153...................  Pressure ulcer of sacral region, stage 3.
L89.154...................  Pressure ulcer of sacral region, stage 4.
L89.214...................  Pressure ulcer of right hip, stage 4.
L89.224...................  Pressure ulcer of left hip, stage 4.
L89.314...................  Pressure ulcer of right buttock, stage 4.
L89.324...................  Pressure ulcer of left buttock, stage 4.
L89.894...................  Pressure ulcer of other site, stage 4.
------------------------------------------------------------------------
    We examined the claims data from the September 2018 update of the
FY 2018 MedPAR file for the average costs and length of stay for cases
that report procedures describing excision of the sacrum, pelvic bones,
and coccyx in conjunction with a principal diagnosis of pressure
ulcers.
    MS-DRGs 981 Through 983: Cases Reporting Excision of the Sacrum, Pelvic Bones, and Coccyx Reported With a
                                     Principal Diagnosis of Pressure Ulcers
----------------------------------------------------------------------------------------------------------------
                                                                     Number of    Average length
                             MS-DRG                                    cases          of stay      Average costs
----------------------------------------------------------------------------------------------------------------
MS-DRG 981--Cases reporting excision of the sacrum, pelvic                   394            11.9         $24,398
 bones, and coccyx and a principal diagnosis of pressure ulcers.
MS-DRG 982--Cases Reporting excision of the sacrum, pelvic                   477             9.4          16,464
 bones, and coccyx and a principal diagnosis of pressure ulcers.
MS-DRG 983--Cases Reporting excision of the sacrum, pelvic                    38             4.8           8,519
 bones, and coccyx and a principal diagnosis of pressure ulcers.
----------------------------------------------------------------------------------------------------------------
    Our clinical advisors indicated that, given the nature of these
procedures, they could not be appropriately assigned to the specific
surgical MS-DRGs within MDC 9, which are: Skin graft; skin debridement;
mastectomy for malignancy; and breast biopsy, local excision, and other
breast procedures. Therefore, our clinical advisors believe that these
procedures 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), which contain procedures
[[Page 19220]]
assigned to MDC 9 that do not fit within the specific surgical MS-DRGs
in MDC 9. Therefore, we examined the claims data for the average length
of stay and average costs for MS-DRGs 579, 580, and 581 in MDC 9. Our
findings are shown in the table below.

----------------------------------------------------------------------------------------------------------------
                                                                     Number of    Average length
                             MS-DRG                                    cases          of stay      Average costs
----------------------------------------------------------------------------------------------------------------
MS-DRG 579......................................................           4,091             9.2         $19,873
MS-DRG 580......................................................          10,048             5.2          11,229
MS-DRG 581......................................................           4,364               3           8,987
----------------------------------------------------------------------------------------------------------------
    Our clinical advisors reviewed these data and noted that, in this
subset of cases, most cases group to MS-DRGs 981 and 982 and have
greater average length of stay and average costs than those cases of
the same severity level in MS-DRGs 579 and 580. The smaller number of
cases that group to MS-DRG 983 have lower average costs than cases in
MS-DRG 581. However, our clinical advisors believe that the procedure
codes describing excision of the sacrum, pelvic bones, and coccyx are
clearly related to the principal diagnosis codes describing pressure
ulcers, as these procedures would be performed to treat pressure ulcers
in the sacrum, hip, and buttocks regions. Therefore, our clinical
advisors believe that it is clinically appropriate for the procedures
to group to the same MS-DRGs as the principal diagnoses. Therefore, we
are proposing to add the ICD-10-PCS procedure codes describing excision
of the sacrum, pelvic bones, and coccyx to MDC 9 in MS-DRGs 579, 580,
and 581. Under this proposal, cases reporting a principal diagnosis in
MDC 9 (such as pressure ulcers) with a procedure describing excision of
the sacrum, pelvic bones, and coccyx would group to MS-DRGs 579, 580,
and 581.
(4) Lower Extremity Muscle and Tendon Excision
    During the review of the cases that group to MS-DRGs 981 through
983, we noted that when several ICD-10-PCS procedure codes describing
excision of lower extremity muscles and tendons are reported in
conjunction with ICD-10-CM diagnosis codes in MDC 10 (Endocrine,
Nutritional and Metabolic Diseases and Disorders), the cases group to
MS-DRGs 981 through 983. These ICD-10-PCS procedure codes are listed in
the table below, and are assigned to several MS-DRGs, which are also
listed below.
----------------------------------------------------------------------------------------------------------------
   ICD-10-PCS  procedure code                      Code description
-----------------------------------------------------------------------------------
0KBN0ZZ.........................  Excision of right hip muscle, open approach.
0KBP0ZZ.........................  Excision of left hip muscle, open approach.
0KBS0ZZ.........................  Excision of right lower leg muscle, open
                                   approach.
0KBT0ZZ.........................  Excision of left lower leg muscle, open approach.
0KBV0ZZ.........................  Excision of right foot muscle, open approach.
0KBW0ZZ.........................  Excision of left foot muscle, open approach.
0LBV0ZZ.........................  Excision of right foot tendon, open approach.
0LBW0ZZ.........................  Excision of left foot tendon, open approach.
----------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------
             MDC                          MS-DRG                              MS-DRG description
----------------------------------------------------------------------------------------------------------------
01...........................  040-042.....................  Peripheral, Cranial Nerve and Other Nervous System
                                                              Procedures with MCC, with CC or Peripheral
                                                              Neurostimulator, and without CC/MCC, respectively.
08...........................  500-502.....................  Soft Tissue Procedures with MCC, with CC, and
                                                              without CC/MCC, respectively.
09...........................  579-581.....................  Other Skin, Subcutaneous Tissue and Breast
                                                              Procedures with MCC, with CC, and without CC/MCC,
                                                              respectively.
21...........................  907-909.....................  Other O.R. Procedures for Injuries.
24...........................  957-959.....................  Other Procedures for Multiple Significant Trauma.
----------------------------------------------------------------------------------------------------------------
    The ICD-10-CM diagnosis codes in MDC 10 that are most frequently
reported as the principal diagnosis with a procedure describing
excision of lower extremity muscles and tendons are listed in the table
below. The combination indicates debridement procedures for more
complex diabetic ulcers.
------------------------------------------------------------------------
 ICD-10-CM  procedure code                Code description
------------------------------------------------------------------------
E11.621...................  Type 2 diabetes mellitus with foot ulcer.
E11.69....................  Type 2 diabetes mellitus with other
                             specified complication.
E11.628...................  Type 2 diabetes mellitus with other skin
                             complications.
E11.622...................  Type 2 diabetes mellitus with other skin
                             ulcer.
E10.621...................  Type 1 diabetes mellitus with foot ulcer.
------------------------------------------------------------------------
    To understand the resource use for the subset of cases reporting
procedure codes describing excision of lower extremity muscles and
tendons that are currently grouping to MS-DRGs 981 through 983, we
examined claims data
[[Page 19221]]
for the average length of stay and average costs for these cases. Our
findings are shown in the table below.
  MS-DRGs 981-983: Cases Reporting Procedures Describing Excision of Lower Extremity Muscles and Tendons With a
                                          Principal Diagnosis in MDC 10
----------------------------------------------------------------------------------------------------------------
                                                                     Number of    Average length
                             MS-DRG                                    cases          of stay      Average costs
----------------------------------------------------------------------------------------------------------------
MS-DRG 981--Cases reporting excision of lower extremity muscles              125             9.1         $19,031
 and tendons and a principal diagnosis in MDC 10................
MS-DRG 982--Cases reporting excision of lower extremity muscles              561             6.2          12,000
 and tendons and a principal diagnosis in MDC 10................
MS-DRG 983--Cases reporting excision of lower extremity muscles               16             4.8           9,003
 and tendons and a principal diagnosis in MDC 10................
----------------------------------------------------------------------------------------------------------------
    Our clinical advisors examined cases reporting procedures
describing excision of lower extremity muscles and tendons with a
principal diagnosis in the MS-DRGs within MDC 10 and determined that
these cases would most suitably group to MS-DRGs 622, 623, and 624
(Skin Grafts and Wound Debridement for Endocrine, Nutritional and
Metabolic Disorders with MCC, with CC, and without CC/MCC,
respectively). Therefore, we examined the average length of stay and
average costs for cases assigned to MS-DRGs 622, 623, and 624. Our
findings are shown in the table below.
----------------------------------------------------------------------------------------------------------------
                                                                     Number of    Average length
                             MS-DRG                                    cases          of stay      Average costs
----------------------------------------------------------------------------------------------------------------
MS-DRG 622......................................................           1,540            11.7         $25,114
MS-DRG 623......................................................           4,849             6.6          13,490
MS-DRG 624......................................................             232             3.7           7,442
----------------------------------------------------------------------------------------------------------------
    Our clinical advisors reviewed these data and noted that most of
the cases reporting procedures describing excision of lower extremity
muscles and tendons group to MS-DRGs 981 and 982. For these cases, the
average length of stay and average costs are lower than those of cases
that currently group to MS-DRGs 622 and 623. However, our clinical
advisors believe that these procedures are clearly related to the
principal diagnoses in MDC 10, as they would be performed to treat
skin-related complications of diabetes and, therefore, it is clinically
appropriate for the procedures to group to the same MS-DRGs as the
principal diagnoses. Therefore, we are proposing to add the procedure
codes listed previously describing excision of lower extremity muscles
and tendons to MDC 10. Under our proposal, cases reporting these
procedure codes with a principal diagnosis in MDC 10 would group to MS-
DRGs 622, 623, and 624.
(5) Kidney Transplantation Procedures
    During our review of the cases that group to MS-DRGs 981 through
983, we noted that when procedures describing transplantation of
kidneys (ICD-10-PCS procedure codes 0TY00Z0 (Transplantation of right
kidney, allogeneic, open approach) and 0TY10Z0 (Transplantation of left
kidney, allogeneic, open approach)) are reported in conjunction with
ICD-10-CM diagnosis codes in MDC 5 (Diseases and Disorders of the
Circulatory System), the cases group to MS-DRGs 981 through 983. The
ICD-10-CM diagnosis codes in MDC 5 that are reported with the kidney
transplantation codes are I13.0 (Hypertensive heart and chronic kidney
disease with heart failure and with stage 1 through stage 4 chronic
kidney disease) and I13.2 (Hypertensive heart and chronic kidney
disease with heart failure and with stage 5 chronic kidney disease),
which group to MDC 5. Procedure codes describing transplantation of
kidneys are assigned to MS-DRG 652 (Kidney Transplant) in MDC 11. We
examined claims data to identify the average length of stay and average
costs for cases reporting procedure codes describing transplantation of
kidneys with a principal diagnosis in MDC 5, which are currently
grouping to MS-DRGs 981 through 983. Our findings are shown in the
table below. We did not find any such cases in MS-DRG 983.
    MS-DRGs 981 Through 983: Cases Reporting Procedures Describing Transplantation of Kidney With a Principal
                                               Diagnosis in MDC 5
----------------------------------------------------------------------------------------------------------------
                                                                     Number of    Average length
                             MS-DRG                                    cases          of stay      Average costs
----------------------------------------------------------------------------------------------------------------
MS-DRG 981--Cases reporting transplantation of kidney and a                  285             6.8         $25,340
 principal diagnosis in MDC 5...................................
MS-DRG 982--Cases reporting transplantation of kidney and a                    2             3.5          21,678
 principal diagnosis in MDC 5...................................
----------------------------------------------------------------------------------------------------------------
    Our clinical advisors examined the MS-DRGs within MDC 5 and
indicated that, given the nature of the procedures compared to the
specific surgical procedures contained in the other surgical MS-DRGs in
MDC 5, they could not be appropriately assigned to any of the specific
surgical MS-DRGs. Therefore, they determined that these cases would
most suitably group to MS-DRG 264 (Other Circulatory System O.R.
Procedures), which contains a broader range of procedures related to
MDC 5 diagnoses. We examined claims data to determine the average
length of stay and
[[Page 19222]]
average costs for cases assigned to MS-DRG 264. We found a total of
10,073 cases, with an average length of stay of 9.3 days and average
costs of $22,643.
    Our clinical advisors reviewed these data and noted that the
average costs for cases reporting transplantation of kidney with a
diagnosis from MDC 5 are similar to the average costs of cases in MS-
DRG 264 ($22,643 in MS-DRG 264 compared to $25,340 in MS-DRG 981),
while the average length of stay is shorter than that of cases in MS-
DRG 264 (9.3 days in MS-DRG 264 compared to 6.8 days in MS-DRG 981).
Our clinical advisors noted that ICD-10-CM diagnosis codes describing
hypertensive heart and chronic kidney disease without heart failure
(I13.10 (Hypertensive heart and chronic kidney disease without heart
failure, with stage 1 through stage 4 chronic kidney disease, or
unspecified chronic kidney disease) and I13.11 (Hypertensive heart and
chronic kidney disease without heart failure, with stage 5 chronic
kidney disease, or end stage renal disease group) group to MS-DRG 652
(Kidney Transplant) in MDC 11 (Diseases and Disorders of the Kidney and
Urinary Tract). Our clinical advisors also noted that the counterpart
codes describing hypertensive heart and chronic kidney disease with
heart failure are as related to the kidney transplantation codes as the
codes without heart failure, but because the codes with heart failure
group to MDC 5, cases reporting a kidney transplant procedure with a
diagnosis code of hypertensive heart and chronic kidney disease with
heart failure currently group to MS-DRGs 981 through 983. Therefore, we
are proposing to add ICD-10-PCS procedure codes 0TY00Z0 and 0TY10Z0 to
MS-DRG 264 in MDC 5. Under this proposal, cases reporting a principal
diagnosis in MDC 5 with a procedure describing kidney transplantation
would group to MS-DRG 264 in MDC 5. We note that because MDC 5 covers
the circulatory system, and kidney transplants generally group to MDC
11, we are seeking public comments on whether the procedure codes
should instead continue to group to MS-DRGs 981 through 983.
(6) Insertion of Feeding Device
    During our review of the cases that group to MS-DRGs 981 through
983, we noted that when ICD-10-PCS procedure code 0DH60UZ (Insertion of
feeding device into stomach, open approach) is reported with ICD-10-CM
diagnosis codes assigned to MDC 1 (Diseases and Disorders of the
Nervous System) or MDC 10 (Endocrine, Nutritional and Metabolic
Diseases and Disorders), the cases group to MS-DRGs 981 through 983.
ICD-10-PCS procedure code 0DH60UZ is currently assigned to MDC 6
(Diseases and Disorders of the Digestive System) in MS-DRGs 326, 327,
and 328 (Stomach, Esophageal and Duodenal Procedures) and MDC 21
(Injuries, Poisonings and Toxic Effects of Drugs) in MS-DRGs 907, 908,
and 909 (Other O.R. Procedures for Injuries). We also noticed that: (1)
When ICD-10-PCS procedure code 0DH60UZ is reported with a principal
diagnosis in MDC 1, the ICD-10-CM diagnosis codes reported with this
procedure code describe cerebral infarctions of various etiology and
anatomic locations and resulting complications; and (2) when ICD-10-PCS
procedure code 0DH60UZ is reported with a principal diagnosis in MDC
10, the ICD-10-CM diagnosis codes reported with this procedure code
pertain to dehydration, failure to thrive, and various forms of
malnutrition.
    We examined claims data to identify the average length of stay and
average costs for cases in MS-DRGs 981 through 983 reporting ICD-10-PCS
procedure code 0DH60UZ in conjunction with a principal diagnosis from
MDC 1 or MDC 10. Our findings are shown in the table below.
  MS-DRGs 981 Through 983: Cases Reporting Procedure Code 0DH60UZ With a Principal Diagnosis in MDC 1 or MDC 10
----------------------------------------------------------------------------------------------------------------
                                                                     Number of    Average length
                             MS-DRG                                    cases          of stay      Average costs
----------------------------------------------------------------------------------------------------------------
MS-DRG 981--Cases reporting procedure code 0DH60UZ and a                     115            19.3         $40,598
 principal diagnosis in MDC 1...................................
MS-DRG 982--Cases reporting procedure code 0DH60UZ and a                      43            13.2          25,042
 principal diagnosis in MDC 1...................................
MS-DRG 983--Cases reporting procedure code 0DH60UZ and a                       4            14.3          26,954
 principal diagnosis in MDC 1...................................
MS-DRG 981--Cases reporting procedure code 0DH60UZ and a                      47            13.4          24,690
 principal diagnosis in MDC 10..................................
MS-DRG 982--Cases reporting procedure code 0DH60UZ and a                      20             7.2          12,792
 principal diagnosis in MDC 10..................................
MS-DRG 983--Cases reporting procedure code 0DH60UZ and a                       5             5.0           8,608
 principal diagnosis in MDC 10..................................
----------------------------------------------------------------------------------------------------------------
    Our clinical advisors determined that the feeding tube procedure
was related to specific diagnoses within MDC 1 and MDC 10 and,
therefore, could be assigned to both MDCs. Therefore, they reviewed the
MS-DRGs within MDC 1 and MDC 10. They determined that the most suitable
MS-DRG assignment within MDC 1 would be MS-DRGs 040, 041, and 042
(Peripheral, Cranial Nerve and Other Nervous System Procedures with
MCC, with CC or Peripheral Neurostimulator, and without CC/MCC,
respectively), which contain procedures assigned to MDC 1 that describe
insertion of devices into anatomical areas that are not part of the
nervous system. Our clinical advisors determined that the most suitable
MS-DRG assignment within MDC 10 would be MS-DRGs 628, 629, and 630
(Other Endocrine, Nutritional and Metabolic O.R. Procedures with MCC,
with CC, and without CC/MCC, respectively), which contain the most
clinically similar procedures assigned to MDC 10, such as those
describing insertion of infusion pump into subcutaneous tissue and
fascia. Therefore, we examined claims data to identify the average
length of stay and average costs for cases assigned to MDC 1 in MS-DRGs
040, 041, and 042 and MDC 10 in MS-DRGs 628, 629, and 630. Our findings
are shown in the tables below.
[[Page 19223]]
----------------------------------------------------------------------------------------------------------------
                                                                     Number of    Average length
                        MS-DRGs in MDC 1                               cases          of stay      Average costs
----------------------------------------------------------------------------------------------------------------
MS-DRG 040......................................................           4,211            10.2         $27,096
MS-DRG 041......................................................           6,153             5.1          16,917
MS-DRG 042......................................................           2,249             3.0          13,365
----------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------
                                                                     Number of    Average length
                        MS-DRGs in MDC 10                              cases          of stay      Average costs
----------------------------------------------------------------------------------------------------------------
MS-DRG 628......................................................           3,004             9.9         $25,472
MS-DRG 629......................................................           5,435             7.2          16,391
MS-DRG 630......................................................             237             3.2          10,659
----------------------------------------------------------------------------------------------------------------
    Our clinical advisors reviewed these data and noted that the
average length of stay and average costs for the subset of cases
reporting ICD-10-PCS procedure code 0DH60UZ with a principal diagnosis
assigned to MDC 1 are higher than those cases in MS-DRGs 040, 041, and
042. For example, the cases reporting ICD-10-PCS procedure code 0DH60UZ
and a principal diagnosis in MDC 1 that currently group to MS-DRG 981
have an average length of stay of 19.3 days and average costs of
$40,598, while the cases in MS-DRG 040 have an average length of stay
of 10.2 days and average costs of $27,096. Our clinical advisors noted
that the average length of stay and average costs for the subset of
cases reporting ICD-10-PCS procedure code 0DH60UZ with a principal
diagnosis assigned to MDC 10 are more closely aligned with those cases
in MS-DRGs 628, 629, and 630. In both cases, our clinical advisors
believe that the insertion of feeding device is clearly related to the
principal diagnoses in MDC 1 and MDC 10 and, therefore, it is
clinically appropriate for the procedures to group to the same MS-DRGs
as the principal diagnoses. Therefore, we are proposing to add ICD-10-
PCS procedure code 0DH60UZ to MDC 1 and MDC 10. Under this proposal,
cases reporting procedure code 0DH60UZ with a principal diagnosis in
MDC 1 would group to MS-DRGs 040, 041, and 042, while cases reporting
ICD-10-PCS procedure code 0DH60UZ with a principal diagnosis in MDC 10
would group to MS-DRGs 628, 629, and 630.
(7) Basilic Vein Reposition in Chronic Kidney Disease
    During our review of the cases that group to MS-DRGs 981 through
983, we noted that when procedures codes describing reposition of
basilic vein (ICD-10-PCS procedure codes 05SB0ZZ (Reposition right
basilic vein, open approach), 05SB3ZZ (Reposition right basilic vein,
percutaneous approach), 05SC0ZZ (Reposition left basilic vein, open
approach), and 05SC3ZZ (Reposition left basilic vein, percutaneous
approach)) are reported with a principal diagnosis in MDC 11 (Diseases
and Disorders of the Kidney and Urinary Tract) (typically describing
chronic kidney disease), the cases group to MS-DRGs 981 through 983.
This code combination suggests a revision of an arterio-venous fistula
in a patient on chronic hemodialysis. We examined claims data to
identify the average length of stay and average costs for cases
reporting procedures describing reposition of basilic vein with a
principal diagnosis in MDC 11, which are currently grouping to MS-DRGs
981 through 983. Our findings are shown in the table below.
  MS-DRGs 981-983: Cases Reporting Procedures Describing Reposition of Basilic Vein With Principal Diagnosis in
                                                     MDC 11
----------------------------------------------------------------------------------------------------------------
                                                                     Number of    Average length
                             MS-DRG                                    cases          of stay      Average costs
----------------------------------------------------------------------------------------------------------------
MS-DRG 981--Cases reporting procedures describing reposition of               48             4.6         $12,232
 basilic vein and a principal diagnosis in MDC 11...............
MS-DRG 982--Cases reporting procedures describing reposition of               10             6.9          18,481
 basilic vein and a principal diagnosis in MDC 11...............
MS-DRG 983--Cases reporting procedures describing reposition of                1             3.0           3,552
 basilic vein and a principal diagnosis in MDC 11...............
----------------------------------------------------------------------------------------------------------------
    Our clinical advisors examined claims data for cases in the MS-DRGs
within MDC 11 and determined that cases reporting procedures describing
reposition of basilic vein 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), to which MDC 11 procedures describing reposition of
veins (other than renal veins) are assigned. Therefore, we examined
claims data to identify the average length of stay and average costs
for cases assigned to MS-DRGs 673, 674, and 675. Our findings are shown
in the table below.
----------------------------------------------------------------------------------------------------------------
                                                                     Number of    Average length
                             MS-DRG                                    cases          of stay      Average costs
----------------------------------------------------------------------------------------------------------------
MS-DRG 673......................................................          10,542            10.8         $25,842
MS-DRG 674......................................................           6,167             7.4          17,685
MS-DRG 675......................................................             437             3.9          11,858
----------------------------------------------------------------------------------------------------------------
[[Page 19224]]
    Our clinical advisors reviewed these data and noted that the
average length of stay and average costs for cases reporting procedures
describing reposition of basilic vein with a principal diagnosis in MDC
11 with an MCC are significantly lower than for those cases in MS-DRG
673. The average length of stay and average costs are similar for those
cases with a CC, while the single case without a CC or MCC had
significantly lower costs than the average costs of cases in MS-DRG
675. However, our clinical advisors believe that when the procedures
describing reposition of basilic vein are reported with a principal
diagnosis describing chronic kidney disease, the procedure is likely
related to arteriovenous fistulas for dialysis associated with the
chronic kidney disease. Therefore, our clinical advisors believe that
it is clinically appropriate for the procedures to group to the same
MS-DRGs as the principal diagnoses. Therefore, we are proposing to add
ICD-10-PCS procedures codes 05SB0ZZ, 05SB3ZZ, 05SC0ZZ, and 05SC3ZZ to
MDC 11. Under our proposal, cases reporting procedure codes describing
reposition of basilic vein with a principal diagnosis in MDC 11 would
group to MS-DRGs 673, 674, and 675.
(8) Colon Resection With Fistula
    During our review of the cases that group to MS-DRGs 981 through
983, we noted that when ICD-10-PCS procedure code 0DTN0ZZ (Resection of
sigmoid colon, open 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. The principal diagnosis most
frequently reported with ICD-10-PCS procedure code 0DTN0ZZ in MDC 11 is
ICD-10-CM code N321 (Vesicointestinal fistula). ICD-10-PCS procedure
code 0DTN0ZZ currently groups to several MDCs, which are listed in the
table below.
        MS-DRG Assignments for ICD-10-PCS Procedure Code 0DTN0ZZ
------------------------------------------------------------------------
          MDC                   MS-DRG             MS-DRG description
------------------------------------------------------------------------
6.....................  329-331...............  Major Small and Large
                                                 Bowel Procedures.
17....................  820-822...............  Lymphoma and Leukemia
                                                 with Major Procedure.
17....................  826-828...............  Myeloproliferative
                                                 Disorders or Poorly
                                                 Differentiated
                                                 Neoplasms with Major
                                                 Procedure.
21....................  907-909...............  Other O.R. Procedures
                                                 for Injuries.
24....................  957-959...............  Other Procedures for
                                                 Multiple Significant
                                                 Trauma.
------------------------------------------------------------------------
    We examined claims data to identify the average length of stay and
average costs for cases reporting procedure code 0DTN0ZZ with a
principal diagnosis in MDC 11, which are currently grouping to MS-DRGs
981 through 983. Our findings are shown in the table below.
----------------------------------------------------------------------------------------------------------------
                                                                     Number of    Average length
                             MS-DRG                                    cases          of stay      Average costs
----------------------------------------------------------------------------------------------------------------
MS-DRG 981--Cases reporting procedure code 0DTN0ZZ and a                      27           15.81         $44,743
 principal diagnosis in MDC 11..................................
MS-DRG 982--Cases reporting procedure code 0DTN0ZZ and a                      33            8.48          20,105
 principal diagnosis in MDC 11..................................
MS-DRG 983--Cases reporting procedure code 0DTN0ZZ and a                       5            3.60          12,351
 principal diagnosis in MDC 11..................................
----------------------------------------------------------------------------------------------------------------
    Our clinical advisors examined the MS-DRGs within MDC 11 and
determined that the cases reporting procedure code 0DTN0ZZ with a
principal diagnosis in MDC 11 would most suitably group to MS-DRGs 673,
674, and 675, which contain procedures performed on structures other
than kidney and urinary tract anatomy. We note that the claims data
describing the average length of stay and average costs for cases in
these MS-DRGs are included in a table earlier in this section. Because
vesicointestinal fistulas involve both the bladder and the bowel, some
procedures in both MDC 6 (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 N321). Our clinical advisors
observed that procedure code 0DTN0ZZ is the second most common
procedure reported in conjunction with a principal diagnosis of code
N321, after ICD-10-PCS procedure code 0TQB0ZZ (Repair bladder, open
approach), which is assigned to both MDC 6 and MDC 11. Our clinical
advisors reviewed the data and noted that the average length of stay
and average costs for this subset of cases are generally higher for
this subset of cases than for cases in MS-DRGs 673, 674, and 675.
However, our clinical advisors believe that when ICD-10-PCS procedure
code 0DTN0ZZ is reported with a principal diagnosis in MDC 11
(typically vesicointestinal fistula), the procedure is related to the
principal diagnosis. Therefore, we are proposing to add ICD-10-PCS
procedure code 0DTN0ZZ to MDC 11. Under our proposal, cases reporting
procedure code 0DTN0ZZ with a principal diagnosis of vesicointestinal
fistula (diagnosis code N321) in MDC 11 would group to MS-DRGs 673,
674, and 675.
b. Reassignment of Procedures Among MS-DRGs 981 Through 983 and 987
Through 989
    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. Generally, we
move only those procedures for which we have an adequate number of
discharges to analyze the data.
[[Page 19225]]
    Based on the results of our review of claims data in the September
2018 update of the FY 2018 MedPAR file, we are not proposing to change
the current structure of MS-DRGs 981 through 983 and MS-DRGs 987
through 989.
c. Proposed Additions for Diagnosis and Procedure Codes to MDCs
    Below we summarize the requests we received 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.
(1) Stage 3 Pressure Ulcers of the Hip
    We received a request to reassign cases for a stage 3 pressure
ulcer of the left hip when reported with procedures involving excision
of pelvic bone or transfer of hip muscle from MS-DRGs 981, 982, and 983
(Extensive O.R. Procedure Unrelated to Principal Diagnosis with MCC,
with CC, and without CC/MCC, respectively) to MS-DRG 579 (Other Skin,
Subcutaneous Tissue and Breast Procedures with MCC) in MDC 9. ICD-10-CM
diagnosis code L89.223 (Pressure ulcer left hip, stage 3) is used to
report this condition and is currently assigned to MDC 9 (Diseases and
Disorders of the Skin, Subcutaneous Tissue and Breast). We refer
readers to section II.12.a. of the preamble of this proposed rule,
where we address ICD-10-PCS procedure code 0QB30ZZ (Excision of left
pelvic bone, open approach), which was reviewed as part of our ongoing
analysis of the unrelated MS-DRGs and which we are proposing to add to
MS-DRGs 579, 580, and 581 in MDC 5. (While the requestor only referred
to base MS-DRG 579, we believe it is appropriate to assign the cases to
MS-DRGs 579, 580, and 581 by severity level.) ICD-10-PCS procedure
codes 0KXP0ZZ (Transfer left hip muscle, open approach) and 0KXN0ZZ
(Transfer right hip muscle, open approach) may be reported to describe
transfer of hip muscle procedures and are currently assigned to MDC 1
(Diseases and Disorders of the Nervous System) and MDC 8 (Diseases and
Disorders of the Musculoskeletal System and Connective Tissue). We
included ICD-10-PCS procedure code 0KXN0ZZ in our analysis because it
describes the identical procedure on the right side.
    Our analysis of this grouping issue confirmed that, when a stage 3
pressure ulcer of the left hip (ICD-10-CM diagnosis code L89.223) is
reported as a principal diagnosis with ICD-10-PCS procedure code
0KXP0ZZ or 0KXN0ZZ, these cases group to MS-DRGs 981, 982, and 983. The
reason for this grouping is because whenever there is a surgical
procedure reported on a 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.'' In the example provided, because ICD-10-CM
diagnosis code L89.223 describing a stage 3 pressure ulcer of left hip
is classified to MDC 9 and because ICD-10-PCS procedure codes 0KXP0ZZ
and 0KXN0ZZ are classified to MDC 1 (Diseases and Disorders of the
Nervous System) in MS-DRGs 040, 041, and 042 (Peripheral, Cranial Nerve
and Other Nervous System Procedures with MCC, with CC or Peripheral
Neurostimulator, and without CC/MCC, respectively) and MDC 8 (Diseases
and Disorders of the Musculoskeletal System and Connective Tissue) in
MS-DRGs 500, 501, and 502 (Soft Tissue Procedures with MCC, with CC,
and without CC/MCC, respectively), the GROUPER logic assigns this case
to the ``unrelated operating room procedures'' set of MS-DRGs.
    For our review of this grouping issue and the request to have
procedure code 0KXP0ZZ added to MDC 9, we examined claims data for
cases reporting procedure code 0KXP0ZZ or 0KXN0ZZ in conjunction with a
diagnosis code that typically groups to MDC 9. Our findings are shown
in the table below.
            MS-DRGs 981 Through 983: Cases With Hip Muscle Transfer and Principal Diagnosis in MDC 9
----------------------------------------------------------------------------------------------------------------
                                                                     Number of    Average length
                             MS-DRG                                    cases          of stay      Average costs
----------------------------------------------------------------------------------------------------------------
MS-DRG 981--Cases with procedure code 0KXP0ZZ or 0KXN0ZZ and                  72            12.6         $25,023
 principal diagnosis in MDC 9...................................
MS-DRG 982--Cases with procedure code 0KXP0ZZ or 0KXN0ZZ and                 130            10.5          17,955
 principal diagnosis in MDC 9...................................
MS-DRG 983--Cases with procedure code 0KXP0ZZ or 0KXN0ZZ and                  16             6.5          13,196
 principal diagnosis in MDC 9...................................
----------------------------------------------------------------------------------------------------------------
    As indicated earlier, the requestor suggested that we move ICD-10-
PCS procedure code 0KXP0ZZ to MS-DRG 579. However, our clinical
advisors believe that, within MDC 9, these procedure codes are more
clinically aligned with the procedure codes assigned to MS-DRGs 573,
574, and 575 (Skin Graft for Skin Ulcer or Cellulitis with MCC, with CC
and without CC/MCC, respectively), which are more specific to the care
of stage 3, 4 and unstageable pressure ulcers than MS-DRGs 579, 580,
and 581. Therefore, we examined claims data to identify the average
length of stay and average costs for cases assigned to MS-DRGs 573,
574, and 575. Our findings are shown in the table below.
----------------------------------------------------------------------------------------------------------------
                                                                     Number of    Average length
                             MS-DRG                                    cases          of stay      Average costs
----------------------------------------------------------------------------------------------------------------
MS-DRG 573......................................................             548            15.4         $34,549
MS-DRG 574......................................................           1,254             9.8          21,251
MS-DRG 575......................................................             238             5.4          12,006
----------------------------------------------------------------------------------------------------------------
    We note that the average costs for cases in MS-DRGs 573 and 574 are
higher than the average costs of the subset of cases with the same
severity reporting a hip muscle transfer and a principal diagnosis in
MDC 9, while the average costs of those cases in MS-DRG 575 are similar
to the average costs of those cases that are currently grouping
[[Page 19226]]
to MS-DRG 983. However, our clinical advisors believe that the cases of
hip muscle transfer represent a distinct, recognizable clinical group
similar to those cases in MS-DRGs 573, 574, and 575, and that the
procedures are clearly related to the principal diagnosis codes.
Therefore, they believe that it is clinically appropriate for the
procedures to group to the same MS-DRGs as the principal diagnoses.
Therefore, we are proposing to add ICD-10-PCS procedure codes 0KXP0ZZ
and 0KXN0ZZ to MDC 9. Under our proposal, cases reporting ICD-10-PCS
procedure code 0KXP0ZZ or 0KXN0ZZ with a principal diagnosis in MDC 9
would group to MS-DRGs 573, 574, and 575.
(2) Gastrointestinal Stromal Tumor
    We received a request to reassign cases for gastrointestinal
stromal tumor of the stomach when reported with a procedure describing
laparoscopic bypass of the stomach to jejunum from MS-DRGs 981, 982,
and 983 to MS-DRGs 326, 327, and 328 (Stomach, Esophageal and Duodenal
Procedures with MCC, with CC, and without CC/MCC, respectively) by
adding ICD-10-PCS procedure code 0D164ZA (Bypass stomach to jejunum,
percutaneous endoscopic approach) to MDC 6. ICD-10-CM diagnosis code
C49.A2 (Gastrointestinal stromal tumor of stomach) is used to report
this condition and is currently assigned to MDC 8. ICD-10-PCS procedure
code 0D164ZA is used to report the stomach bypass procedure and is
currently assigned to MDC 5 (Diseases and Disorders of the Circulatory
System), MDC 6 (Diseases and Disorders of the Digestive System), MDC 7
(Diseases and Disorders of the Hepatobiliary System and Pancreas), MDC
10 (Endocrine, Nutritional and Metabolic Diseases and Disorders), and
MDC 17 (Myeloproliferative Diseases and Disorders, Poorly
Differentiated Neoplasms). We refer readers to section II.12.a. of the
preamble of this proposed rule where we discuss our proposal to move
the listed diagnosis codes describing gastrointestinal stromal tumors,
including ICD-10-CM diagnosis code C49.A2, into MDC 6. Therefore, this
proposal, if finalized, would address the cases grouping to MS-DRGs 981
through 983 by instead moving the diagnosis codes to MDC 6, which would
result in the diagnosis code and the procedure code referenced by the
requestor grouping to the same MDC.
(3) Finger Cellulitis
    We received a request to reassign cases for cellulitis of the right
finger when reported with a procedure describing open excision of the
right finger phalanx from MS-DRGs 981, 982, and 983 to MS-DRGs 579,
580, and 581 (Other Skin, Subcutaneous Tissue and Breast Procedures
with MCC, with CC, and without CC/MCC, respectively). Currently, ICD-
10-CM diagnosis code L03.011 (Cellulitis of right finger) is used to
report this condition and is currently assigned to MDC 09 in MS-DRGs
573, 574, and 575 (Skin Graft for Skin Ulcer or Cellulitis with MCC,
CC, and without CC/MCC, respectively), 576, 577, and 578 (Skin Graft
except for Skin Ulcer or Cellulitis with MCC, CC, and without CC/MCC,
respectively), and 602 and 603 (Cellulitis with MCC and without MCC,
respectively). ICD-10-PCS procedure code 0PBT0ZZ (Excision of right
finger phalanx, open approach) is used to identify the excision
procedure, and is currently assigned to MDC 03 (Diseases and Disorders
of the Ear, Nose, Mouth and Throat) in MS-DRGs 133 and 134 (Other Ear,
Nose, Mouth and Throat O.R. Procedures with CC/MCC, and without CC/MCC,
respectively); MDC 08 (Diseases and Disorders of the Musculoskeletal
System and Connective Tissue) in MS-DRGs 515, 516, and 517 (Other
Musculoskeletal System and Connective Tissue O.R. Procedures with MCC,
with CC, and without CC/MCC, respectively); MDC 10 (Endocrine,
Nutritional and Metabolic Diseases and Disorders) in MS-DRGs 628, 629,
and 630 (Other Endocrine, Nutritional and Metabolic O.R. Procedures
with MCC, with CC, and without CC/MCC, respectively); MDC 21 (Injuries,
Poisonings and Toxic Effects of Drugs) in MS-DRGs 907, 908, and 909
(Other O.R. Procedures for Injuries with MCC, with CC, and without CC/
MCC, respectively); and MDC 24 (Multiple Significant Trauma) in MS-DRGs
957, 958, and 959 (Other O.R. Procedures for Multiple Significant
Trauma with MCC, with CC, and without CC/MCC, respectively).
    Our analysis of this grouping issue confirmed that when a procedure
such as open excision of right finger phalanx (ICD-10-PCS procedure
code 0PBT0ZZ) is reported with a principal diagnosis from MDC 9, such
as cellulitis of the right finger (ICD-10-CM diagnosis code L03.011),
these cases group to MS-DRGs 981, 982, and 983. During our review of
this issue, we also examined claims data for similar procedures
describing excision of phalanges (which are listed in the table below)
and noted the same pattern. We further noted that the ICD-10-PCS
procedure codes describing excision of phalanx procedures with the
diagnostic qualifier ``X'', which are used to report these procedures
when performed for diagnostic purposes, are already assigned to MS-DRGs
579, 580, and 581 (to which the requestor suggested these cases group).
Our clinical advisors also believe that procedures describing resection
of phalanges should be assigned to the same MS-DRG as the excisions,
because the resection procedures would also group to MS-DRGs 981, 982,
and 983 when reported with a principal diagnosis from MDC 9.
------------------------------------------------------------------------
  ICD-10-PCS  procedure code                Code description
------------------------------------------------------------------------
0PBR0ZZ......................  Excision of right thumb phalanx, open
                                approach.
0PBR3ZZ......................  Excision of right thumb phalanx,
                                percutaneous approach.
0PBR4ZZ......................  Excision of right thumb phalanx,
                                percutaneous endoscopic approach.
0PBS0ZZ......................  Excision of left thumb phalanx, open
                                approach.
0PBS3ZZ......................  Excision of left thumb phalanx,
                                percutaneous approach.
0PBS4ZZ......................  Excision of left thumb phalanx,
                                percutaneous endoscopic approach.
0PBT0ZZ......................  Excision of right finger phalanx, open
                                approach.
0PBT3ZZ......................  Excision of right finger phalanx,
                                percutaneous approach.
0PBT4ZZ......................  Excision of right finger phalanx,
                                percutaneous endoscopic approach.
0PBV0ZZ......................  Excision of left finger phalanx, open
                                approach.
0PBV3ZZ......................  Excision of left finger phalanx,
                                percutaneous approach.
0PBV4ZZ......................  Excision of left finger phalanx,
                                percutaneous endoscopic approach.
0PTR0ZZ......................  Resection of right thumb phalanx, open
                                approach.
0PTS0ZZ......................  Resection of left thumb phalanx, open
                                approach.
0PTT0ZZ......................  Resection of right finger phalanx, open
                                approach.
0PTV0ZZ......................  Resection of left finger phalanx, open
                                approach.
0RTW0ZZ......................  Resection of right finger phalangeal
                                joint, open approach.
[[Page 19227]]

0RTX0ZZ......................  Resection of left finger phalangeal
                                joint, open approach.
------------------------------------------------------------------------
    As noted in the previous discussion, 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''.
    We examined the claims data for the three codes describing
cellulitis of the finger (ICD-10-CM diagnosis codes L03.011 (Cellulitis
of the right finger), L03.012 (Cellulitis of left finger), and L03.019
(Cellulitis of unspecified finger)) to identify the average length of
stay and average costs for cases reporting a principal diagnosis of
cellulitis of the finger in conjunction with the excision of phalanx
procedures listed in the table above. We note that there were no cases
reporting a principal diagnosis of cellulitis of the finger in
conjunction with the resection of phalanx procedures listed in the
table above.
----------------------------------------------------------------------------------------------------------------
                                                                     Number of    Average length
                             MS-DRG                                    cases          of stay      Average costs
----------------------------------------------------------------------------------------------------------------
MS-DRG 981--Cases with principal diagnosis of cellulitis of the                2             3.5          $7,934
 finger and excision of phalanx procedure.......................
MS-DRG 982--Cases with principal diagnosis of cellulitis of the               11             4.2           7,244
 finger and excision of phalanx procedure.......................
MS-DRG 983--Cases with principal diagnosis of cellulitis of the                4             4.8           8,058
 finger and excision of phalanx procedure.......................
----------------------------------------------------------------------------------------------------------------
    We also examined the claims data to identify the average length of
stay and average costs for all cases in MS-DRGs 579, 580, and 581. Our
findings are shown in the table in section II.12.A.3.of the preamble of
this proposed rule.
    While our clinical advisors noted that the average length of stay
and average costs for cases in MS-DRGs 579, 580, and 581 are generally
higher than the average length of stay and average costs for the subset
of cases reporting a principal diagnosis of cellulitis of the finger
and a procedure describing excision of phalanx, they believe that the
procedures are clearly related to the principal diagnosis codes and,
therefore, it is clinically appropriate for the procedures to group to
the same MS-DRGs as the principal diagnoses, particularly given that
procedures describing excision of phalanx with the diagnostic qualifier
``X'' are already assigned to these MS-DRGs. In addition, our clinical
advisors believe it is clinically appropriate for the procedures
describing resection of phalanx to be assigned to MS-DRGs 579, 580, and
581 as well. Therefore, we are proposing to add the procedure codes
describing excision and resection of phalanx listed above to MS-DRGs
579, 580, and 581. Under this proposal, cases reporting one of the
excision or resection procedures listed in the table above in
conjunction with a principal diagnosis from MDC 9 would group to MS-
DRGs 579, 580, and 581.
(4) Multiple Trauma With Internal Fixation of Joints
    We received a request to reassign cases involving multiple
significant trauma with internal fixation of joints from MS-DRGs 981,
982, and 983 to MS-DRGs 957, 958, and 959 (Other O.R. Procedures for
Multiple Significant Trauma with MCC, with CC, and without CC/MCC,
respectively). The requestor provided an example of several ICD-10-CM
diagnosis codes that together described multiple significant trauma in
conjunction with ICD-10-PCS procedure codes beginning with the prefix
``0SH'' and ``0RH'' that describe internal fixation of joints. The
requestor provided several suggestions to address this assignment,
including: Adding all ICD-10-PCS procedure codes in MDC 8 (Diseases and
Disorders of the Musculoskeletal System and Connective Tissue) with the
exception of codes that group to MS-DRG 956 (Limb Reattachment, Hip and
Femur Procedures for Multiple Significant Trauma) to MS-DRGs 957, 958,
and 959; adding codes within the ``0SH'' and ``0RH'' code ranges to MDC
24; and adding ICD-10-PCS procedure codes from all MDCs except those
that currently group to MS-DRG 955 (Craniotomy for Multiple Significant
Trauma) or MS-DRG 956 (Limb Reattachment, Hip and Femur Procedures for
Multiple Significant Trauma) to MS-DRGs 957, 958, and 959.
    While we understand the requestor's concern about these multiple
significant trauma cases, we believe any potential reassignment of
these cases requires significant analysis. Similar to our analysis of
MDC 14 (initially discussed at 81 FR 56854), there are multiple logic
lists in MDC 24 that would need to be reviewed. For example, to satisfy
the logic for multiple significant trauma, the logic requires a
diagnosis code from the significant trauma principal diagnosis list and
two or more significant trauma diagnoses from different body sites. The
significant trauma logic lists for the other body sites (which include
head, chest, abdominal, kidney, urinary system, pelvis or spine, upper
limb, and lower limb) allow the extensive list of diagnosis codes
included in the logic to be reported as a principal or secondary
diagnosis. The analysis of the reporting of all the codes as a
principal and/or secondary diagnosis within MDC 24, combined with the
analysis of all of the ICD-10-PCS procedure codes within MDC 8, is
anticipated to be a multi-year effort. Therefore, we plan to consider
this issue for future rulemaking as part of our ongoing analysis of the
unrelated procedure MS-DRGs.
(5) Totally Implantable Vascular Access Devices
    We received a request to reassign cases for insertion of totally
implantable vascular access devices (TIVADs) listed in the table below
when reported with principal diagnoses in MDCs other than MDC 9
(Diseases and Disorders of the Skin, Subcutaneous Tissue and Breast)
and MDC 11 (Diseases and Disorders of the Kidney and Urinary Tract)
from MS-DRGs 981 through 983 to a surgical MS-DRG within the
appropriate MDC based on the principal diagnosis. The requestor noted
that the insertion of
[[Page 19228]]
TIVAD procedures are newly designated as O.R. procedures, effective
October 1, 2018, and are assigned to MDCs 9 and 11. The requestor
stated that TIVADs can be placed for a variety of purposes and are used
to treat a wide range of malignancies at various sites and, therefore,
would likely have a relationship to the principal diagnosis within any
MDC. The requestor suggested that procedures describing the insertion
of TIVADs group to surgical MS-DRGs within every MDC (other than MDCs
2, 20, and 22, which do not contain surgical MS-DRGs). The requestor
further stated that the surgical hierarchy should assign more
significant O.R. procedures within each MDC to a higher position than
procedures describing the insertion of TIVADs because these procedures
consume less O.R. resources than more invasive procedures.
------------------------------------------------------------------------
       ICD-PCS code                       Code description
------------------------------------------------------------------------
0JH60WZ...................  Insertion of totally implantable vascular
                             access device into chest subcutaneous
                             tissue and fascia, open approach.
0JH80WZ...................  Insertion of totally implantable vascular
                             access device into abdomen subcutaneous
                             tissue and fascia, open approach.
0JHD0WZ...................  Insertion of totally implantable vascular
                             access device into right upper arm
                             subcutaneous tissue and fascia, open
                             approach.
0JHF0WZ...................  Insertion of totally implantable vascular
                             access device into left upper arm
                             subcutaneous tissue and fascia, open
                             approach.
0JHG0WZ...................  Insertion of totally implantable vascular
                             access device into right lower arm
                             subcutaneous tissue and fascia, open
                             approach.
0JHH0WZ...................  Insertion of totally implantable vascular
                             access device into left lower arm
                             subcutaneous tissue and fascia, open
                             approach.
0JHL0WZ...................  Insertion of totally implantable vascular
                             access device into right upper leg
                             subcutaneous tissue and fascia, open
                             approach.
0JHM0WZ...................  Insertion of totally implantable vascular
                             access device into left upper leg
                             subcutaneous tissue and fascia, open
                             approach.
0JHN0WZ...................  Insertion of totally implantable vascular
                             access device into right lower leg
                             subcutaneous tissue and fascia, open
                             approach.
0JHP0WZ...................  Insertion of totally implantable vascular
                             access device into left lower leg
                             subcutaneous tissue and fascia, open
                             approach.
------------------------------------------------------------------------
    While we agree that TIVAD procedures may be performed in connection
with a variety of principal diagnoses, we note that because these
procedures are newly designated as O.R. procedures effective October 1,
2018, we do not yet have sufficient data to analyze this request. We
plan to consider this issue in future rulemaking as part of our ongoing
analysis of the unrelated procedure MS-DRGs.
(6) Gastric Band Procedure Complications or Infections
    We received a request to reassign cases for infection or
complications due to gastric band procedures when reported with a
procedure describing revision of or removal of extraluminal device in/
from the stomach from MS-DRGs 987, 988, and 989 (Non-Extensive O.R.
Procedure Unrelated to Principal Diagnosis with MCC, with CC and
without MCC/CC, respectively) to MS-DRGs 326, 327, and 328 (Stomach,
Esophageal, and Duodenal Procedures with MCC, with CC, and without CC/
MCC, respectively). ICD-10-CM diagnosis codes K95.01 (Infection due to
gastric band procedure) and K95.09 (Other complications of gastric band
procedure) are used to report these conditions and are currently
assigned to MDC 6 (Diseases and Disorders of the Digestive System).
ICD-10-PCS procedure codes 0DW64CZ (Revision of extraluminal device in
stomach, percutaneous endoscopic approach) and 0DP64CZ (Removal of
extraluminal device from stomach, percutaneous endoscopic approach) are
used to report the revision of, or removal of, an extraluminal device
in/from the stomach and are currently assigned to MDC 10 (Endocrine,
Nutritional and Metabolic Diseases and Disorders) in MS-DRGs 619, 620,
and 621 (O.R. Procedures for Obesity with MCC with CC, and without CC/
MCC, respectively).
    Our analysis of this grouping issue confirmed that when procedures
describing the revision of or removal of an extraluminal device in/from
the stomach are reported with principal diagnoses in MDC 6 (such as
ICD-10-CM diagnosis codes K95.01 and K95.09), in the absence of a
procedure assigned to MDC 6, these cases group to MS-DRGs 987, 988, and
989. As noted in the previous discussion, 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''.
    We examined the claims data to identify cases involving ICD-10-PCS
procedure codes 0DW64CZ and 0DP64CZ reported with a principal diagnosis
of K95.01 or K95.09 that are currently grouping to MS-DRGs 987, 988,
and 989. Our findings are shown in the table below.
----------------------------------------------------------------------------------------------------------------
                                                                     Number of    Average length
                             MS-DRG                                    cases          of stay      Average costs
----------------------------------------------------------------------------------------------------------------
MS-DRG 987--All cases...........................................           8,674              11         $23,885
MS-DRG 987--Cases reporting procedure code 0DW64CZ or 0DP64CZ                 20             6.6          17,873
 and principal diagnosis code K95.01 or K95.09..................
MS-DRG 988--All cases...........................................           8,391             5.7          12,294
MS-DRG 988--Cases reporting procedure code 0DW64CZ or 0DP64CZ                105             2.2           7,253
 and principal diagnosis code K95.01 or K95.09..................
MS-DRG 989--All cases...........................................           1,551             3.1           8,171
MS-DRG 989--Cases reporting procedure code 0DW64CZ or 0DP64CZ                120             1.6           6,010
 and principal diagnosis code K95.01 or K95.09..................
----------------------------------------------------------------------------------------------------------------
    We also examined the data for cases in MS-DRGs 326, 327, and 328,
and our findings are provided in a table presented in section II.12.a.
of the preamble of this proposed rule. While our clinical advisors
noted that the average length of stay and average costs of cases in MS-
DRGs 326, 327, and 328 are significantly higher than the average length
of stay and average costs for the subset of cases reporting procedure
code 0DW64CZ or 0DP64CZ and a principal diagnosis code of K95.01 or
K95.09, they believe that the procedures are clearly related to the
principal diagnosis and, therefore, it is clinically appropriate for
the procedures to group to the same MS-DRGs as the principal
[[Page 19229]]
diagnoses. In addition, our clinical advisors believe that because
these procedures are intended to treat a complication of a procedure
related to obesity, rather than the obesity itself, they are more
appropriately assigned to stomach, esophageal, and duodenal procedures
(MS-DRGs 326, 327, and 328) in MDC 6 than to procedures for obesity
(MS-DRGs 619, 620, and 621) in MDC 10.
    Therefore, we are proposing to add ICD-10-PCS procedure codes
0DW64CZ and 0DP64CZ to MDC 6 in MS-DRGs 326, 327, and 328. Under this
proposal, cases reporting procedure code 0DW64CZ or 0DP64CZ in
conjunction with a principal diagnosis code of K95.01 or K95.09 would
group to MS-DRGs 326, 327, and 328.
(7) Peritoneal Dialysis Catheters
    We received a request to reassign cases for complications of
peritoneal dialysis catheters when reported with procedure codes
describing removal, revision, and/or insertion of new peritoneal
dialysis catheters from MS-DRGs 981 through 983 to MS-DRGs 356, 357,
and 358 (Other Digestive System O.R. Procedures with MCC, with CC, and
without CC/MCC, respectively) in MDC 6 by adding the diagnosis codes
describing complications of peritoneal dialysis catheters to MDC 6. We
refer readers to section II.12.a. of the preamble of this proposed rule
in which we describe our analysis of this issue as part of our broader
review of the unrelated MS-DRGs. Our clinical advisors believe it is
more appropriate to add the procedure codes describing removal,
revision, and/or insertion of new peritoneal dialysis catheters to MS-
DRGs 907, 908, and 909 than to move the diagnosis codes describing
complications of peritoneal dialysis catheters to MDC 6 because the
diagnosis codes describe complications, rather than initial placement,
of peritoneal dialysis catheters, and therefore, are most clinically
aligned with the diagnosis codes assigned to MDC 21 (where they are
currently assigned). In section II.12.a. of the preamble of this
proposed rule, we are proposing to add procedures describing removal,
revision, and/or insertion of peritoneal dialysis catheters to MS-DRGs
907, 908, and 909 in MDC 21.
(8) Occlusion of Left Renal Vein
    We received a request to reassign cases for varicose veins in the
pelvic region when reported with an embolization procedure from MS-DRGs
981, 982 and 983 (Non-Extensive O.R. Procedure Unrelated to Principal
Diagnosis with MCC, with CC, and without CC/MCC, respectively) to MS-
DRGs 715 and 716 (Other Male Reproductive System O.R. Procedures for
Malignancy with CC/MCC and without CC/MCC, respectively) and MS-DRGs
717 and 718 (Other Male Reproductive System O.R. Procedures Except
Malignancy with CC/MCC and without CC/MCC, respectively) in MDC 12
(Diseases and Disorders of the Male Reproductive System) and to MS-DRGs
749 and 750 (Other Female Reproductive System O.R. Procedures with CC/
MCC and without CC/MCC, respectively) in MDC 13 (Diseases and Disorders
of the Female Reproductive System). ICD-10-CM diagnosis code I86.2
(Pelvic varices) is reported to identify the condition of varicose
veins in the pelvic region and is currently assigned to MDC 12 and to
MDC 13. ICD-10-PCS procedure code 06LB3DZ (Occlusion of left renal vein
with intraluminal device, percutaneous approach) may be reported to
describe an embolization procedure performed for the treatment of
pelvic varices and is currently assigned to MDC 5 (Diseases and
Disorders of the Circulatory System) in MS-DRGs 270, 271, and 272
(Other Major Cardiovascular Procedures with MCC, with CC, and without
CC/MCC, respectively), MDC 6 (Diseases and Disorders of the Digestive
System) in MS-DRGs 356, 357, and 358 (Other Digestive System O.R.
Procedures with MCC, with CC, and without CC/MCC, respectively), MDC 21
(Injuries, Poisonings and Toxic Effects of Drugs) in MS-DRGs 907, 908,
and 909 (Other O.R. Procedures for Injuries with MCC, CC, without CC/
MCC, respectively), and MDC 24 (Multiple Significant Trauma) in MS-DRGs
957, 958, 959 (Other O.R. Procedures for Multiple Significant Trauma
with MCC, with CC, and without CC/MCC, respectively). The requestor
also noted that when this procedure is performed on the right renal
vein (which is reported with ICD-10-PCS code 06L03DZ (Occlusion of
inferior vena cava with intraluminal device, percutaneous approach) for
varicose veins in the pelvic region, the case groups to MS-DRGs 715 and
716 and MS-DRGs 717 and 718 in MDC 12 (for male patients) or MS-DRGs
749 and 750 in MDC 13 (for female patients).
    Our analysis of this grouping issue confirmed that when ICD-10-CM
diagnosis code I86.2 (Pelvic varices) is reported with ICD-10-PCS
procedure code 06LB3DZ, the case groups to MS-DRGs 981, 982, and 983.
As noted above in previous discussions, 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.''
    We examined the claims data to identify cases involving procedure
code 06LB3DZ in MS-DRGs 981, 982, and 983 reported with a principal
diagnosis code of I86.2. We found no cases in the claims data.
    In the absence of data to examine, our clinical advisors reviewed
this request and agree with the requestor that when the embolization
procedure is performed on the left renal vein (reported with ICD-10-PCS
procedure code 06LB3DZ), it should group to the same MS-DRGs as when it
is performed on the right renal vein. Therefore, we are proposing to
add ICD-10-PCS procedure code 06LB3DZ to MDC 12 in MS-DRGs 715, 716,
717, and 718 and to MDC 13 in MS-DRGs 749 and 750. Under this proposal,
cases reporting ICD-10-CM diagnosis code I86.2 with ICD-10-PCS
procedure code 06LB3DZ would group to MDC 12 (for male patients) or MDC
13 (for female patients).
13. Operating Room (O.R.) and Non-O.R. Issues
a. Background
    Under the IPPS MS-DRGs (and former CMS MS-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 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
[[Page 19230]]
(``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, our clinical advisors
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.F.15. of the preamble of this proposed rule, we
are making Table 6B.--New Procedure Codes--FY 2020 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 36 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.
    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 multi-year
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. Therefore, we are again soliciting public
comments 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. Commenters should
submit their recommendations to the following email address:
[email protected] by November 1, 2019.
    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 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.
    We will provide more detail on this analysis and the methodology
for conducting this review in future rulemaking. As we continue to
develop our process and methodology, as noted above, we are soliciting
public comments on other factors to consider in our refinement efforts
to recognize and differentiate consumption of resources for the ICD-10
MS-DRGs.
    In this proposed rule, we are addressing requests that we received
regarding changing the designation of specific ICD-10-PCS procedure
codes from non-O.R. to O.R. procedures, or changing the designation
from O.R. procedure to non-O.R. procedure. Below we discuss the process
that was utilized for evaluating the requests that were received for FY
2020 consideration. For each procedure, our clinical advisors
considered:
     Whether the procedure would typically require the
resources of an operating room;
     Whether it is an extensive or a nonextensive procedure;
and
     To which MS-DRGs the procedure should be assigned.
    We note that many MS-DRGs require the presence of any O.R.
procedure. As a result, cases with a principal diagnosis associated
with a particular MS-DRG would, by default, be grouped to that MS-DRG.
Therefore, we do not list these MS-DRGs in our discussion below.
Instead, we only discuss MS-DRGs that require explicitly adding the
relevant procedures codes to the GROUPER logic in order for those
procedure codes to affect the MS-DRG assignment as intended. In cases
where we are proposing to change the designation of procedure codes
from non-O.R. procedures to O.R. procedures, we also are proposing one
or more MS-DRGs with which these procedures are clinically aligned and
to which the procedure code would be assigned.
    In addition, cases that contain O.R. procedures will map to MS-DRG
981, 982, or 983 (Extensive O.R. Procedure Unrelated to Principal
Diagnosis with MCC, with CC, and without CC/MCC, respectively) or MS-
DRG 987, 988, or 989 (Non-Extensive O.R. Procedure Unrelated to
Principal Diagnosis with MCC, with CC, and without CC/MCC,
respectively) when they do not contain a principal diagnosis that
corresponds to one of the MDCs to which that procedure is assigned.
These procedures need not be assigned to MS-DRGs 981 through 989 in
order for this to occur. Therefore, if requestors included some or all
of MS-DRGs 981 through 989 in their request or included MS-DRGs that
require the presence of any O.R. procedure, we did not specifically
address that aspect in summarizing their request or our response to the
request in the section below.
    For procedures that would not typically require the resources of an
operating room, our clinical advisors
[[Page 19231]]
determined if the procedure should affect the MS-DRG assignment.
    We received several requests to change the designation of specific
ICD-10-PCS procedure codes from non-O.R. procedures to O.R. procedures,
or to change the designation from O.R. procedures to non-O.R.
procedures. Below we detail and respond to some of those requests. With
regard to the remaining requests, our clinical advisors believe it is
appropriate to consider these requests as part of our comprehensive
review of the procedure codes discussed above.
b. O.R. Procedures to Non-O.R. Procedures
(1) Bronchoalveolar Lavage
    Bronchoalveolar lavage (BAL) is a diagnostic procedure in which a
bronchoscope is passed through the patient's mouth or nose into the
lungs. A small amount of fluid is squirted into an area of the lung and
then collected for examination. Two requestors identified 13 ICD-10-PCS
procedure codes describing BAL procedures that generally can be
performed at bedside and would not require the resources of an
operating room. In the ICD-10 MS-DRG Version 36 Definitions Manual,
these 13 ICD-10-PCS procedure codes are currently recognized as O.R.
procedures for purposes of MS-DRG assignment.
    We agree with the requestors that these procedures do not typically
require the resources of an operating room. Therefore, we are proposing
to remove the following 13 procedure codes from the FY 2020 ICD-10 MS-
DRGs Version 37 Definitions Manual in Appendix E--Operating Room
Procedures and Procedure Code/MS-DRG Index as O.R. procedures. Under
this proposal, these procedures would no longer impact MS-DRG
assignment.
------------------------------------------------------------------------
      ICD-10-PCS code                     Code description
------------------------------------------------------------------------
0B9H8ZX...................  Drainage of lung lingula, via natural or
                             artificial opening endoscopic, diagnostic.
0B9K8ZX...................  Drainage of right lung, via natural or
                             artificial opening endoscopic, diagnostic.
0B9L8ZX...................  Drainage of left lung, via natural or
                             artificial opening endoscopic, diagnostic.
0B9M8ZX...................  Drainage of bilateral lungs, via natural or
                             artificial opening endoscopic, diagnostic.
0B9C8ZZ...................  Drainage of right upper lung lobe, via
                             natural or artificial opening endoscopic.
0B9D8ZZ...................  Drainage of right middle lung lobe, via
                             natural or artificial opening endoscopic.
0B9F8ZZ...................  Drainage of right lower lung lobe, via
                             natural or artificial opening endoscopic.
0B9G8ZZ...................  Drainage of left upper lung lobe, via
                             natural or artificial opening endoscopic.
0B9H8ZZ...................  Drainage of Lung Lingula, via natural or
                             artificial opening endoscopic.
0B9J8ZZ...................  Drainage of left lower lung lobe, via
                             natural or artificial opening endoscopic.
0B9K8ZZ...................  Drainage of right lung, via natural or
                             artificial opening endoscopic.
0B9L8ZZ...................  Drainage of left lung, via natural or
                             artificial opening endoscopic.
0B9M8ZZ...................  Drainage of bilateral lungs, via natural or
                             artificial opening endoscopic.
------------------------------------------------------------------------
(2) Percutaneous Drainage of Pelvic Cavity
    One requestor identified two ICD-10-PCS procedure codes that
describe procedures involving percutaneous drainage of the pelvic
cavity. The two ICD-10-PCS procedure codes are: 0W9J3ZX (Drainage of
pelvic cavity, percutaneous approach, diagnostic) and 0W9J3ZZ (Drainage
of pelvic cavity, percutaneous approach).
    ICD-10-PCS procedure code 0W9J3ZX is currently recognized as an
O.R. procedure for purposes of MS-DRG assignment, while the
nondiagnostic ICD-10-PCS procedure code 0W9J3ZZ is not recognized as an
O.R. procedure for purposes of MS-DRG assignment. The requestor stated
that percutaneous drainage procedures of the pelvic cavity for both
diagnostic and nondiagnostic purposes are not complex procedures and
both types of procedures are usually performed in a radiology suite.
The requestor stated that both procedures should be classified as non-
O.R. procedures.
    We agree with the requestor that these procedures do not typically
require the resources of an operating room. Therefore, we are proposing
to remove procedure code 0W9J3ZX from the FY 2020 ICD-10 MS-DRG Version
37 Definitions Manual in Appendix E--Operating Room Procedures and
Procedure Code/MS-DRG Index as an O.R. procedure. Under this proposal,
this procedure would no longer impact MS-DRG assignment.
(3) Percutaneous Removal of Drainage Device
    One requestor identified two ICD-10-PCS procedure codes that
describe procedures involving the percutaneous placement and removal of
drainage devices from the pancreas. These two ICD-10-PCS procedure
codes are: 0FPG30Z (Removal of drainage device from pancreas,
percutaneous approach) and 0F9G30Z (Drainage of pancreas with drainage
device, percutaneous approach). ICD-10-PCS procedure code 0FPG30Z is
currently recognized as an O.R. procedure for purposes of MS-DRG
assignment, while ICD-10-PCS procedure code 0F9G30Z is not recognized
as an O.R. procedure for purposes of MS-DRG assignment. The requestor
stated that percutaneous placement of drains is typically performed in
a radiology suite under image guidance and removal of a drain would not
be more resource intensive than its placement.
    We agree with the requestor that these procedures do not typically
require the resources of an operating room. Therefore, we are proposing
to remove ICD-10-PCS procedure code 0FPG30Z from the FY 2020 ICD-10 MS-
DRG Version 37 Definitions Manual in Appendix E--Operating Room
Procedures and Procedure Code/MS-DRG Index as an O.R. procedure. Under
this proposal, this procedure would no longer impact MS-DRG assignment.
c. Non-O.R. Procedures to O.R. Procedures
(1) Percutaneous Occlusion of Gastric Artery
    One requestor identified two ICD-10-PCS procedure codes that
describe percutaneous occlusion and restriction of the gastric artery
with intraluminal device, ICD-10-PCS procedure codes 04L23DZ (Occlusion
of gastric artery with intraluminal device, percutaneous approach) and
04V23DZ (Restriction of gastric artery with intraluminal device,
percutaneous approach), that the requestor stated are currently not
recognized as O.R. procedures for purposes of MS-DRG assignment. The
requestor noted that transcatheter endovascular embolization of the
gastric artery with intraluminal devices uses comparable resources to
transcatheter endovascular embolization of the gastroduodenal artery.
The requestor stated that ICD-10-PCS procedure codes 04L33DZ (Occlusion
of hepatic
[[Page 19232]]
artery with intraluminal device, percutaneous approach) and 04V33DZ
(Restriction of hepatic artery with intraluminal device, percutaneous
approach) are recognized as O.R. procedures for purposes of MS-DRG
assignment, and ICD-10-PCS procedure codes 04L23DZ and 04V23DZ should
therefore also be recognized as O.R. procedures for purposes of MS-DRG
assignment. We note that, contrary to the requestor's statement, ICD-
10-PCS procedure code 04V23DZ is already recognized as an O.R.
procedure for purposes of MS-DRG assignment.
    We agree with the requestor that ICD-10-PCS procedure code 04L23DZ
typically requires the resources of an operating room. Therefore, we
are proposing to add this code to the FY 2020 ICD-10 MS-DRG Version 37
Definitions Manual in Appendix E--Operating Room Procedures and
Procedure Code/MS-DRG Index as an O.R. procedure assigned to MS-DRGs
270, 271, and 272 (Other Major Cardiovascular Procedures with MCC, CC,
without CC/MCC, respectively) in MDC 05 (Diseases and Disorders of the
Circulatory System); MS-DRGs 356, 357, and 358 (Other Digestive System
O.R. Procedures, with MCC, CC, without CC/MCC, respectively) in MDC 06
(Diseases and Disorders of the Digestive System); MS-DRGs 907, 908, and
909 (Other O.R. Procedures for Injuries with MCC, CC, without CC/MCC,
respectively) in MDC 21 (Injuries, Poisonings and Toxic Effects of
Drugs); and MS-DRGs 957, 958, and 959 (Other O.R. Procedures for
Multiple Significant Trauma with MCC, CC, without CC/MCC, respectively)
in MDC 24 (Multiple Significant Trauma).
(2) Endoscopic Insertion of Endobronchial Valves
    In the FY 2019 IPPS/LTCH PPS final rule (83 FR 41257), we discussed
a comment we received in response to the FY 2019 IPPS/LTCH PPS proposed
rule regarding eight ICD-10-PCS procedure codes that describe
endobronchial valve procedures that the commenter believed should be
designated as O.R. procedures. The codes are identified in the
following table.
------------------------------------------------------------------------
      ICD-10-PCS code                     Code description
------------------------------------------------------------------------
0BH38GZ...................  Insertion of endobronchial valve into right
                             main bronchus, via natural or artificial
                             opening endoscopic.
0BH48GZ...................  Insertion of endobronchial valve into right
                             upper lobe bronchus, via natural or
                             artificial opening endoscopic.
0BH58GZ...................  Insertion of endobronchial valve into right
                             middle lobe bronchus, via natural or
                             artificial opening endoscopic.
0BH68GZ...................  Insertion of endobronchial valve into right
                             lower lobe bronchus, via natural or
                             artificial opening endoscopic.
0BH78GZ...................  Insertion of endobronchial valve into left
                             main bronchus, via natural or artificial
                             opening endoscopic.
0BH88GZ...................  Insertion of endobronchial valve into left
                             upper lobe bronchus, via natural or
                             artificial opening endoscopic.
0BH98GZ...................  Insertion of endobronchial valve into
                             lingula bronchus, via natural or artificial
                             opening endoscopic.
0BHB8GZ...................  Insertion of endobronchial valve into left
                             lower lobe bronchus, via natural or
                             artificial opening endoscopic.
------------------------------------------------------------------------
    The commenter stated that these procedures are most commonly
performed in the O.R., given the need for better monitoring and support
through the process of identifying and occluding a prolonged air leak
using endobronchial valve technology. The commenter also noted that
other endobronchial valve procedures have an O.R. designation. We noted
that, in the ICD-10 MS-DRGs Version 35, these eight ICD-10-PCS
procedure codes are not recognized as O.R. procedures for purposes of
MS-DRG assignment. The commenter requested that these eight procedure
codes be assigned to MS-DRG 163 (Major Chest Procedures with MCC) due
to similar cost and resource use. As discussed in the FY 2019 IPPS/LTCH
PPS final rule, our clinical advisors disagreed with the commenter that
the eight identified procedures typically require the use of an
operating room, and believed that these procedures would typically be
performed in an endoscopy suite. Therefore, we did not finalize a
change to the eight procedure codes describing endoscopic insertion of
an endobronchial valve listed in the table above for FY 2019 under the
ICD-10 MS-DRGs Version 36.
    After publication of the FY 2019 IPPS/LTCH PPS final rule, we
received feedback from several stakeholders expressing continued
concern with the designation of the eight ICD-10-PCS procedure codes
describing the endoscopic insertion of an endobronchial valve listed in
the table above, including requests to reconsider the designation of
these codes for FY 2020. Some requestors stated that while they
appreciated CMS' attention to the issue, they believed that important
clinical and financial factors had been overlooked. The requestors
noted that while the site of care is an important consideration for MS-
DRG assignment, there are other clinical factors such as case
complexity, patient health risk and the need for anesthesia that also
affect hospital resource consumption and should influence MS-DRG
assignment. With regard to complexity, the requestors stated that many
of these patients are high-risk, often recovering from major lung
surgery and have significantly compromised respiratory function.
According to one requestor, these patients may have major
comorbidities, such as cancer or emphysema contributing to longer
lengths of stay in the hospital. This requestor acknowledged that
procedures performed for the endoscopic insertion of an endobronchial
valve are often, but not always, performed in the O.R., however, the
requestor also noted this should not preclude the designation of these
procedures as O.R. procedures since there have been other examples of
reclassification requests where the combination of factors, such as
treatment difficulty, resource utilization, patient health status, and
anesthesia administration were considered in the decision to change the
designation for a procedure from non-O.R. to O.R. Another requestor
stated that CMS' current designation of a procedure involving the
endoscopic insertion of an endobronchial valve as a non-O.R. procedure
is not reflective of actual practice and this designation has payment
consequences that may affect access to the treatment for a vulnerable
patient population, with limited treatment options. The requestor
recommended that procedures involving the endoscopic insertion of an
endobronchial valve should be designated as O.R. procedures and
assigned to MS-DRGs 163, 164, and 165 (Major Chest Procedures with MCC,
with CC and without CC/MCC, respectively). In addition, a few of the
requestors also conducted their own analyses and indicated that if
procedures involving the endoscopic insertion of an endobronchial valve
were to be assigned to MS-DRGs 163, 164, and 165, the average costs of
the cases reporting a procedure code describing the endoscopic
insertion of an endobronchial valve would still be higher compared to
all the cases in the assigned MS-DRG.
    We examined claims data from the September 2018 update of the FY
2018 MedPAR file for MS-DRGs 163, 164 and
[[Page 19233]]
165 to identify cases reporting any one of the eight procedure codes
listed in the above table describing the endoscopic insertion of an
endobronchial valve. Cases reporting one of these procedure codes would
be assigned to MS-DRG 163, 164, or 165 if at least one other procedure
that is designated as an O.R. procedure and assigned to these MS-DRGs
was also reported on the claim. In addition, cases reporting a
procedure code describing the endoscopic insertion of an endobronchial
valve with a different surgical approach are assigned to MS-DRGs 163,
164, and 165. Our findings are shown in the following table.
         MS-DRGs for Major Chest Procedures With Endoscopic Insertion of Endobronchial Valve Procedures
----------------------------------------------------------------------------------------------------------------
                                                                     Number of    Average length
                             MS-DRG                                    cases          of stay      Average costs
----------------------------------------------------------------------------------------------------------------
MS-DRG 163--All cases...........................................          10,812            11.6         $33,433
MS-DRG 163--Cases reporting a procedure for the endoscopic                    49            21.1          53,641
 insertion of an endobronchial valve............................
MS-DRG 164--All cases...........................................          14,800             5.6          18,202
MS-DRG 164--Cases reporting a procedure for the endoscopic                    23              14          37,287
 insertion of an endobronchial valve............................
MS-DRG 165--All cases...........................................           7,907             3.3          13,408
MS-DRG 165--Cases reporting a procedure for the endoscopic                     3            18.3          39,249
 insertion of an endobronchial valve............................
----------------------------------------------------------------------------------------------------------------
    We found a total of 10,812 cases in MS-DRG 163 with an average
length of stay of 11.6 days and average costs of $33,433. Of those
10,812 cases, we found 49 cases reporting a procedure for the
endoscopic insertion of an endobronchial valve with an average length
of stay of 21.1 days and average costs of $53,641. For MS-DRG 164, we
found a total of 14,800 cases with an average length of stay of 5.6
days and average costs of $18,202. Of those 14,800 cases, we found 23
cases reporting a procedure for the endoscopic insertion of an
endobronchial valve with an average length of stay of 14 days and
average costs of $37,287. For MS-DRG 165, we found a total of 7,907
cases with an average length of stay of 3.3 days and average costs of
$13,408. Of those 7,907 cases, we found 3 cases reporting a procedure
for the endoscopic insertion of an endobronchial valve with an average
length of stay of 18.3 days and average costs of $39,249.
    We also examined claims data to identify any cases reporting any
one of the eight procedure codes listed in the table above describing
the endoscopic insertion of an endobronchial valve within MS-DRGs 166,
167, and 168 (Other Respiratory System O.R. Procedures with MCC, with
CC, and without CC/MCC, respectively). Cases reporting one of these
procedure codes would be assigned to MS-DRG 166, 167, or 168 if at
least one other procedure that is designated as an O.R. procedure and
assigned to these MS-DRGs was also reported on the claim. In addition,
MS-DRGs 166, 167, and 168 are the other surgical MS-DRGs where cases
reporting a respiratory diagnosis within MDC 4 would be assigned. Our
findings are shown in the following table.
      MS-DRGs for Other Respiratory System O.R. Procedures With Endoscopic Insertion of Endobronchial Valve
----------------------------------------------------------------------------------------------------------------
                                                                     Number of    Average length
                             MS-DRG                                    cases          of stay      Average costs
----------------------------------------------------------------------------------------------------------------
MS-DRG 166--All cases...........................................          16,050            10.6         $26,645
MS-DRG 166--Cases reporting a procedure for the endoscopic                    11            25.7          71,700
 insertion of an endobronchial valve............................
MS-DRG 167--All cases...........................................           8,165             5.3          13,687
MS-DRG 167--Cases reporting a procedure for the endoscopic                     4              10          28,847
 insertion of an endobronchial valve............................
MS-DRG 168--All cases...........................................           2,430             2.8           9,645
----------------------------------------------------------------------------------------------------------------
    We found a total of 16,050 cases in MS-DRG 166 with an average
length of stay of 10.6 days and average costs of $26,645. Of those
16,050 cases, we found 11 cases reporting a procedure for the
endoscopic insertion of an endobronchial valve with an average length
of stay of 25.7 days and average costs of $71,700. For MS-DRG 167, we
found a total of 8,165 cases with an average length of stay of 5.3 days
and average costs of $13,687. Of those 8,165 cases, we found 4 cases
reporting a procedure for the endoscopic insertion of an endobronchial
valve with an average length of stay of 10 days and average costs of
$28,847. For MS-DRG 168, we found a total of 2,430 cases with an
average length of stay of 2.8 days and average costs of $9,645. Of
those 2,430 cases, we did not find any cases reporting a procedure for
the endoscopic insertion of an endobronchial valve.
    The results of our data analysis indicate that cases reporting a
procedure for the endoscopic insertion of an endobronchial valve in MS-
DRGs 163, 164, 165, 166, and 167 have a longer length of stay and
higher average costs when compared to all the cases in their assigned
MS-DRG. Because the data are based on surgical MS-DRGs 163, 164, 165,
166 and 167, and the procedure codes for endoscopic insertion of an
endobronchial valve are currently designated as non-O.R. procedures,
there was at least one other O.R. procedure reported on the claim
resulting in case assignment to one of those MS-DRGs. Our clinical
advisors indicated that because there was another O.R. procedure
reported, the insertion of the endobronchial valve procedure may or may
not have been
[[Page 19234]]
the main determinant of resource use for those cases. Therefore, we
conducted further analysis to evaluate cases for which no other O.R.
procedure was performed with the endoscopic insertion of an
endobronchial valve and case assignment resulted in a medical MS-DRG.
Our findings are shown in the following table.
                        Medical MS-DRGs With Insertion of Endobronchial Valve Procedures
----------------------------------------------------------------------------------------------------------------
                                                                     Number of    Average length
                             MS-DRG                                    cases          of stay      Average costs
----------------------------------------------------------------------------------------------------------------
MS-DRG 069 (Transient Ischemia without Thrombolytic)............               1               9         $26,002
MS-DRG 177 (Respiratory Infections and Inflammations with MCC)..              11            19.5          33,877
MS-DRG 178 (Respiratory Infections and Inflammations with CC)...               4            10.8          20,109
MS-DRG 180 (Respiratory Neoplasms with MCC).....................               2            11.5          19,273
MS-DRG 181 (Respiratory Neoplasms with MCC).....................               1               3          12,641
MS-DRG 186 (Pleural Effusion with MCC)..........................               1               8          23,609
MS-DRG 187 (Pleural Effusion with CC)...........................               1              18          49,214
MS-DRG 189 (Pulmonary Edema and Respiratory Failure)............               2            13.5          65,431
MS-DRG 190 (Chronic Obstructive Pulmonary Disease with MCC).....               2               9          39,925
MS-DRG 191 (Chronic Obstructive Pulmonary Disease with CC)......               1              15          55,958
MS-DRG 192 (Chronic Obstructive Pulmonary Disease without CC/                  1               5          10,394
 MCC)...........................................................
MS-DRG 193 (Simple Pneumonia and Pleurisy with MCC).............               1              18          27,182
MS-DRG 197 (Interstitial Lung Disease with CC)..................               1              12          11,458
MS-DRG 199 (Pneumothorax with MCC)..............................              28            16.4          38,384
MS-DRG 200 (Pneumothorax with CC)...............................              11             8.3          20,764
MS-DRG 201 (Pneumothorax without CC/MCC)........................               2              10          20,243
MS-DRG 205 (Other Respiratory System Diagnoses with MCC)........               2             4.5          10,851
MS-DRG 207 (Respiratory System Diagnosis with Ventilation                      4              20          67,299
 Support >96 Hours or Peripheral Extracorporeal Membrane
 Oxygenation (ECMO))............................................
MS-DRG 208 (Respiratory System Diagnosis with Ventilation                      8            13.6          32,533
 Support [lE]96 Hours or Peripheral Extracorporeal Membrane
 Oxygenation (ECMO))............................................
MS-DRG 815 (Reticuloendothelial and Immunity Disorders with CC).               1               5          17,379
MS-DRG 871 (Septicemia or Severe Sepsis without Mechanical                     3              15          39,706
 Ventilation >96 Hours with MCC)................................
MS-DRG 919 (Complications of Treatment with MCC)................               2               5          36,143
MS-DRG 920 (Complications of Treatment with CC).................               1               5          14,923
                                                                 -----------------------------------------------
    Total.......................................................              91            13.7          33,377
----------------------------------------------------------------------------------------------------------------
    The data indicate that there is a wide variation in the average
length of stay and average costs for cases reporting a procedure for
the endoscopic insertion of an endobronchial valve, with volume
generally low across MS-DRGs. As shown in the table, for several of the
medical MS-DRGs, there was only one case reporting a procedure for the
endoscopic insertion of an endobronchial valve. The highest volume of
cases reporting a procedure for the endoscopic insertion of an
endobronchial valve was found in MS-DRG 199 (Pneumothorax with MCC)
with a total of 28 cases with an average length of stay of 16.4 days
and average costs of $38,384. The highest average costs and longest
average length of stay for cases reporting a procedure for the
endoscopic insertion of an endobronchial valve was $67,299 in MS-DRG
207 (Respiratory System Diagnosis with Ventilator Support >96 Hours or
Peripheral Extracorporeal Membrane Oxygenation (ECMO)) where 4 cases
were found with an average length of stay of 20 days. Overall, there
was a total of 91 cases reporting the insertion of an endobronchial
valve procedure with an average length of stay of 13.7 days and average
costs of $33,377 across the medical MS-DRGs.
    Our clinical advisors agree that the subset of patients who undergo
endoscopic insertion of an endobronchial procedure are complex and may
have multiple comorbidities such as severe underlying lung disease that
impact the hospital length of stay. They also believe that, as we begin
the process of refining how procedure codes may be classified under
ICD-10-PCS, including designation of a procedure as O.R. or non-O.R.,
we should take into consideration whether the procedure is driving
resource use for the admission. (We refer the reader to section
II.F.13.a. of the preamble of this proposed rule for the discussion of
our plans to conduct a comprehensive review of the ICD-10-PCS procedure
codes). Based on the claims data analysis, which show a wide variation
in average costs for cases reporting endoscopic insertion of an
endobronchial valve without an O.R. procedure, our clinical advisors
are not convinced that endoscopic insertion of an endobronchial valve
is a key contributing factor to the consumption of resources as
reflected in the data. They also believe, in review of the procedures
that are currently assigned to MS-DRGs 163, 164, 165, 166, 167, and
168, that further refinement of these MS-DRGs may be warranted. For
these reasons, at this time, our clinical advisors do not support
designating endoscopic insertion of an endobronchial valve as an O.R.
procedure, nor do they support assignment of these procedures to MS-
DRGs 163, 164, and 165 until additional analyses can be performed for
this subset of patients as part of the comprehensive procedure code
review.
    For the reasons described above, we are not proposing to change the
current non-O.R. designation of the eight ICD-10-PCS procedure codes
that describe endoscopic insertion of an endobronchial valve. However,
because we agree that endoscopic insertion of an endobronchial valve
procedures are performed on clinically complex patients, we believe it
may be appropriate to consider designating these procedures as non-O.R.
affecting specific MS-DRGs for FY 2020. Therefore, we are requesting
public comment on designating these procedure codes as non-O.R.
procedures affecting the MS-DRG assignment, including the specific MS-
DRGs that cases reporting the endoscopic insertion
[[Page 19235]]
of an endobronchial valve should affect for FY 2020. As noted, it is
not clear based on the claims data to what degree the endoscopic
insertion of an endobronchial valve is a contributing factor for the
consumption of resources for these clinically complex patients and
given the potential refinement that may be needed for MS-DRGs 163, 164,
165, 166, 167, and 168, we are soliciting comment on whether cases
reporting the endoscopic insertion of an endobronchial valve should
affect any of these MS-DRGs or other MS-DRGs.
14. Proposed Changes to the MS-DRG Diagnosis Codes for FY 2020
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 (non-CC, 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 an MCC, a CC, or a non-CC 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 this comprehensive analysis was completed for FY 2008,
we have evaluated diagnosis codes individually when receiving requests
to change the severity level of specific diagnosis codes. However,
given the transition to ICD-10-CM and the significant changes that have
occurred to diagnosis codes since this review, we believe it is
necessary to conduct a comprehensive analysis once again. We have
completed this analysis and we are discussing our findings in this
proposed rule. We used the same methodology utilized in FY 2008 to
conduct this analysis, as described below.
    For each secondary diagnosis, we measured the impact in resource
use for the following three subsets of patients:
    (1) Patients with no other secondary diagnosis or with all other
secondary diagnoses that are non-CCs.
    (2) Patients with at least one other secondary diagnosis that is a
CC but none that is an MCC.
    (3) Patients with at least one other secondary diagnosis that is an
MCC.
    Numerical resource impact values were assigned for each diagnosis
as follows:
------------------------------------------------------------------------
              Value                               Meaning
------------------------------------------------------------------------
0................................  Significantly below expected value
                                    for the non-CC subgroup.
1................................  Approximately equal to expected value
                                    for the non-CC subgroup.
2................................  Approximately equal to expected value
                                    for the CC subgroup.
3................................  Approximately equal to expected value
                                    for the MCC subgroup.
4................................  Significantly above the expected
                                    value for the MCC subgroup.
------------------------------------------------------------------------
    Each diagnosis for which Medicare data were available was evaluated
to determine its impact on resource use and to determine the most
appropriate CC subclass (non-CC, CC, or MCC) assignment. In order to
make this determination, the average cost for each subset of cases was
compared to the expected cost for cases in that subset. The following
format was used to evaluate each diagnosis:
--------------------------------------------------------------------------------------------------------------------------------------------------------

--------------------------------------------------------------------------------------------------------------------------------------------------------
               Code       Diagnosis                    Cnt1               C1                 Cnt2               C2                 Cnt3               C3
--------------------------------------------------------------------------------------------------------------------------------------------------------
    Count (Cnt) is the number of patients in each subset and C1, C2,
and C3 are a measure of the impact on resource use of patients in each
of the subsets. The C1, C2, and C3 values are a measure of the ratio of
average costs for patients with these conditions to the expected
average cost across all cases. The C1 value reflects a patient with no
other secondary diagnosis or with all other secondary diagnoses that
are non-CCs. The C2 value reflects a patient with at least one other
secondary diagnosis that is a CC but none that is a major CC. The C3
value reflects a patient with at least one other secondary diagnosis
that is a major CC. A value close to 1.0 in the C1 field would suggest
that the code produces the same expected value as a non-CC diagnosis.
That is, average costs for the case are similar to the expected average
costs for that subset and the diagnosis is not expected to increase
resource usage. A higher value in the C1 (or C2 and C3) field suggests
more resource usage is associated with the diagnosis and an increased
likelihood that it is more like a CC or major CC than a non-CC. Thus, a
value close to 2.0 suggests the condition is more like a CC than a non-
CC but not as significant in resource usage as an MCC. A value close to
3.0 suggests the condition is expected to consume resources more
similar to an MCC than a CC or non-CC. For example, a C1 value of 1.8
for a secondary diagnosis means that for the subset of patients who
have the secondary diagnosis and have either no other secondary
diagnosis present, or all the other secondary diagnoses present are
non-CCs, the impact on resource use of the secondary diagnoses is
greater than the expected value for a non-CC by an amount equal to 80
percent of the difference between the expected value of a CC and a non-
CC (that is, the impact on resource use of the secondary diagnosis is
closer to a CC than a non-CC).
    These mathematical constructs are used as guides in conjunction
with the judgment of our clinical advisors to classify each secondary
diagnosis reviewed as an MCC, a CC, or a non-CC. Our clinical advisors
reviewed the resource use impact reports and suggested modifications to
the initial CC subclass assignments when clinically appropriate.
c. Proposed Changes to Severity Levels
(1) Summary of Proposed Changes
    The diagnosis codes for which we are proposing a change in severity
level designation as a result of the analysis
[[Page 19236]]
described in this proposed rule are shown in Table 6P.1c. (which is
available via the internet on the CMS website at: http://www.cms.hhs.gov/Medicare/Medicare-Fee-for-Service-Payment/AcuteInpatientPPS/index.html). Using the method described above to
perform our comprehensive CC/MCC analysis, our clinical advisors
recommended a change in the severity level designation for 1,492 ICD-
10-CM diagnosis codes. As shown in Table 6P.1c. associated with this
proposed rule, the proposed changes to severity level resulting from
our comprehensive analysis would move some diagnosis codes to a higher
severity level designation and other diagnosis codes to a lower
severity level designation, as indicated in the two columns which
display CMS' FY 2019 classification in column C and the proposed
changes for FY 2020 in column D.
    The table below shows the Version 36 ICD-10 MS-DRG categorization
of diagnosis codes by severity level.
                   Current Categorization of CC Codes
                              [Version 36]
------------------------------------------------------------------------
                                                             Number of
                                                               codes
------------------------------------------------------------------------
MCC.....................................................           3,244
CC......................................................          14,528
Non-CC..................................................          54,160
                                                         ---------------
    Total...............................................          71,932
------------------------------------------------------------------------
    The following table compares the Version 36 ICD-10 MS-DRG CC list
and the proposed Version 37 ICD-10 MS-DRG CC list. There are 17,772
diagnosis codes on the Version 36 MCC/CC lists. The proposed MCC/CC
severity level changes would reduce the number of diagnosis codes on
the MCC/CC lists to 16,790 (3,099 + 13,691). Based on the Version 36
MCC/CC lists, 81.5 percent of cases have at least one MCC/CC present,
using claims data from the September 2018 update of the FY 2018 MedPAR
file. Based on the proposed Version 37 MCC/CC lists, the percent of
cases having at least one MCC/CC present would be reduced to 76.6
percent.
           Comparison of Current CC List and Proposed CC List
------------------------------------------------------------------------
                                            Current CC      Proposed CC
                                               List            List
------------------------------------------------------------------------
Codes designated as an MCC..............           3,244           3,099
Percent of cases with one or more MCCs..           41.0%           36.3%
Average charge of cases with one or more         $16,439         $16,490
 MCCs...................................
Codes designated as a CC................          14,528          13,691
Percent of cases with one or more CCs...           40.5%           40.3%
Average charge of cases with one or more         $10,332         $10,518
 CCs....................................
Codes designated as non-CC..............          54,160          55,142
Percent of cases with no CC.............           18.5%           23.4%
Average charge of cases with no CCs.....          $9,885         $10,166
------------------------------------------------------------------------
    Using the method described above to perform our comprehensive
analysis, we are proposing to modify the Version 36 CC subclass
assignments for 2.1 percent of the ICD-10-CM diagnosis codes, as
summarized in the table below.
                                                         Proposed MCC/CC Subclass Modifications
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                             Proposed        Proposed        Proposed
                                                            Version 36       Proposed                       version 37      version 37      Version 37
                                                          severity level    version 37                     change to MCC   change to CC   change to non-
               Severity level--CC subclass                   number of    severity level  Percent change     subclass,       subclass,     CC subclass,
                                                               codes         number of                       number of       number of       number of
                                                                               codes                           codes           codes           codes
--------------------------------------------------------------------------------------------------------------------------------------------------------
MCC.....................................................           3,244           3,099            -4.5             N/A             136              17
CC......................................................          14,528          13,691            -5.8               8             N/A           1,148
Non-CC..................................................          54,160          55,142             1.8               0             183             N/A
                                                         -----------------------------------------------------------------------------------------------
    Total...............................................          71,932          71,932             N/A               8             319           1,166
--------------------------------------------------------------------------------------------------------------------------------------------------------
    As a result of these proposed changes, of the 71,932 diagnosis
codes included in the analysis, the net result would be a decrease of
145 (3,244-3,099) codes designated as an MCC, a decrease of 837
(14,528-13,691) codes designated as a CC, and an increase of 982
(55,142-54,160) codes designated as a non-CC.
(2) Illustrations of Proposed Severity Level Changes
    As noted above, based on our comprehensive CC/MCC analysis as
described previously in this section, we are proposing changes in the
severity level designations for 1,492 ICD-10-CM diagnosis codes, and
the specific proposed changes to severity level designations for those
diagnosis codes are shown in Table 6P.1.c. associated with this
proposed rule (which is available via the internet on the CMS website
at: http://www.cms.hhs.gov/Medicare/Medicare-Fee-for-Service-Payment/AcuteInpatientPPS/index.html). Below we provide illustrative examples
of certain categories of codes for which we are proposing changes to
the severity level designations as a result of our comprehensive
analysis. As described above, these proposals are based on review of
the data as well as consideration of the clinical nature of each of the
secondary diagnoses and the severity level of clinically similar
diagnoses. The first set of codes, from the Neoplasms chapter,
encompasses more than half of all proposed severity level changes. The
additional examples are from a variety of body systems and conditions,
and they are illustrative of both proposed increases and proposed
decreases in severity level designation. We note that we are making
available a
[[Page 19237]]
supplementary file containing the data describing the impact on
resource use when reported as a secondary diagnosis for all 1,492 ICD-
10-CM diagnosis codes for which we are proposing a change in
designation via the internet on the CMS website at: http://www.cms.hhs.gov/Medicare/Medicare-Fee-for-Service-Payment/AcuteInpatientPPS/index.html.
(a) Neoplasms Chapter Codes
    Of the total number of ICD-10-CM diagnosis codes for which we are
proposing a change of severity level designation, 767 are from the
Neoplasms chapter of the ICD-10-CM classification (C00-D49) and are
currently designated as a CC. We note that the Neoplasms chapter
contains a total of 1,661 ICD-10-CM diagnosis codes. In Version 36 of
the MS-DRGs, none of the 1,661 neoplasm codes are designated as an MCC,
767 are designated as a CC, and 894 are designated as a non-CC. For all
767 codes currently designated as a CC, our clinical advisors
recommended changing the severity level designation from CC to non-CC.
The following table presents examples of some of the neoplasm codes for
which we are proposing a severity level change to non-CC, and their
impact on resource use when reported as a secondary diagnosis. As noted
previously, the data analysis for the remainder of these neoplasm codes
is included in the supplementary file that we are making available on
the CMS website.
                                        Proposed Severity Level Changes for Neoplasm Codes as Secondary Diagnosis
--------------------------------------------------------------------------------------------------------------------------------------------------------
     ICD-10-CM diagnosis code          Cnt1        C1        Cnt2        C2        Cnt3        C3       Current CC  subclass      Proposed CC  subclass
--------------------------------------------------------------------------------------------------------------------------------------------------------
C20 (Malignant neoplasm of rectum)      2,960     1.0485      7,561     2.2169      6,492     3.0790  CC......................  Non-CC.
C22.0 (Liver cell carcinoma)......      1,672     1.2289      9,444     2.0638     12,503     3.0914  CC......................  Non-CC.
C25.0 (Malignant neoplasm of head       1,205     1.1357      3,834     2.1788      6,191     3.0229  CC......................  Non-CC.
 of pancreas).
C64.1 (Malignant neoplasm of right      1,512     1.2276      4,463     2.1600      4,593     3.1158  CC......................  Non-CC.
 kidney, except renal pelvis).
C64.2 (Malignant neoplasm of left       1,368     1.3407      4,517     2.1947      4,593     3.0947  CC......................  Non-CC.
 kidney, except renal pelvis).
C78.01 (Secondary malignant             4,149     1.0417     14,946     2.0888     20,324     3.0043  CC......................  Non-CC.
 neoplasm of right lung).
C78.02 (Secondary malignant             3,599     1.0078     13,456     2.0853     18,384     3.0024  CC......................  Non-CC.
 neoplasm of left lung).
C79.31 (Secondary malignant             7,164     1.1895     22,989     2.1330     41,387     2.9116  CC......................  Non-CC.
 neoplasm of brain).
C79.51 (Secondary malignant            26,095     1.3048     88,022     2.2020     99,670     3.0449  CC......................  Non-CC.
 neoplasm of bone).
C90.00 (Multiple myeloma not            9,947     1.1588     34,155     2.2144     33,830     3.1281  CC......................  Non-CC.
 having achieved remission).
--------------------------------------------------------------------------------------------------------------------------------------------------------
    As described in section II.F.15.b. of the preamble of this proposed
rule, we examined the impact in resource use for three subsets of
patients in order to evaluate the severity level designations for each
secondary diagnosis. In the table above, the C1 values are generally
close to 1, C2 values are generally close to 2, and C3 values are
generally close to 3. As explained in section II.F.15.b. of the
preamble of this proposed rule, these values suggest that when a
neoplasm is reported as a secondary diagnosis, the resources involved
in caring for a patient with this condition are more aligned with a
non-CC severity level than a CC severity level. Our clinical advisors
reviewed these data and believe the resources involved in caring for a
patient with this condition are more aligned with a non-CC severity
level. Our clinical advisors noted that when a neoplasm is reported as
a secondary diagnosis, because it is not the condition that occasioned
the patient's admission to the hospital, it does not significantly
impact resource use. Our clinical advisors noted that if these patients
are admitted for treatment of the neoplasm, the neoplasm is the
principal diagnosis, and other complicating or comorbid conditions
reported as secondary diagnoses would determine the appropriate
severity level designation for each particular case. For example, if a
patient is admitted for resection of malignant neoplasm of the right
kidney, ICD-10-CM diagnosis code C64.1 (Malignant neoplasm of right
kidney, except renal pelvis) is reported as the principal diagnosis,
and any complicating conditions reported as secondary diagnoses during
the hospital stay would determine the appropriate severity level
designation for the case.
(b) Diseases of the Circulatory System Chapter Codes
    In the Diseases of the Circulatory System chapter of the ICD-10-CM
diagnosis classification (I00-I99), based on the results of our
comprehensive review, we are proposing to change the severity level
designation for 13 ICD-10-CM diagnosis codes from categories I21 (Acute
myocardial infarction) and I22 (Subsequent ST elevation (STEMI) and
non-ST elevation (NSTEMI) myocardial infarction) from an MCC to a CC.
    The following table contains the ICD-10-CM diagnosis codes for
which we are proposing a severity level change, and their impact on
resource use when reported as a secondary diagnosis.
[[Page 19238]]
                                 Proposed Severity Level Changes for Myocardial Infarction Codes as Secondary Diagnosis
--------------------------------------------------------------------------------------------------------------------------------------------------------
     ICD-10-CM  diagnosis code         Cnt1        C1        Cnt2        C2        Cnt3        C3       Current CC  subclass      Proposed CC  subclass
--------------------------------------------------------------------------------------------------------------------------------------------------------
I21.01 (ST elevation (STEMI)                2     1.2010         17     2.9902         38     3.0195  MCC.....................  CC.
 myocardial infarction involving
 left main coronary artery).
I21.02 (ST elevation (STEMI)              149     0.9326        322     1.6565        754     3.3157  MCC.....................  CC.
 myocardial infarction involving
 left anterior descending coronary
 artery).
I21.09 (ST elevation (STEMI)              583     1.2201      1,288     2.2225      3,744     3.1094  MCC.....................  CC.
 myocardial infarction involving
 other coronary artery of anterior
 wall).
I21.11 (ST elevation (STEMI)              175     1.8486        326     2.0867        581     3.1141  MCC.....................  CC.
 myocardial infarction involving
 right coronary artery).
I21.19 (ST elevation (STEMI)              913     1.5054      1,940     2.2641      4,081     3.1996  MCC.....................  CC.
 myocardial infarction involving
 other coronary artery of inferior
 wall).
I21.21 (ST elevation (STEMI)               30     0.9445         56     2.4160        117     2.9965  MCC.....................  CC.
 myocardial infarction involving
 left circumflex coronary artery).
I21.29 (ST elevation (STEMI)              162     1.0143        417     2.2401      1,048     3.3341  MCC.....................  CC.
 myocardial infarction involving
 other sites).
I21.3 (ST elevation (STEMI)             1,271     1.6587      3,876     2.2420     10,168     3.2432  MCC.....................  CC.
 myocardial infarction of
 unspecified site).
I22.0 (Subsequent ST elevation             10     0.9199         74     1.2558        165     2.6794  MCC.....................  CC.
 (STEMI) myocardial infarction of
 anterior wall).
I22.1 (Subsequent ST elevation              4     0.0000         81     1.6022        143     3.3056  MCC.....................  CC.
 (STEMI) myocardial infarction of
 inferior wall).
I22.2 (Subsequent non-ST elevation         94     2.1034        352     2.1291      1,916     3.0157  MCC.....................  CC.
 (NSTEMI) myocardial infarction).
I22.8 (Subsequent ST elevation              5     2.2963         18     2.0589         53     3.1306  MCC.....................  CC.
 (STEMI) myocardial infarction of
 other sites).
I22.9 (Subsequent ST elevation             27     1.7140         87     1.8737        293     2.9627  MCC.....................  CC.
 (STEMI) myocardial infarction of
 unspecified site).
--------------------------------------------------------------------------------------------------------------------------------------------------------
    As shown in the table above, all of these myocardial infarction
codes are currently assigned as MCCs. As explained earlier, values
close to 2.0 in column C1 suggest that the condition is more like a CC
than a non-CC but not as significant in resource usage as an MCC. The
C1 values for the secondary diagnoses with the largest number of cases
in this subset in the table above, ICD-10-CM codes I21.3 and I21.19,
are closer to 2.0 than to 1.0, indicating that these secondary
diagnoses are more aligned with a CC than either a non-CC or an MCC.
Therefore, the data suggest that for patients for whom any of the
myocardial infarction codes listed in the table above is reported as a
secondary diagnosis, the resources involved in their care are not
aligned with those of an MCC. Our clinical advisors reviewed these data
and believe that the resources involved in caring for a patient with
this condition are aligned with a CC. Patients with a secondary
diagnosis of myocardial infarction may require additional diagnostic
imaging, monitoring, medications, and additional interventions, thereby
consuming resources that are consistent with CC status. Our clinical
advisors noted that while, for certain codes, the number of cases shown
in the data may not be sufficient to reliably indicate impact on
resource use as a secondary diagnosis, these codes are clinically
similar to other codes for which the data are sufficient to indicate
impact on resource use. Because our clinical advisors believe that it
is appropriate to ensure consistency across codes describing similar
diagnoses, we are proposing to reassign the severity level for all of
the codes in the table above from an MCC to a CC.
(c) Diseases of the Skin and Subcutaneous Tissue Chapter Codes
    In the Diseases of the Skin and Subcutaneous Tissue chapter of the
ICD-10-CM diagnosis classification (L00-L99), based on the results of
our comprehensive review, we are proposing a change to the severity
level for 150 ICD-10-CM diagnosis codes describing pressure ulcers.
Pressure ulcers, which are also known as pressure injuries, involve
damage to the skin and soft tissue. They may result from prolonged
pressure over a bony prominence or result from a medical device. The
ICD-10-CM classification includes 150 diagnosis codes that describe
pressure ulcers across various anatomical regions and across the
various possible stages (stages 1 through 4, unspecified stage, and
unstageable). These codes are listed in Table 6P.1.d. associated with
this proposed rule (which is available via the internet on the CMS
website at: http://www.cms.hhs.gov/Medicare/Medicare-Fee-for-Service-Payment/AcuteInpatientPPS/index.html). In the course of our
comprehensive review of the CC/MCC lists, our clinical advisors
reviewed the current categorization of pressure ulcers, which designate
all stage 3 and 4 pressure ulcers as MCCs, while stage 1, stage 2,
unspecified stage,
[[Page 19239]]
and unstageable pressure ulcers are currently designated as non-CCs.
    Our clinical advisors reviewed data on the relative contribution to
the overall cost of hospital care for all stages of pressure ulcers
coded as secondary diagnoses, and found (1) that there was little
difference in the cost contribution regardless of stage, and (2) the
cost contributions (cost weights) of all stages supported a designation
of CC rather than MCC (for stage 3 and 4 ulcers), and CC rather than
non-CC (for stages 1, 2, unspecified, and unstageable). Our clinical
advisors noted that the apparent similar contribution of all pressure
ulcer stages can be explained by the fact that pressure ulcers occur in
patients with serious underlying illness, such as stroke, cancer,
dementia, and end-stage cardiac or pulmonary disease that can result in
multiple factors (frailty, immobility, paralysis, malnutrition, and
general debility) that predispose them to pressure ulcers. It is the
serious underlying illness and debilitated state that causes the
pressure ulcer that is the primary driver of resource use. Although a
pressure ulcer at any stage requires care and preventive measures that
make additional contributions to the overall cost of care, our clinical
advisors believe that the fact that the ulcer developed in the first
place is more important than the stage of the ulcer itself in
determining the impact on the costs of hospitalization. The presence of
a pressure ulcer may indicate an increase in resource use, but that
increase is similar regardless of the stage of the ulcer.
    The following table contains illustrations of pressure ulcer codes
and their impact on resource use when reported as a secondary
diagnosis. We selected secondary diagnosis codes describing pressure
ulcer of the sacrum as examples because they account for almost half of
all instances of pressure ulcers reported as secondary diagnoses, but
note that the data for the codes describing pressure ulcer of other
body parts generally show a similar pattern. As noted previously, the
data analysis for the remainder of the pressure ulcer codes for which
we are proposing a change in severity level designation is included in
the supplementary file that we are making available on the CMS website.
                                     Proposed Severity Level Changes for Pressure Ulcer Codes as Secondary Diagnosis
--------------------------------------------------------------------------------------------------------------------------------------------------------
     ICD-10-CM  diagnosis code         Cnt1        C1        Cnt2        C2        Cnt3        C3       Current CC  subclass      Proposed CC  subclass
--------------------------------------------------------------------------------------------------------------------------------------------------------
L89.150 (Pressure ulcer of sacral         605      2.003      6,247      2.560     24,047      3.254  Non-CC..................  CC.
 region, unstageable).
L89.151 (Pressure ulcer of sacral       2,374      1.691     16,688      2.404     36,428      3.182  Non-CC..................  CC.
 region, stage 1).
L89.152 (Pressure ulcer of sacral       4,238      1.737     35,608      2.497     95,832      3.274  Non-CC..................  CC.
 region, stage 2).
L89.153 (Pressure ulcer of sacral       1,722      1.832     15,266      2.522     48,414      3.289  MCC.....................  CC.
 region, stage 3).
L89.154 (Pressure ulcer of sacral       1,237      1.755     14,306      2.438     56,619      3.196  MCC.....................  CC.
 region, stage 4).
L89.159 (Pressure ulcer of sacral       1,453      1.387     12,466      2.311     35,020      3.176  Non-CC..................  CC.
 region, unspecified stage).
--------------------------------------------------------------------------------------------------------------------------------------------------------
    As explained previously, a value in column C1 that is close to 2.0
suggests the condition is more like a CC than a non-CC but not as
significant in resource usage as an MCC. Given that the values in
column C1 in the table above are closer to 2.0 than to 1.0, the data
suggest that when pressure ulcers of the sacral region are reported as
a secondary diagnosis, the resources involved in caring for these
patients are more consistent with a CC than either a non-CC or an MCC.
Our clinical advisors reviewed these data and believe that it is
appropriate to ensure consistency across codes involving similar
diagnoses. Therefore, we are proposing to designate as CCs both the 50
ICD-10-CM diagnosis codes that are currently designated as MCCs and the
100 ICD-10-CM diagnosis codes currently designated as non-CCs.
    We note that, under the Hospital-Acquired Condition (HAC) payment
provision established by section 5001(c) of the Deficit Reduction Act
(DRA) of 2005, hospitals no longer receive additional payment for cases
in which one of the selected conditions occurred but was not present on
admission (POA). That is, the case is paid as though the condition were
not present. The HAC-POA payment provision is applicable for secondary
diagnosis code reporting only, as the selected conditions are
designated as a CC or an MCC when reported as a secondary diagnosis.
For the DRA HAC-POA payment provision, a payment adjustment is only
applicable if there are no other CC/MCC conditions reported on the
claim. Currently, there are 14 HAC categories subject to the HAC-POA
payment provision, one of which is pressure ulcers. The pressure ulcer
HAC category (HAC 04) specifically includes diagnosis codes describing
a stage 3 or stage 4 pressure ulcer because they are designated as an
MCC, as noted earlier in this section. If the proposed severity level
designations for the pressure ulcer diagnosis codes are finalized, the
100 ICD-10-CM diagnosis codes describing pressure ulcers currently
designated as non-CCs would be subject to the HAC-POA payment provision
as CCs when reported as a secondary diagnosis and not POA, effective
beginning in FY 2020. The diagnosis codes describing a stage 3 or stage
4 pressure ulcer would continue to be subject to the HAC-POA payment
provision as CCs.
    In addition, consistent with the proposed changes to the severity
level designation of the pressure ulcer codes, we are proposing to
revise the title of the HAC 04 category from ``Pressure Ulcer--Stages
III & IV'' to ``Pressure Ulcers''. We refer readers to the website at:
https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/HospitalAcqCond/index.html for additional information regarding the
HAC-POA payment provision under the DRA.
(d) Diseases of the Genitourinary System Chapter Codes
    In the Diseases of the Genitourinary System chapter of the ICD-10-
CM diagnosis classification (N00-N99), based on the results of our
comprehensive analysis, we are proposing to change the severity level
designation for eight ICD-10-CM diagnosis codes. For these eight
[[Page 19240]]
diagnosis codes, based on their clinical judgment and for the reasons
described below, our clinical advisors recommended that we increase the
severity level designation from a CC to an MCC for one code, and from a
non-CC to a CC for seven codes. The following table contains the
Diseases of the Genitourinary System chapter codes that describe
conditions for which we are proposing a severity level designation
change, and their impact on resource use when reported as a secondary
diagnosis.
                                     Proposed Severity Level Changes for Genitourinary Codes as Secondary Diagnosis
--------------------------------------------------------------------------------------------------------------------------------------------------------
     ICD-10-CM diagnosis code          Cnt1        C1        Cnt2        C2        Cnt3        C3       Current CC  subclass      Proposed CC  subclass
--------------------------------------------------------------------------------------------------------------------------------------------------------
N10 (Acute pyelonephritis)........      5,385     0.9639     20,476     1.9444     26,929     3.0413  Non-CC..................  CC.
N18.4 (Chronic kidney disease,         36,940     1.0919    219,482     2.0679    319,849     3.0840  Non-CC..................  CC.
 stage 4 (severe)).
N18.5 (Chronic kidney disease,          1,158     1.0303     30,851     2.0841     34,733     3.1508  Non-CC..................  CC.
 stage 5).
N18.6 (End stage renal disease)...     26,276     1.5755    578,587     2.3010    492,710     3.2761  CC......................  MCC.
N30.00 (Acute cystitis without         18,597     1.0576     53,820     1.9409     73,996     2.8976  Non-CC..................  CC.
 hematuria).
N30.01 (Acute cystitis with             4,872     0.9503     16,949     1.8514     24,422     2.8070  Non-CC..................  CC.
 hematuria).
N41.0 (Acute prostatitis).........        845     0.9519      3,031     1.8163      2,135     3.0450  Non-CC..................  CC.
N76.4 (Abscess of vulva)..........        368     0.8284      1,276     2.0906      1,049     3.1341  Non-CC..................  CC.
--------------------------------------------------------------------------------------------------------------------------------------------------------
    The C1, C2, and C3 values in the table above are generally close to
1.0, 2.0, and 3.0, respectively, which would indicate that these
conditions are more aligned with a non-CC than with either a CC or an
MCC. However, our clinical advisors believe that patients with a
secondary diagnosis of one of the genitourinary conditions in the table
above may consume additional resources, including but not limited to
monitoring for hypertension, diagnostic tests, and balancing
electrolytes. Patients with end-stage renal disease (ICD-10-CM code
N18.6) would typically require dialysis in addition to these resources,
which our clinical advisors believe is more aligned with an MCC.
Therefore, we are proposing to change the severity level designations
for the eight codes as shown in the table above.
e. Injury, Poisoning and Certain Other Consequences of External Causes
Chapter Codes
    In subcategory S32.5 (Fracture of pubis) of the ICD-10-CM diagnosis
classification, based on our comprehensive analysis, we are proposing
to change the severity level designation from CC to non-CC for 19 ICD-
10-CM diagnosis codes that specify fractures of the pubic bone. The
following table contains the diagnosis codes for which we are proposing
a severity level designation change, and their impact on resource use
when reported as a secondary diagnosis.
                                      Proposed Severity Level Changes, Pubis Fracture Codes as Secondary Diagnosis
--------------------------------------------------------------------------------------------------------------------------------------------------------
     ICD-10-CM diagnosis code          Cnt1        C1        Cnt2        C2        Cnt3        C3       Current CC  subclass      Proposed CC  subclass
--------------------------------------------------------------------------------------------------------------------------------------------------------
S32.501A (Unspecified fracture of         393     1.0234      1,171     2.1215        847     3.0423  CC......................  Non-CC.
 right pubis, initial encounter
 for closed fracture).
S32.501K (Unspecified fracture of           1     1.5125         12     2.1144          2     1.8454  CC......................  Non-CC.
 right pubis, subsequent encounter
 for fracture with nonunion).
S32.502A (Unspecified fracture of         398     1.3072      1,152     2.0593        914     3.0028  CC......................  Non-CC.
 left pubis, initial encounter for
 closed fracture).
S32.502K (Unspecified fracture of           3     0.0000          7     2.8723          1     0.7401  CC......................  Non-CC.
 left pubis, subsequent encounter
 for fracture with nonunion).
S32.509A (Unspecified fracture of          49     1.1075        156     2.1066        154     3.1704  CC......................  Non-CC.
 unspecified pubis, initial
 encounter for closed fracture).
S32.509K (Unspecified fracture of           0     0.0000          1     3.4022          1     2.1306  CC......................  Non-CC.
 unspecified pubis, subsequent
 encounter for fracture with
 nonunion).
S32.511A (Fracture of superior rim        743     1.1812      2,132     2.1519      1,504     2.8763  CC......................  Non-CC.
 of right pubis, initial encounter
 for closed fracture).
S32.511K (Fracture of superior rim          2     2.0354          5     0.0000          4     2.3425  CC......................  Non-CC.
 of right pubis, subsequent
 encounter for fracture with
 nonunion).
[[Page 19241]]

S32.512A (Fracture of superior rim        760     1.5738      2,098     2.0828      1,590     2.9020  CC......................  Non-CC.
 of left pubis, initial encounter
 for closed fracture).
S32.512K (Fracture of superior rim          3     2.1915          3     2.4812          8     4.0000  CC......................  Non-CC.
 of left pubis, subsequent
 encounter for fracture with
 nonunion).
S32.519A (Fracture of superior rim         15     2.6829         53     1.5795         35     2.9052  CC......................  Non-CC.
 of unspecified pubis, initial
 encounter for closed fracture).
S32.519K (Fracture of superior rim          0      0.000          0      0.000          0      0.000  CC......................  Non-CC.
 of unspecified pubis, subsequent
 encounter for fracture with
 nonunion).
S32.591A (Other specified fracture      2,427     1.2524      6,513     2.0970      4,397     2.9930  CC......................  Non-CC.
 of right pubis, initial encounter
 for closed fracture).
S32.591K (Other specified fracture          7     2.7706         15     1.9772          5     0.8969  CC......................  Non-CC.
 of right pubis, subsequent
 encounter for fracture with
 nonunion).
S32.592A (Other specified fracture      2,424     1.3691      6,604     2.0921      4,922     2.9428  CC......................  Non-CC.
 of left pubis, initial encounter
 for closed fracture).
S32.592K (Other specified fracture          4     0.6970         24     2.5574         10     3.0015  CC......................  Non-CC.
 of left pubis, subsequent
 encounter for fracture with
 nonunion).
S32.599A (Other specified fracture        151     1.6748        457     2.0518        394     3.1844  CC......................  Non-CC.
 of unspecified pubis, initial
 encounter for closed fracture).
S32.599K (Other specified fracture          1     0.0000          0     0.0000          3     1.4709  CC......................  Non-CC.
 of unspecified pubis, subsequent
 encounter for fracture with
 nonunion).
--------------------------------------------------------------------------------------------------------------------------------------------------------
    The C1, C2, and C3 values in the table above are generally close to
1.0, 2.0, and 3.0, respectively, particularly for those codes for which
the highest number of cases were reported. This indicates that these
conditions are more aligned with a non-CC than with either a CC or an
MCC. Our clinical advisors reviewed these data, particularly with
respect to ICD-10-CM diagnosis codes S32.591A and S32.592A which
account for the majority of cases in this group, and believe the
resources involved in caring for a patient with these conditions are
more aligned with a non-CC. Our clinical advisors noted that, similar
to the proposed severity level designation changes in the Neoplasms
chapter of the ICD-10-CM diagnosis classification discussed above, if
patients are admitted for treatment of an acute or nonunion fracture of
the pubic bone, the fracture is the principal diagnosis, and other
complicating or comorbid conditions reported as secondary diagnoses
would determine the appropriate severity level for each particular
case. For example, if a patient is admitted for surgical treatment of
the nonunion of a right pubic fracture at the superior rim, ICD-10-CM
diagnosis code S32.511K (Fracture of superior rim of right pubis,
subsequent encounter for fracture with nonunion) is reported as the
principal diagnosis. Because our clinical advisors believe that it is
appropriate to ensure consistency across codes involving similar
diagnoses, we are proposing to reassign the severity level for all of
the codes in the table above from a CC to a non-CC.
    In category S72 (Fracture of femur) of the ICD-10-CM
classification, based on our comprehensive analysis, we are proposing
to change the severity level designation from MCC to CC for 35 ICD-10-
CM diagnosis codes specifying fractures of the hip. The following table
contains the Injury, Poisoning and Certain Other Consequences of
External Causes chapter codes for which we are proposing a severity
level change, and their impact on resource use when reported as a
secondary diagnosis.
                                       Proposed Severity Level Changes, Hip Fracture Codes as Secondary Diagnosis
--------------------------------------------------------------------------------------------------------------------------------------------------------
     ICD-10-CM diagnosis code          Cnt1        C1        Cnt2        C2        Cnt3        C3       Current CC  subclass      Proposed CC  subclass
--------------------------------------------------------------------------------------------------------------------------------------------------------
S72.011A (Unspecified                     145     2.1400        464     2.3419        700     2.9623  MCC.....................  CC.
 intracapsular fracture of right
 femur, initial encounter for
 closed fracture).
S72.012A (Unspecified                     155     2.0099        455     2.2738        754     3.0423  MCC.....................  CC.
 intracapsular fracture of left
 femur, initial encounter for
 closed fracture).
[[Page 19242]]

S72.019A (Unspecified                       1     0.9364          4     1.0008         10     2.7267  MCC.....................  CC.
 intracapsular fracture of
 unspecified femur, initial
 encounter for closed fracture).
S72.111A (Displaced fracture of           266     1.5110        605     2.2983        442     3.1874  MCC.....................  CC.
 greater trochanter of right
 femur, initial encounter for
 closed fracture).
S72.112A (Displaced fracture of           249     1.7779        573     2.4626        418     3.0108  MCC.....................  CC.
 greater trochanter of left femur,
 initial encounter for closed
 fracture).
S72.113A (Displaced fracture of            11     1.7739         21     2.9650         23     3.5762  MCC.....................  CC.
 greater trochanter of unspecified
 femur, initial encounter for
 closed fracture).
S72.114A (Nondisplaced fracture of        112     0.8826        339     2.1640        178     3.1028  MCC.....................  CC.
 greater trochanter of right
 femur, initial encounter for
 closed fracture).
S72.115A (Nondisplaced fracture of        118     1.3960        288     2.0607        202     2.8640  MCC.....................  CC.
 greater trochanter of left femur,
 initial encounter for closed
 fracture).
S72.116A (Nondisplaced fracture of          3     0.9472          8     1.3030          3     3.4270  MCC.....................  CC.
 greater trochanter of unspecified
 femur, initial encounter for
 closed fracture).
S72.121A (Displaced fracture of            22     2.0288         74     3.1110         49     3.1174  MCC.....................  CC.
 lesser trochanter of right femur,
 initial encounter for closed
 fracture).
S72.122A (Displaced fracture of            23     1.1648         75     2.9379         40     2.4430  MCC.....................  CC.
 lesser trochanter of left femur,
 initial encounter for closed
 fracture).
S72.123A (Displaced fracture of             0     0.0000          2     0.0000          6     2.2881  MCC.....................  CC.
 lesser trochanter of unspecified
 femur, initial encounter for
 closed fracture).
S72.124A (Nondisplaced fracture of          4     0.9792         19     2.4244          8     2.7792  MCC.....................  CC.
 lesser trochanter of right femur,
 initial encounter for closed
 fracture).
S72.125A (Nondisplaced fracture of          5     0.6759         13     1.2700          7     3.1292  MCC.....................  CC.
 lesser trochanter of left femur,
 initial encounter for closed
 fracture).
S72.126A (Nondisplaced fracture of          0     0.0000          0     0.0000          1     1.1159  MCC.....................  CC.
 lesser trochanter of unspecified
 femur, initial encounter for
 closed fracture).
S72.131A (Displaced apophyseal              1     3.4327          0     0.0000          2     4.0000  MCC.....................  CC.
 fracture of right femur, initial
 encounter for closed fracture).
S72.132A (Displaced apophyseal              0     0.0000          1     2.6423          0     0.0000  MCC.....................  CC.
 fracture of left femur, initial
 encounter for closed fracture).
S72.134A (Nondisplaced apophyseal           0      0.000          1      3.501          0      0.000  MCC.....................  CC.
 fracture of right femur, initial
 encounter for closed fracture).
S72.135A (Nondisplaced apophyseal           0      0.000          0      0.000          0      0.000  MCC.....................  CC.
 fracture of left femur, initial
 encounter for closed fracture).
S72.136A (Nondisplaced apophyseal           0      0.000          0      0.000          0      0.000  MCC.....................  CC.
 fracture of unspecified femur,
 initial encounter for closed
 fracture).
[[Page 19243]]

S72.141A (Displaced                       289     2.2607        894     2.6329      1,293     3.1692  MCC.....................  CC.
 intertrochanteric fracture of
 right femur, initial encounter
 for closed fracture).
S72.142A (Displaced                       347     2.2587        972     2.5641      1,405     3.1003  MCC.....................  CC.
 intertrochanteric fracture of
 left femur, initial encounter for
 closed fracture).
S72.143A (Displaced                        10     2.3446         21     1.0169         35     3.3080  MCC.....................  CC.
 intertrochanteric fracture of
 unspecified femur, initial
 encounter for closed fracture).
S72.144A (Nondisplaced                     44     1.7331        149     2.4637        168     3.1302  MCC.....................  CC.
 intertrochanteric fracture of
 right femur, initial encounter
 for closed fracture).
S72.145A (Nondisplaced                     39     1.9170        112     2.8435        170     3.2612  MCC.....................  CC.
 intertrochanteric fracture of
 left femur, initial encounter for
 closed fracture).
S72.146A (Nondisplaced                      0     0.0000          9     1.2250          2     0.0000  MCC.....................  CC.
 intertrochanteric fracture of
 unspecified femur, initial
 encounter for closed fracture).
S72.21XA (Displaced                        57     1.7697        159     2.2460        205     3.1614  MCC.....................  CC.
 subtrochanteric fracture of right
 femur, initial encounter for
 closed fracture).
S72.22XA (Displaced                        70     2.3685        160     2.6079        184     3.2178  MCC.....................  CC.
 subtrochanteric fracture of left
 femur, initial encounter for
 closed fracture).
S72.23XA (Displaced                         0     0.0000          9     3.4708          6     3.3401  MCC.....................  CC.
 subtrochanteric fracture of
 unspecified femur, initial
 encounter for closed fracture).
S72.24XA (Nondisplaced                     12     0.5442         22     2.7275         11     3.6028  MCC.....................  CC.
 subtrochanteric fracture of right
 femur, initial encounter for
 closed fracture).
S72.25XA (Nondisplaced                     13     1.7115         25     2.1005         17     3.1686  MCC.....................  CC.
 subtrochanteric fracture of left
 femur, initial encounter for
 closed fracture).
S72.26XA (Nondisplaced                      0     0.0000          1     2.0474          0     0.0000  MCC.....................  CC.
 subtrochanteric fracture of
 unspecified femur, initial
 encounter for closed fracture).
S72.301A (Unspecified fracture of          61     2.3462        156     3.0491        159     3.5567  MCC.....................  CC.
 shaft of right femur, initial
 encounter for closed fracture).
S72.302A (Unspecified fracture of          71     2.6314        186     2.4838        157     3.4436  MCC.....................  CC.
 shaft of left femur, initial
 encounter for closed fracture).
--------------------------------------------------------------------------------------------------------------------------------------------------------
    As shown in the table above, all of these secondary diagnoses are
currently designated as MCCs. The C2 values of the codes most
frequently reported, ICD-10-CM codes S72.142A and S72.141A, are closer
to 3.0 than 2.0, which indicates that they are more clinically aligned
with a CC than an MCC. Therefore, the data suggest that when fracture
of the hip codes are reported as a secondary diagnosis, the resources
involved in caring for patients with these conditions are more aligned
with a CC than an MCC. Our clinical advisors reviewed these data and
believe the resources involved in caring for patients with these
conditions are more aligned with a CC. While we note that there is
little to no data for some of these ICD-10-CM codes as secondary
diagnoses, there is sufficient data for clinically similar secondary
diagnoses. Therefore, because our clinical advisors believe that it is
appropriate to ensure consistency across codes involving similar
diagnoses, we are proposing to reassign the severity level for all of
the codes in the table above from an MCC to a CC.
(f) Factors Influencing Health Status and Contact With Health Services
    The last chapter of the ICD-10-CM classification specifies other
factors that influence a patient's health status or necessitate contact
with health care
[[Page 19244]]
providers (Z00-Z99). Of these ICD-10-CM codes, based on our
comprehensive review, we are proposing to change the severity level
designation from non-CC to CC for four codes specifying anti-microbial
drug resistance and one code specifying homelessness. Based on this
same review, we also are proposing to change the severity level
designation from CC to non-CC for 3 ICD-10-CM codes specifying adult
body mass index (BMI) ranges and 13 ICD-10-CM codes indicating that the
patient has previously undergone an organ transplant or cardiac device
implantation with no current complications (the code indicates status
only).
    The following table contains the five codes for which we are
proposing a severity level change from non-CC to CC and their impact on
resource use when reported as a secondary diagnosis.
                                       Proposed Severity Level Changes for Z Chapter Codes as Secondary Diagnosis
--------------------------------------------------------------------------------------------------------------------------------------------------------
     ICD-10-CM diagnosis code          Cnt1        C1        Cnt2        C2        Cnt3        C3        Current CC subclass      Proposed CC subclass
--------------------------------------------------------------------------------------------------------------------------------------------------------
Z16.12 (Extended spectrum beta          3,082     2.1134     19,692     2.5995     25,544     3.1752  Non-CC..................  CC.
 lactamase (ESBL) resistance).
Z16.21 (Resistance to vancomycin).        692     2.1507      6,733     2.8659     11,672     3.3365  Non-CC..................  CC.
Z16.24 (Resistance to multiple          2,970     1.5821     16,097     2.4086     20,738     3.1174  Non-CC..................  CC.
 antibiotics).
Z16.39 (Resistance to other               448     1.2003      2,326     2.2555      2,494     3.1127  Non-CC..................  CC.
 specified antimicrobial drug).
Z59.0 (Homelessness)..............     14,927     1.5964     41,328     2.3012     22,101     3.1256  Non-CC..................  CC.
--------------------------------------------------------------------------------------------------------------------------------------------------------
    As indicated above, a value close to 2.0 in column C1 suggests that
the secondary diagnosis is more aligned with a CC than a non-CC.
Because the C1 values in the table above are generally close to 2, the
data suggest that when these five Z chapter diagnosis codes are
reported as a secondary diagnosis, the resources involved in caring for
a patient with other factors such as homelessness support increasing
the severity level from a non-CC to a CC. Our clinical advisors
reviewed these data and believe the resources involved in caring for
patients with these other reported factors are more aligned with a CC.
    While we note that ICD-10-CM diagnosis code Z16.39 does not follow
this pattern, our clinical advisors believe that this code is
clinically similar to the other diagnoses in the table above describing
anti-microbial drug resistance. Therefore, because our clinical
advisors believe that it is appropriate to ensure consistency across
codes involving similar diagnoses, we are proposing to reassign the
severity level for all four of the codes specifying anti-microbial drug
resistance in the table above from a non-CC to a CC.
    The following table contains the 14 BMI and transplant/cardiac
device status codes for which we are proposing a severity level
designation change from CC to non-CC, and their impact on resource use
when reported as a secondary diagnosis.
                   Proposed Severity Level Changes for Z Chapter BMI and Transplant/Cardiac Device Status Codes as Secondary Diagnosis
--------------------------------------------------------------------------------------------------------------------------------------------------------
     ICD-10-CM diagnosis code          Cnt1        C1        Cnt2        C2        Cnt3        C3        Current CC subclass      Proposed CC subclass
--------------------------------------------------------------------------------------------------------------------------------------------------------
Z68.1 (Body mass index (BMI) 19.9      18,983     1.1170    244,156     2.2082    350,731     3.0733  CC......................  Non-CC.
 or less, adult).
Z68.41 (Body mass index (BMI) 40.0-   139,420     1.1139    209,300     2.0752    213,929     3.0814  CC......................  Non-CC.
 44.9, adult).
Z68.42 (Body mass index (BMI) 45.0-    60,408     1.1643    102,897     2.0783    109,928     3.0867  CC......................  Non-CC.
 49.9, adult).
Z94.0 (Kidney transplant status)..     18,649     1.0277     70,484     2.0573     45,382     3.1032  CC......................  Non-CC.
Z94.1 (Heart transplant status)...      2,311     1.0649      8,138     2.2471      5,037     3.2653  CC......................  Non-CC.
Z94.2 (Lung transplant status)....      1,461     1.0886      5,032     2.1898      3,466     3.1285  CC......................  Non-CC.
Z94.3 (Heart and lungs transplant          20     0.8287         88     3.0647         59     3.1675  CC......................  Non-CC.
 status).
Z94.4 (Liver transplant status)...      6,050     0.9811     17,556     2.0323     12,970     3.1688  CC......................  Non-CC.
Z94.81 (Bone marrow transplant          1,655     0.9778      5,447     2.0919      5,150     3.1918  CC......................  Non-CC.
 status).
Z94.82 (Intestine transplant              119     1.5661        351     2.1844        230     3.2081  CC......................  Non-CC.
 status).
Z94.83 (Pancreas transplant             1,789     1.2032      7,788     2.0739      4,536     3.1381  CC......................  Non-CC.
 status).
Z94.84 (Stem cells transplant           3,083     1.1451     10,412     2.3041      8,835     3.2932  CC......................  Non-CC.
 status).
Z95.811 (Presence of heart assist       1,053     1.6453      7,373     2.3089      5,974     3.1198  CC......................  Non-CC.
 device).
Z95.812 (Presence of fully                 45     2.0467        132     2.5603        142     2.4139  CC......................  Non-CC.
 implantable artificial heart).
--------------------------------------------------------------------------------------------------------------------------------------------------------
[[Page 19245]]
    The C1, C2, and C3 values in the table above are generally close to
1.0, 2.0, and 3.0, respectively. This indicates that these conditions
are more aligned with a non-CC than with either a CC or an MCC.
Therefore, the data suggest that when these BMI and transplant/cardiac
device status codes are reported as a secondary diagnosis, the
resources involved in caring for patients with these conditions
indicating health status are not aligned with those of a CC. Our
clinical advisors reviewed these data and believe the resources
involved in caring for patients with these conditions indicating health
status are more aligned with a non-CC. Our clinical advisors noted
that, in the absence of a diagnosis that represents a complication of
the patient's current status, the presence of a BMI within a stated
range or the fact that a patient has previously undergone a transplant
or cardiac device implant is not by itself a clinical indication of
increased severity of illness. Therefore, we are proposing to reassign
the severity level for all of the codes in the table above from a CC to
a non-CC.
(3) Results of Impact Analysis
    Using claims data from the September 2018 update of the FY 2018
MedPAR file, we employed the following method to determine the impact
of changing severity level designation for the 1,492 ICD-10-CM
diagnosis codes. Edits and cost estimations used for relative weight
calculations were applied, resulting in 8,908,404 IPPS claims analyzed
for this impact evaluation of our proposed changes to severity levels.
We refer readers to section II.G. of the preamble of this proposed rule
for further information regarding the methodology for calculation of
the proposed relative weights.
    First, we analyzed the 8,908,404 IPPS claims using the Version 36
ICD-10 MS-DRG GROUPER to determine the current distribution of severity
level designation. We identified 3,648,331 cases (41.0 percent)
reporting one or more secondary diagnosis codes assigned to the MCC
severity level, 3,612,600 cases (40.5 percent) reporting one or more
secondary diagnosis codes assigned to the CC severity level, and
1,647,473 cases (18.5 percent) not reporting a secondary diagnosis code
assigned to the MCC or CC severity level.
    Next, we reprocessed the 8,908,404 claims using the proposed change
in severity level designation for the 1,492 ICD-10-CM diagnosis codes
to determine the impact on the distribution of severity level
designation. We identified 3,236,493 cases (36.3 percent) reporting one
or more secondary diagnosis codes that would be assigned to the MCC
severity level, 3,589,677 cases (40.3 percent) reporting one or more
secondary diagnosis codes that would be assigned to the CC severity
level, and 2,082,234 cases (23.4 percent) not reporting a secondary
diagnosis code that would be assigned to the MCC or CC severity level.
    Below we provide a summary of the steps followed for the analysis
performed.
    Step 1.--Analyzed 8,908,404 claims to determine the current
distribution of severity level designation.
  Severity Level Distribution Before Proposed Changes--8,908,404 Claims
                                Analyzed
------------------------------------------------------------------------

------------------------------------------------------------------------
Number of cases reporting one or more                  3,648,331 (41.0%)
 secondary diagnosis codes assigned to the
 MCC severity level.......................
Number of cases reporting one or more                  3,612,600 (40.5%)
 secondary diagnosis codes assigned to the
 CC severity level........................
Number of cases reporting no secondary                 1,647,473 (18.5%)
 diagnosis codes assigned to the MCC or CC
 severity level...........................
------------------------------------------------------------------------
    Step 2.--Made proposed severity level changes to 1,492 ICD-10-CM
codes.
 Step 2--Made proposed severity level changes to 1,492 ICD-10-CM codes.
------------------------------------------------------------------------
                                     Proposed version 37     Number of
 Current version 36 severity level     severity level          codes
------------------------------------------------------------------------
Non-CC............................  CC..................             183
CC................................  Non-CC..............           1,148
CC................................  MCC.................               8
MCC...............................  Non-CC..............              17
MCC...............................  CC..................             136
                                                         ---------------
    Total.........................  ....................           1,492
------------------------------------------------------------------------
    Step 3.--Reprocessed 8,908,404 claims to determine severity level
distribution after changes.
  Severity Level Distribution after Proposed Changes--8,908,404 Claims
                                Analyzed
------------------------------------------------------------------------

------------------------------------------------------------------------
Number of cases reporting one or more                  3,236,493 (36.3%)
 secondary diagnosis codes assigned to the
 MCC severity level.......................
Number of cases reporting one or more                  3,589,677 (40.3%)
 secondary diagnosis codes assigned to the
 CC severity level........................
Number of cases reporting no secondary                 2,082,234 (23.4%)
 diagnosis codes assigned to the MCC or CC
 severity level...........................
------------------------------------------------------------------------
    The overall statistics by CC subgroup for the proposed Version 37
MS-DRGs are contained in the table below. Cases in the MCC subgroup
have average costs that are 62 percent higher than the average costs
for cases in the CC subgroup. The CC subgroup with the largest number
of cases is the CC subgroup with 40.3 percent of the cases.
[[Page 19246]]
                                     Overall Statistics for Proposed MS-DRGs
----------------------------------------------------------------------------------------------------------------
                                                                     Number of
                           CC subgroup                                 cases          Percent      Average costs
----------------------------------------------------------------------------------------------------------------
Major...........................................................       3,236,493            36.3         $16,890
CC..............................................................       3,589,677            40.3          10,518
Non-CC..........................................................       2,082,234            23.4          10,166
----------------------------------------------------------------------------------------------------------------
    The distribution of cases across the different types of CC
subgroups in the proposed Version 37 MS-DRGs is contained in the table
below. The table shows that 91 percent of the cases would be assigned
to base MS-DRGs with three CC subgroups, and only 9 percent of the
cases would be assigned to base MS-DRGs with no CC subgroups.
Distribution of Patient by Type of CC Subgroup in Proposed Version 37 MS-
                                  DRGs
------------------------------------------------------------------------
               CC subgroup                    Number          Percent
------------------------------------------------------------------------
None....................................              68               9
(MCC and CC), Non-CC....................              84              11
MCC, (CC and Non-CC)....................             132              17
MCC, CC, and Non-CC.....................             477              63
                                         -------------------------------
    Total...............................             761  ..............
------------------------------------------------------------------------
    We performed regression analysis to compare the variance in the MS-
DRGs with and without the proposed severity level designation changes
and thereby the impact of payment to cost ratios. The results of the
regression analysis showed a slight decrease in variance with the
proposed severity level designation changes, showing an R-squared of
35.9 percent after making the severity level changes, compared with an
R-squared of 35.6 percent in the current Version 36 ICD-10 MS-DRG
GROUPER. This indicates that the proposed severity level changes
increase the explanatory power of the GROUPER in capturing differences
in expected cost between the MS-DRGs and thus would improve the overall
accuracy of the IPPS payment system.
    After considering the results of our data analysis, the clinical
judgment of our clinical advisors, and the overall aggregate impact of
these changes, we are proposing a change to the severity level
designations for 1,492 ICD-10-CM diagnosis codes as shown in Table
6P.1c. associated with this proposed rule (which is available via the
internet on the CMS website at: http://www.cms.hhs.gov/Medicare/Medicare-Fee-for-Service-Payment/AcuteInpatientPPS/index.html.)
d. Requested Changes to Severity Levels
(1) Acute Right Heart Failure
    We received a request to change the severity level for ICD-10-CM
diagnosis codes I50.811 (Acute right heart failure) and I50.813 (Acute
on chronic right heart failure) from a non-CC to an MCC. The requestor
stated that similar diagnosis codes in the classification are
designated as an MCC. We used the approach outlined earlier in this
section to evaluate this request. The following table shows the claims
data that were used to evaluate this request:

--------------------------------------------------------------------------------------------------------------------------------------------------------
     ICD-10-CM diagnosis code          Cnt1        C1        Cnt2        C2        Cnt3        C3       Current CC  subclass     Requested CC  subclass
--------------------------------------------------------------------------------------------------------------------------------------------------------
I50.811 Acute right heart failure.         92     1.3290        470     2.5375      1,632     3.1907  non-CC..................  MCC.
I50.813 Acute on chronic right            183     1.4412      1,189     2.6036      3,099     3.2870  non-CC..................  MCC.
 heart failure.
--------------------------------------------------------------------------------------------------------------------------------------------------------
    For ICD-10-CM diagnosis code I50.811, the data suggest that the
resources involved in caring for a patient with this condition are 33
percent greater than expected when the patient has either no other
secondary diagnosis present, or all the other secondary diagnoses
present are non-CCs. The resources are 54 percent greater than expected
when reported in conjunction with another secondary diagnosis that is a
CC, and 19 percent greater than expected when reported in conjunction
with another secondary diagnosis code that is an MCC. Our clinical
advisors reviewed this request and agree that the resources involved in
caring for a patient with this condition are not aligned with those of
an MCC.
    For ICD-10-CM diagnosis code I50.813, the data suggest that the
resources involved in caring for a patient with this condition are 44
percent greater than expected when the patient has either no other
secondary diagnosis present or all the other secondary diagnoses
present are non-CCs. The resources are 60 percent greater than expected
when reported in conjunction with another secondary diagnosis that is a
CC, and 28 percent greater than expected when reported in conjunction
with another secondary diagnosis code that is an MCC. Our clinical
advisors reviewed this request and agree that the resources involved in
caring for a patient with this condition are not aligned with those of
an MCC.
    However, we note that although the data suggest that the resources
involved in caring for a patient with this condition are not aligned
with those of an MCC, the data suggest and our clinical advisors
believe that the resources appear to be aligned with
[[Page 19247]]
those of a CC. Therefore, we are soliciting public comment on whether a
CC severity level designation for ICD-10-CM diagnosis codes I50.811 and
I50.813 for FY 2020 is appropriate.
(2) Chronic Right Heart Failure
    We received a request to change the severity level for ICD-10-CM
diagnosis code I50.812 (Chronic right heart failure) from a non-CC to a
CC. The requestor stated that this code warrants CC classification
because it indicates the presence and treatment of chronic heart
failure. We used the approach outlined earlier to evaluate this
request. The following table contains the data that we used to evaluate
this request:

--------------------------------------------------------------------------------------------------------------------------------------------------------
     ICD-10-CM diagnosis code          Cnt1        C1        Cnt2        C2        Cnt3        C3       Current CC  subclass     Requested CC  subclass
--------------------------------------------------------------------------------------------------------------------------------------------------------
I50.812 Chronic right heart               179     1.5114      1,533     2.1146      1,758     3.0549  non-CC..................  CC.
 failure.
--------------------------------------------------------------------------------------------------------------------------------------------------------
    For ICD-10-CM diagnosis code I50.812, the data suggest that the
resources involved in caring for a patient with this condition are 51
percent greater than expected when the patient has either no other
secondary diagnosis present or all the other secondary diagnoses
present are non-CCs. The resources are 11 percent greater than expected
when reported in conjunction with another secondary diagnosis that is a
CC, and 5 percent greater than expected when reported in conjunction
with another secondary diagnosis code that is an MCC. Our clinical
advisors reviewed this request and agree that the resources involved in
caring for a patient with this condition are not aligned with those of
a CC. Therefore, we are not proposing a change to the severity level
for ICD-10-CM diagnosis code I50.812.
(3) Ascites in Alcoholic Liver Disease and Toxic Liver Disease
    We received a request to change the severity level for ICD-10-CM
diagnosis codes K70.11 (Alcoholic hepatitis with ascites), K70.31
(Alcoholic cirrhosis with ascites), and K71.51 (Toxic liver disease
with chronic active hepatitis with ascites) from a non-CC to a CC. The
requestor stated that these codes warrant CC classification because
providers are not currently compensated for the ascites treatment. We
used the approach outlined earlier to evaluate this request. The
following table contains the data that we used to evaluate this
request.

--------------------------------------------------------------------------------------------------------------------------------------------------------
     ICD-10-CM diagnosis code          Cnt1        C1        Cnt2        C2        Cnt3        C3       Current CC  subclass     Requested CC  subclass
--------------------------------------------------------------------------------------------------------------------------------------------------------
K70.11 Alcoholic hepatitis with           134     1.2952      1,940     2.3444      3,331     3.3635  non-CC..................  CC.
 ascites.
K70.31 Alcoholic cirrhosis with         1,634     1.1129     18,675     2.2301     26,822     3.2479  non-CC..................  CC.
 ascites.
K71.51 Toxic liver disease with            16     0.8913        218     2.1743        274     3.1418  non-CC..................  CC.
 chronic active hepatitis with
 ascites.
--------------------------------------------------------------------------------------------------------------------------------------------------------
    For ICD-10-CM diagnosis code K70.11, the data suggest that the
resources involved in caring for a patient with this condition are 29
percent greater than expected when the patient has either no other
secondary diagnosis present or all the other secondary diagnoses
present are non-CCs. The resources are 34 percent greater than expected
when reported in conjunction with another secondary diagnosis that is a
CC, and 36 percent greater than expected when reported in conjunction
with another secondary diagnosis code that is an MCC. Our clinical
advisors reviewed this request and agree that the resources involved in
caring for a patient with this condition are not aligned with those of
a CC. Therefore, we are not proposing a change to the severity level
for ICD-10-CM diagnosis code K70.11.
    For ICD-10-CM diagnosis code K70.31, the data suggest that the
resources involved in caring for a patient with this condition are 11
percent greater than expected when the patient has either no other
secondary diagnosis present or all the other secondary diagnoses
present are non-CCs. The resources are 23 percent greater than expected
when reported in conjunction with another secondary diagnosis that is a
CC, and 25 percent greater than expected when reported in conjunction
with another secondary diagnosis code that is an MCC. Our clinical
advisors reviewed this request and agree that the resources involved in
caring for a patient with this condition are not aligned with those of
a CC. Therefore, we are not proposing a change to the severity level
for ICD-10-CM diagnosis code K70.31.
    For ICD-10-CM diagnosis code K71.51, the data suggest that the
resources involved in caring for a patient with this condition are 11
percent lower than expected when the patient has either no other
secondary diagnosis present, or all the other secondary diagnoses
present are non-CCs. The resources are 17 percent greater than expected
when reported in conjunction with another secondary diagnosis that is a
CC, and 14 percent greater than expected when reported in conjunction
with another secondary diagnosis code that is an MCC. Our clinical
advisors reviewed this request and agree that the resources involved in
caring for a patient with this condition are not aligned with those of
a CC. Therefore, we are not proposing a change to the severity level
for ICD-10-CM diagnosis code K71.51.
(4) Factitious Disorder Imposed on Self
    We received a request to change the severity level for ICD-10-CM
diagnosis codes F68.11 (Factitious disorder imposed on self, with
predominantly psychological signs and symptoms) and F68.13 (Factitious
disorder imposed on self, with combined psychological and physical
signs and symptoms) from a
[[Page 19248]]
non-CC to a CC. The requestor stated that similar codes in the
classification are designated as a CC. We used the approach outlined
earlier to evaluate this request. The following table contains the data
that we used to evaluate this request.

--------------------------------------------------------------------------------------------------------------------------------------------------------
     ICD-10-CM diagnosis code          Cnt1        C1        Cnt2        C2        Cnt3        C3       Current CC  subclass     Requested CC  subclass
--------------------------------------------------------------------------------------------------------------------------------------------------------
F68.11 Factitious disorder imposed         16     1.2040         59     0.9979         15     3.2395  non-CC..................  CC.
 on self, with predominantly
 psychological signs and symptoms.
F68.13 Factitious disorder imposed          4     1.6226         32     1.9840         11     4.0000  non-CC..................  CC.
 on self, with combined
 psychological and physical signs
 and symptoms.
--------------------------------------------------------------------------------------------------------------------------------------------------------
    For ICD-10-CM diagnosis code F68.11, the number of patients found
in the September 2018 update of the FY 2018 MedPAR data in each of the
subsets is 16, 59, and 15, and for ICD-10-CM diagnosis code F68.13, the
number of patients in each of the subsets is 4, 32, and 11. Our
clinical advisors reviewed this request and believe that due to the
small number of cases in the data, it is not possible to use
statistical methods to evaluate the impact on resource use of patients.
Our clinical advisors also do not believe there is a clinical basis to
change the severity level in the absence of data. Our clinical advisors
noted that if a patient was diagnosed with either one of these ICD-10-
CM diagnoses (ICM-10-CM diagnosis code F68.11 or F68.13), there would
more than likely be another diagnosis code reported that identifies the
psychological and/or physical symptoms the patient is experiencing that
may be a better indicator of resources utilized because these patients
often fabricate their illness and inflict injuries on themselves to
receive attention. For example, a patient may cut his or her finger,
resulting in a wound which requires repair. It is the cut and need for
repair that contribute to the resources consumed in caring for a
patient with this diagnosis. Therefore, we are not proposing a change
to the severity level for ICD-10-CM diagnosis codes F68.11 and F68.13
at this time.
(5) Nonunion and Malunion of Physeal Metatarsal Fractures
    We received a request to change the severity level designations for
the following six ICD-10-CM diagnosis codes from a non-CC to a CC:
S99.101B (Unspecified physeal fracture of right metatarsal, initial
encounter for open fracture); S99.101K (Unspecified physeal fracture of
right metatarsal, subsequent encounter for fracture); S99.101P
(Unspecified physeal fracture of right metatarsal, subsequent encounter
for fracture with malunion); S99.132B (Salter-Harris Type III physeal
fracture of left metatarsal, initial encounter for open fracture),
S99.132K (Salter-Harris Type III physeal fracture of left metatarsal,
subsequent encounter for fracture with nonunion); and S99.132P (Salter-
Harris Type III physeal fracture of left metatarsal, subsequent
encounter for fracture with malunion with nonunion). The requestor
stated that similar codes for open fractures, nonunions, and malunions
of other sites currently are designated as CCs. However the requestor
did not provide the specific ICD-10-CM diagnosis codes that are
currently designated as CCs that the requestor believes are an
appropriate comparator. There are a considerable number of fractures,
nonunions, and malunions of other sites, some of which are designated
as CCs and others that are not. In particular, in evaluating this
request, we would want to review the appropriateness of designating
unspecified codes (that is, ICD-10-CM diagnosis codes S99.101B,
S99.101K, and S99.101P) as a CC, to avoid potentially discouraging more
detailed coding. In addition, none of the other ICD-10-CM diagnosis
codes describing Salter-Harris fractures (for example, ICD-10-CM
diagnosis codes in sub-subcategory S99.11- (Salter-Harris Type I
physeal fracture of metatarsal), S99.12- (Salter-Harris Type II physeal
fracture of metatarsal), S99.13- (Salter-Harris Type III physeal
fracture of metatarsal), and S99.14- (Salter-Harris Type IV physeal
fracture of metatarsal)) currently have a CC designation.
    Given the lack of supporting information for this request and
because we believe this request may require further research and
analysis to evaluate the relevant category of fracture codes and fully
assess the claims data, we are unable to fully evaluate this request
for FY 2020. Therefore, at this time, we are not proposing changes to
the severity level designations for ICD-10-CM diagnosis codes S99.101B,
S99.101K, S99.101P, S99.132B, S99.132K, and S99.132P as the requestor
recommended.
(6) Other Encephalopathy
    In the FY 2019 IPPS/LTCH PPS proposed rule (83 FR 20241), we
discussed a request that we had received to change the severity level
designation for ICD-10-CM diagnosis code G93.40 (Encephalopathy,
unspecified) from an MCC to a non-CC. We did not propose a change based
on the review of the claims data and input from our clinical advisors.
However, after a review of public comments in response to that
proposal, we finalized a change in the severity level designation for
ICD-10-CM diagnosis code G93.40 from an MCC to a CC (83 FR 41239).
    We received a request to reconsider the change in the severity
level designation for ICD-10-CM diagnosis code G93.49 (Other
encephalopathy) from an MCC to a CC, as reflected in Table 6I.2--
Deletions to the MCC List and Table 6J.--Complete CC List that were
associated with the FY 2019 IPPS/LTCH PPS final rule, because the
requestor noted this diagnosis code was not discussed in the FY 2019
IPPS/LTCH PPS proposed or final rules along with the discussion of
related ICD-10-CM diagnosis code G93.40. The requestor stated that
diagnosis code G93.49 warrants an MCC classification to accurately
reflect severity of illness and resources contributing to an extended
length of stay for patients who have this condition.
    Our clinical advisors reviewed the data for ICD-10-CM diagnosis
code G93.49 (Other encephalopathy) as set forth in the table below, and
noted that the C1 value is close to 2.0, which indicates that the
resource use is aligned with that of a CC, while the C2 value is about
halfway between 2.0 and 3.0, which is also consistent with the resource
use of a CC. They also compared the C1, C2, and C3 values of diagnosis
code G93.49 to those of diagnosis code G93.40, as also set forth in the
table below, and noted that the values were similar for both codes. Our
clinical advisors noted that similar to diagnosis code G93.40,
diagnosis code
[[Page 19249]]
G93.49 (Other encephalopathy) is poorly defined, not all
encephalopathies are MCCs, and the MCC status may create an incentive
for coding personnel to not pursue specificity of encephalopathy.
Therefore, they believe that these conditions are clinically similar
and should be assigned the same CC severity level status. Therefore, we
are not proposing any change to the severity level for ICD 10 CM
diagnosis code G93.49 (Other encephalopathy) for FY 2020.
----------------------------------------------------------------------------------------------------------------
           ICD-10-CM diagnosis code                Cnt1        C1        Cnt2        C2        Cnt3        C3
----------------------------------------------------------------------------------------------------------------
G93.40 (Encephalopathy, unspecified)..........     32,023      1.812    161,991      2.494    294,088      3.289
G93.49 (Other encephalopathy).................      4,258      1.758     23,203      2.536     40,836      3.349
----------------------------------------------------------------------------------------------------------------
(7) Obstetrics Chapter Codes
    We received a request to change the severity level for 94 ICD-10-CM
diagnosis codes in the Obstetrics chapter of the ICD-10-CM diagnosis
classification that describe a variety of complications of pregnancy,
childbirth and the puerperium. The requestor stated that the
reclassification of the 94 obstetric diagnosis codes would more
appropriately reflect severity of illness and accurate MS-DRG grouping
after CMS' FY 2019 creation of new obstetric MS-DRGs subdivided by
severity level (with MCC, with CC, and without CC/MCC).
    The 94 obstetrics codes associated with this request and their
current and requested severity level designation are shown in Table
6P.1e. associated with this proposed rule (which is available via the
internet on the CMS website at: http://www.cms.hhs.gov/Medicare/Medicare-Fee-for-Service-Payment/AcuteInpatientPPS/index.html). We are
proposing to move some of these diagnosis codes to a higher severity
level and some diagnosis codes to a lower severity level. Our proposals
are shown in the table below.
    Our clinical advisors indicated that the approach outlined
elsewhere in this section to evaluate requested changes to severity
levels, in which each diagnosis is evaluated using Medicare cost data
to determine the extent to which its presence as a secondary diagnosis
resulted in increased hospital resource use, could not be used to
evaluate this request because the number of obstetric patients in the
Medicare data was insufficient to perform evaluation using statistical
methods. Instead, our clinical advisors used their clinical judgment to
evaluate the requested changes to the severity levels for the 94
obstetrics diagnosis codes. Our clinical advisors concur with the
requestor that changes to the severity level for some of the obstetrics
diagnosis codes would more appropriately reflect severity of illness
and accurate MS-DRG grouping. Specifically, our clinical advisors
agreed with the requested change to severity from a non-CC to a CC for
10 of the diagnosis codes identified by the requestor because they
believe these conditions clinically warrant a CC designation. They
noted that 6 of the 10 diagnosis codes describe gestational diabetes
mellitus in pregnancy, gestational diabetes mellitus in childbirth, or
gestational diabetes mellitus in the puerperium requiring control,
either by insulin or oral hypoglycemic drugs and the condition would
require additional monitoring and resources in the inpatient setting.
They also noted that 2 of the 10 diagnosis codes describe maternal care
for other isoimmunization in the first trimester for single or multiple
gestations where the fetus is unspecified or fetus number 1 is
specified. They indicated that although there are additional diagnosis
codes describing maternal care for other isoimmunization in the first
trimester that uniquely identify fetus number 2 through fetus number 5,
as well as an ``other'' fetus beyond number 5, they do not believe
these other diagnosis codes have any additional impact on resource use
because treatment would be directed at the entire uterine cavity. They
further noted that 1 of the 10 diagnosis codes describes a conjoined
twin pregnancy in the third trimester and, while conjoined twins occur
rarely and carry a high risk of complications and mortality, they
believe the complexities are greatest in the third trimester. Lastly, 1
of the 10 diagnosis codes describes unspecified diabetes mellitus in
childbirth, and because the diagnosis codes describing unspecified
diabetes mellitus in pregnancy and unspecified diabetes mellitus in the
puerperium are designated as a CC, our clinical advisors agreed that
clinically, the condition occurring in childbirth warrants a CC
designation as well. Our clinical advisors also agreed with the
requested change to severity level from an MCC to a CC for 4 other
diagnosis codes identified by the requestor because, clinically, the CC
designation is consistent with the other diagnosis codes within those
diagnosis code families. For example, the diagnosis codes describing
preexisting type 1 diabetes mellitus in pregnancy, preexisting type 2
diabetes mellitus in pregnancy and unspecified preexisting diabetes
mellitus in pregnancy, regardless of trimester (first, second, third,
and unspecified) are all designated as CCs. Our clinical advisors
agreed that the diagnosis codes describing these same conditions ``in
childbirth'' also warrant a CC designation because the conditions do
not require additional resources or reflect a greater severity of
illness compared to the conditions when they occur ``in pregnancy''.
Therefore, we are proposing a change to the severity level for 14 ICD-
10-CM diagnosis codes as shown in the following table.
----------------------------------------------------------------------------------------------------------------
              ICD-10-CM diagnosis code                    Current CC  subclass          Proposed CC  subclass
----------------------------------------------------------------------------------------------------------------
O24.02 (Pre-existing type 1 diabetes mellitus, in    MCC..........................  CC.
 childbirth).
O24.12 (Pre-existing type 2 diabetes mellitus, in    MCC..........................  CC.
 childbirth).
O24.32 (Unspecified pre-existing diabetes mellitus   MCC..........................  CC.
 in childbirth).
O24.414 (Gestational diabetes mellitus in            Non-CC.......................  CC.
 pregnancy, insulin controlled).
O24.415 (Gestational diabetes mellitus in            Non-CC.......................  CC.
 pregnancy, controlled by oral hypoglycemic drugs).
O24.424 (Gestational diabetes mellitus in            Non-CC.......................  CC.
 childbirth, insulin controlled).
O24.425 (Gestational diabetes mellitus in            Non-CC.......................  CC.
 childbirth, controlled by oral hypoglycemic drugs).
O24.434 (Gestational diabetes mellitus in the        Non-CC.......................  CC.
 puerperium, insulin controlled).
O24.435 (Gestational diabetes mellitus in            Non-CC.......................  CC.
 puerperium, controlled by oral hypoglycemic drugs).
O24.82 (Other pre-existing diabetes mellitus in      MCC..........................  CC.
 childbirth).
O24.92 (Unspecified diabetes mellitus in             Non-CC.......................  CC.
 childbirth).
[[Page 19250]]

O30.023 (Conjoined twin pregnancy, third trimester)  Non-CC.......................  CC.
O36.1910 (Maternal care for other isoimmunization,   Non-CC.......................  CC.
 first trimester, not applicable or unspecified).
O36.1911 (Maternal care for other isoimmunization,   Non-CC.......................  CC.
 first trimester, fetus 1).
----------------------------------------------------------------------------------------------------------------
    Given the limited number of cases reporting ICD-10-CM obstetrical
codes in the Medicare claims data, we note that use of datasets other
than MedPAR cost data for future evaluation of severity level
designation for the ICD-10-CM diagnosis codes from the Obstetrics
chapter of the ICD-10-CM classification is under consideration.
e. Proposed Additions and Deletions to the Diagnosis Code Severity
Levels for FY 2020
    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 2020 and are available via the internet 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 2020;
    Table 6I.2--Proposed Deletions to the MCC List--FY 2020;
    Table 6J.1--Proposed Additions to the CC List--FY 2020; and
    Table 6J.2--Proposed Deletions to the CC List--FY 2020.
f. Proposed CC Exclusions List for FY 2020
    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;
     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.
    In this FY 2020 IPPS/LTCH PPS proposed rule, for FY 2020, we are
proposing changes to the ICD-10 MS-DRGs Version 37 CC Exclusion List.
Therefore, we have developed Table 6G.1.--Proposed Secondary Diagnosis
Order Additions to the CC Exclusions List--FY 2020; Table 6G.2.--
Proposed Principal Diagnosis Order Additions to the CC Exclusions
List--FY 2020; Table 6H.1.--Proposed Secondary Diagnosis Order
Deletions to the CC Exclusions List--FY 2020; and Table 6H.2.--Proposed
Principal Diagnosis Order Deletions to the CC Exclusions List--FY 2020.
For Table 6G.1, each secondary diagnosis code proposed for addition to
the CC Exclusion List is shown with an asterisk and the principal
diagnoses proposed 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 proposed 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 proposed 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
proposed 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 proposed
rule are available via the internet on the CMS website at: https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/AcuteInpatientPPS/index.html.
15. Proposed Changes to the ICD-10-CM and ICD-10-PCS Coding Systems
    To identify new, revised and deleted diagnosis and procedure codes,
for FY 2020, 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 proposed rule.
    These tables are not published in the Addendum to this proposed
rule but are available via the internet 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 proposed rule. As discussed in section II.F.18. of the
preamble of this proposed rule, the code titles are adopted as part of
the ICD-10 (previously ICD-9-CM) Coordination and Maintenance Committee
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.
    We are proposing the MDC and MS-DRG assignments for the new
diagnosis and procedure codes as set forth in Table 6A.--New Diagnosis
Codes and Table 6B.--New Procedure Codes. In addition, 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 procedure codes
are set forth in Table 6B.
    We are making available on the CMS website at https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/AcuteInpatientPPS/index.html
[[Page 19251]]
the following tables associated with this proposed rule:
     Table 6A.--New Diagnosis Codes--FY 2020;
     Table 6B.--New Procedure Codes--FY 2020;
     Table 6C.--Invalid Diagnosis Codes--FY 2020;
     Table 6D.--Invalid Procedure Codes--FY 2020;
     Table 6E.--Revised Diagnosis Code Titles--FY 2020;
     Table 6F.--Revised Procedure Code Titles--FY 2020;
     Table 6G.1.--Proposed Secondary Diagnosis Order Additions
to the CC Exclusions List--FY 2020;
     Table 6G.2.--Proposed Principal Diagnosis Order Additions
to the CC Exclusions List--FY 2020;
     Table 6H.1.--Proposed Secondary Diagnosis Order Deletions
to the CC Exclusions List--FY 2020;
     Table 6H.2.--Proposed Principal Diagnosis Order Deletions
to the CC Exclusions List--FY 2020;
     Table 6I.1.--Proposed Additions to the MCC List--FY 2020;
     Table 6I.2.-Proposed Deletions to the MCC List--FY 2020;
     Table 6J.1.--Proposed Additions to the CC List--FY 2020;
and
     Table 6J.2.--Proposed Deletions to the CC List--FY 2020.
16. Proposed 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 2019 IPPS/LTCH PPS final rule (83 FR 41220),
we made available the FY 2019 ICD-10 MCE Version 36 manual file. The
link to this MCE manual file, along with the link to the mainframe and
computer software for the MCE Version 36 (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.html.
    For this FY 2020 IPPS/LTCH PPS proposed rule, below we address the
MCE requests we received by the November 1, 2018 deadline. We also
discuss the proposals we are making based on our internal review and
analysis.
a. Age Conflict Edit: Maternity Diagnoses
    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 of 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 12-55 years inclusive (for
example, diabetes in pregnancy, antepartum pulmonary complication).
     Adult--Age range is 15-124 years inclusive (for example,
senile delirium, mature cataract).
    Under the ICD-10 MCE, the maternity diagnoses category for the Age
conflict edit considers the age range of 12 to 55 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.
    We received a request to reconsider the age range associated with
the maternity diagnoses category for the Age conflict edit. According
to the requestor, pregnancies can and do occur prior to age 12 and
after age 55. The requestor suggested that a more appropriate age range
would be from age 9 to age 64 for the maternity diagnoses category.
    We agree with the requestor that pregnancies can and do occur prior
to the age of 12 and after the age of 55. We also agree that the
suggested range, age 9 to age 64, is an appropriate age range.
Therefore, we are proposing to revise the maternity diagnoses category
for the Age conflict edit to consider the new age range of 9 to 64
years inclusive.
b. Sex Conflict Edit: Diagnoses for Females Only Edit
    In the MCE, the Sex conflict edit detects inconsistencies between a
patient's sex and any diagnosis or procedure on the patient's record;
for example, a male patient with cervical cancer (diagnosis) or a
female patient with a prostatectomy (procedure). In both instances, the
indicated diagnosis or the procedure conflicts with the stated sex of
the patient. Therefore, the patient's diagnosis, procedure, or sex is
presumed to be incorrect.
    As discussed in section II.F.15. of the preamble of this proposed
rule, Table 6A.--New Diagnosis Codes which is associated with this
proposed rule (and is available via the internet on the CMS website at:
https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/AcuteInpatientPPS/index.html) lists the new diagnosis codes that have
been approved to date which will be effective with discharges on and
after October 1, 2019. ICD-10-CM diagnosis code N99.85 (Post
endometrial ablation syndrome) is a new code that describes a condition
consistent with the female sex. We are proposing to add this diagnosis
code to the Diagnoses for Females Only edit code list under the Sex
conflict edit.
c. Unacceptable Principal Diagnosis Edit
    In the MCE, there are select codes that describe a circumstance
that 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 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.
    ICD-10-CM diagnosis codes I46.2 (Cardiac arrest due to underlying
cardiac condition) and I46.8 (Cardiac arrest due to other underlying
condition) are codes that clearly specify cardiac arrest as being due
to an underlying condition. Also, in the ICD-10-CM Tabular List, there
are instructional notes to ``Code first underlying cardiac condition''
at ICD-10-CM diagnosis code I46.2 and to ``Code first underlying
condition'' at ICD-10-CM diagnosis code I46.8. Therefore, we are
proposing to add ICD-10-CM diagnosis codes I46.2 and I46.8 to the
Unacceptable Principal Diagnosis Category edit code list.
    As discussed in section II.F.15. of the preamble of this proposed
rule, Table 6A.--New Diagnosis Codes associated with this proposed rule
(which is available via the internet on the CMS website at: https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/AcuteInpatientPPS/index.html) lists the new diagnosis
[[Page 19252]]
codes that have been approved to date that will be effective with
discharges occurring on and after October 1, 2019.
    We are proposing to add the new ICD-10-CM diagnosis codes listed in
the following table to the Unacceptable Principal Diagnosis Category
edit code list, as these codes are consistent with other ICD-10-CM
diagnosis codes currently included on the Unacceptable Principal
Diagnosis Category edit code list.
------------------------------------------------------------------------
      ICD-10-CM code                      Code description
------------------------------------------------------------------------
T50.915A..................  Adverse effect of multiple unspecified
                             drugs, medicaments and biological
                             substances, initial encounter.
T50.915D..................  Adverse effect of multiple unspecified
                             drugs, medicaments and biological
                             substances, subsequent encounter.
T50.915S..................  Adverse effect of multiple unspecified
                             drugs, medicaments and biological
                             substances, sequela.
T50.916A..................  Underdosing of multiple unspecified drugs,
                             medicaments and biological substances,
                             initial encounter.
T50.916D..................  Underdosing of multiple unspecified drugs,
                             medicaments and biological substances,
                             subsequent encounter.
T50.916S..................  Underdosing of multiple unspecified drugs,
                             medicaments and biological substances,
                             sequela.
Z11.7.....................  Encounter for testing for latent
                             tuberculosis infection.
Z22.7.....................  Latent tuberculosis.
Z71.84....................  Encounter for health counseling related to
                             travel.
Z86.002...................  Personal history of in-situ neoplasm of
                             other and unspecified genital organs.
Z86.003...................  Personal history of in-situ neoplasm of oral
                             cavity, esophagus and stomach.
Z86.004...................  Personal history of in-situ neoplasm of
                             other and unspecified digestive organs.
Z86.005...................  Personal history of in-situ neoplasm of
                             middle ear and respiratory system.
Z86.006...................  Personal history of melanoma in-situ.
------------------------------------------------------------------------
d. Non-Covered Procedure Edit
    In the MCE, the Non-Covered Procedure edit identifies procedures
for which Medicare does not provide payment. Payment is not provided
due to specific criteria that are established in the National Coverage
Determination (NCD) process. We refer readers to the website at:
https://www.cms.gov/Medicare/Coverage/Determination Process/
howtorequestanNCD.html for additional information on this process. In
addition, there are procedures that would normally not be paid by
Medicare but, due to the presence of certain diagnoses, are paid.
    As discussed in section II.F.15. of the preamble of this proposed
rule, Table 6D.--Invalid Procedure Codes associated with this proposed
rule (which is available via the internet on the CMS website at:
https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/AcuteInpatient PPS/index.html) lists the procedure codes that are no
longer effective as of October 1, 2019. Included in this table are the
following ICD-10-PCS procedure codes listed on the Non-Covered
Procedure edit code list.
------------------------------------------------------------------------
      ICD-10-PCS code                     Code description
------------------------------------------------------------------------
037G3Z6...................  Dilation of intracranial artery,
                             bifurcation, percutaneous approach.
037G4Z6...................  Dilation of intracranial artery,
                             bifurcation, percutaneous endoscopic
                             approach.
------------------------------------------------------------------------
    We are proposing to remove these codes from the Non-Covered
Procedure edit code list. In addition, as discussed in section
II.F.2.b. of the preamble of this proposed rule, a number of ICD-10-PCS
procedure codes describing bone marrow transplant procedures were the
subject of a proposal discussed at the March 5-6, 2019 ICD-10
Coordination and Maintenance Committee meeting, to be deleted effective
October 1, 2019. We are proposing that if the applicable proposal is
finalized, we would delete the subset of those ICD-10-PCS procedure
codes that are currently listed on the Non-Covered Procedure edit code
list as shown in the following table.
------------------------------------------------------------------------
      ICD-10-PCS code                     Code description
------------------------------------------------------------------------
30250G0...................  Transfusion of autologous bone marrow into
                             peripheral artery, open approach.
30250Y0...................  Transfusion of autologous hematopoietic stem
                             cells into peripheral artery, open
                             approach.
30253G0...................  Transfusion of autologous bone marrow into
                             peripheral artery, percutaneous approach.
30253Y0...................  Transfusion of autologous hematopoietic stem
                             cells into peripheral artery, percutaneous
                             approach.
30260G0...................  Transfusion of autologous bone marrow into
                             central artery, open approach.
30260Y0...................  Transfusion of autologous hematopoietic stem
                             cells into central artery, open approach.
30263G0...................  Transfusion of autologous bone marrow into
                             central artery, percutaneous approach.
30263Y0...................  Transfusion of autologous hematopoietic stem
                             cells into central artery, percutaneous
                             approach.
------------------------------------------------------------------------
e. Future Enhancement
    In the FY 2018 IPPS/LTCH PPS final rule (82 FR 38053 through
38054), we noted the importance of ensuring accuracy of the coded data
from the reporting, collection, processing, coverage, payment, and
analysis aspects. We have engaged a contractor to assist in the review
of the limited coverage and noncovered procedure edits in the MCE that
may also be present in other claims processing systems that are
utilized by our MACs. The MACs must adhere to criteria specified within
the National Coverage Determinations (NCDs) and may implement their own
edits in addition to what are already incorporated into the MCE,
resulting in duplicate edits. The objective of this review is to
identify where duplicate edits may exist and to determine what the
impact might be if these edits were to be removed from the MCE.
    We have noted that the purpose of the MCE is to ensure that errors
and inconsistencies in the coded data are recognized during Medicare
claims processing. As we indicated in the FY 2019 IPPS/LTCH PPS final
rule (83 FR
[[Page 19253]]
41228), we are considering whether the inclusion of coverage edits in
the MCE necessarily aligns with that specific goal because the focus of
coverage edits is on whether or not a particular service is covered for
payment purposes and not whether it was coded correctly.
    As we continue to evaluate the purpose and function of the MCE with
respect to ICD-10, we encourage public input for future discussion. As
we have discussed in prior rulemaking, we recognize a need to further
examine the current list of edits and the definitions of those edits.
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 MS-DRG Classification Change Mailbox located at:
[email protected] by November 1, 2019 for the FY
2021 rulemaking.
17. Proposed 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.
    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 proposed 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 are proposing to make in this FY 2020
IPPS/LTCH PPS proposed rule, as discussed in section II.F.5. of this
preamble of this proposed rule, we are proposing to revise the surgical
hierarchy for MDC 5 (Diseases and Disorders of the Circulatory System)
as follows: In MDC 5, we are proposing to sequence proposed new MS-DRGs
319 and 320 (Other Endovascular Cardiac Valve Procedures with and
without MCC, respectively) above 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) and below MS-DRGs 266 and 267 (Endovascular Cardiac Valve
Replacement with and without MCC, respectively). We also note that, as
discussed in section II.F.5.a. of this preamble of this proposed rule,
we are proposing to revise the titles for MS-DRGs 266 and 267 to
``Endovascular Cardiac Valve Replacement and Supplement Procedures with
MCC'' and ``Endovascular Cardiac Valve Replacement and Supplement
Procedures without 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 37 is
illustrated in the following table.
                   Proposed Surgical Hierarchy: MDC 5
------------------------------------------------------------------------

------------------------------------------------------------------------
MS-DRG 215.............................  Other Heart Assist System
                                          Implant.
MS-DRGs 216-221........................  Cardiac Valve and Other Major
                                          Cardiothoracic Procedures.
MS-DRGs 266 and 267....................  Endovascular Cardiac Valve
                                          Procedures.
Proposed New MS-DRGs 319 and 320.......  Other Endovascular Cardiac
                                          Valve Procedures.
MS-DRGs 222-227........................  Cardiac Defibrillator Implant.
------------------------------------------------------------------------
[[Page 19254]]
    As with other MS-DRG related issues, we encourage commenters to
submit requests to examine ICD-10 claims pertaining to the surgical
hierarchy via the CMS MS-DRG Classification Change Request Mailbox
located at: [email protected] by November 1, 2019
for consideration for FY 2021.
18. 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 National Center for Health Statistics (NCHS), the
Centers for Disease Control and Prevention (CDC), 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: http://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: http://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 Committee encourages participation in the previously mentioned
process by health-related organizations. 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 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 at the public
meetings and in writing, the Committee formulates recommendations,
which then must be approved by the agencies.
    The Committee presented proposals for coding changes for
implementation in FY 2020 at a public meeting held on September 11-12,
2018, and finalized the coding changes after consideration of comments
received at the meetings and in writing by November 13, 2018.
    The Committee held its 2019 meeting on March 5-6, 2019. The
deadline for submitting comments on these code proposals is scheduled
for April 5, 2019. 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 May 2019 would be included in the October 1, 2019 update to the
ICD-10-CM diagnosis and ICD-10-PCS procedure code sets. As discussed in
earlier sections of the preamble of this proposed 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 proposed rule, which
are available via the internet on the CMS website at: http://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/AcuteInpatientPPS/index.html. The code titles are adopted as part of
the ICD-10 (previously ICD-9-CM) Coordination and Maintenance Committee
process. Therefore, although we make the code titles available for the
IPPS proposed rule, they are not subject to comment in the proposed
rule. Because of the length of these tables, they are not published in
the Addendum to the proposed rule. Rather, they are available via the
internet as discussed in section VI. of the Addendum to this proposed
rule.
    Live Webcast recordings of the discussions of the diagnosis and
procedure codes at the Committee's September 11-12, 2018 meeting can be
obtained from the CMS website at: http://cms.hhs.gov/Medicare/Coding/ICD9ProviderDiagnosticCodes/index.html?redirect=/icd9ProviderDiagnosticCodes/03_meetings.asp. The live webcast
recordings of the discussions of the diagnosis and procedure codes at
the Committee's March 5-6, 2019 meeting can be obtained from the CMS
website at: https://www.cms.gov/Medicare/Coding/ICD10/C-and-M-Meeting-Materials.html.
    The materials for the discussions relating to diagnosis codes at
the September 11-12 2018 meeting and March 5-6, 2019 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, attending a Committee
meeting, and timeline requirements and meeting dates.
    We encourage commenters to address suggestions on coding issues
involving diagnosis codes to: Donna Pickett, Co-Chairperson, ICD-10
Coordination and Maintenance Committee, NCHS, Room 2402, 3311 Toledo
Road, Hyattsville, MD 20782. Comments may be sent by Email to:
[email protected].
    Questions and comments concerning the procedure codes should be
submitted via Email to: ICDProcedure [email protected].
    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) 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
[[Page 19255]]
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.
    While section 1886(d)(5)(K)(vii) of the Act states that the
addition of new diagnosis and procedure codes on April 1 of each year
shall not require the Secretary to adjust the payment, or DRG
classification, under section 1886(d) of the Act until the fiscal year
that begins after such date, we have to update the DRG software and
other systems in order to recognize and accept the new codes. We also
publicize the code changes and the need for a mid-year systems update
by providers to identify the new codes. Hospitals also have to obtain
the new code books and encoder updates, and make other system changes
in order to identify and report the new codes.
    The ICD-10 (previously the ICD-9-CM) Coordination and Maintenance
Committee holds its meetings in the spring and fall in order to update
the codes and the applicable payment and reporting systems by October 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. 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. This
5-month time period has proved to be necessary for hospitals and other
providers to update their systems.
    A discussion of this timeline and the need for changes are included
in the December 4-5, 2005 ICD-9-CM Coordination and Maintenance
Committee Meeting minutes. The public agreed that there was a need to
hold the fall meetings earlier, in September or October, in order to
meet the new implementation dates. The public provided comment that
additional time would be needed to update hospital systems and obtain
new code books and coding software. There was considerable concern
expressed about the impact this April update would have on providers.
    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
are considered for an April 1 update if a strong and convincing case is
made by the requestor at the Committee's public meeting. The request
must identify the reason why a new code is needed in April for purposes
of the new technology process. The participants at the meeting and
those reviewing the Committee meeting materials and live webcast are
provided the opportunity to comment on this expedited request. All
other topics are considered for the October 1 update. Participants at
the Committee meeting are encouraged to comment on all such requests.
There were not any requests approved for an expedited April l, 2019
implementation of a code at the September 11-12, 2018 Committee
meeting. Therefore, there were not any new codes for implementation on
April 1, 2019.
    ICD-9-CM addendum and code title information is published on the
CMS website at: http://www.cms.hhs.gov/Medicare/Coding/ICD9ProviderDiagnosticCodes/index.html?redirect=/icd9ProviderDiagnosticCodes/01overview.asp#TopofPage. ICD-10-CM and
ICD-10-PCS addendum and code title information is published on the CMS
website at: http://www.cms.gov/Medicare/Coding/ICD10/index.html. CMS
also sends copies of 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 also be found on the CDC website at:
http://www.cdc.gov/nchs/icd/icd10.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. AHA also distributes coding update information to publishers
and software vendors.
    The following chart shows the number of ICD-10-CM and ICD-10-PCS
codes and code changes since FY 2016 when ICD-10 was implemented.
  Total Number of Codes and Changes in Total Number of Codes per Fiscal
                   Year ICD-10-CM and ICD-10-PCS Codes
------------------------------------------------------------------------
                     Fiscal year                       Number    Change
------------------------------------------------------------------------
FY 2016:
  ICD-10-CM.........................................    69,823  ........
  ICD-10-PCS........................................    71,974  ........
FY 2017:
  ICD-10-CM.........................................    71,486    +1,663
  ICD-10-PCS........................................    75,789    +3,815
FY 2018:
  ICD-10-CM.........................................    71,704      +218
  ICD-10-PCS........................................    78,705    +2,916
FY 2019:
  ICD-10-CM.........................................    71,932      +228
  ICD-10-PCS........................................    78,881      +176
FY 2020 (Proposed):
  ICD-10-CM.........................................    72,184      +252
  ICD-10-PCS........................................    77,221    -1,660
------------------------------------------------------------------------
    As mentioned 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.
19. 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. Proposed Changes for FY 2020
    As discussed in section II.F.5.a. of the preamble of this proposed
rule, for FY 2020, we are proposing to create new MS-DRGs 319 and 320
(Other Endovascular Cardiac Valve Procedures with and without MCC,
respectively) and to revise the title for MS-DRG 266 from
``Endovascular Cardiac Valve Replacement with MCC'' to
[[Page 19256]]
``Endovascular Cardiac Valve Replacement and Supplement Procedures with
MCC'' and the title for MS-DRG 267 from ``Endovascular Cardiac Valve
Replacement without MCC'' to ``Endovascular Cardiac Valve Replacement
and Supplement Procedures without MCC''.
    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 216 through 221 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 table below. A subset of
the procedures currently assigned to MS-DRGs 216 through 221 is being
proposed for assignment to proposed new MS-DRGs 319 and 320. Therefore,
we are proposing that if the applicable proposed MS-DRG changes are
finalized, we also would add proposed new MS-DRGs 319 and 320 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 the titles of MS-DRGs 266 and 267 as reflected in
the table below. We also are proposing to continue to include the
existing MS-DRGs currently subject to the policy as also displayed in
the table below.
------------------------------------------------------------------------
            MDC                 MS-DRG              MS-DRG title
------------------------------------------------------------------------
Pre-MDC...................             001  Heart Transplant or Implant
                                             of Heart Assist System with
                                             MCC.
Pre-MDC...................             002  Heart Transplant or Implant
                                             of Heart Assist System
                                             without MCC.
1.........................             023  Craniotomy with Major Device
                                             Implant or Acute Complex
                                             CNS Principal Diagnosis
                                             with MCC or Chemotherapy
                                             Implant or Epilepsy with
                                             Neurostimulator.
1.........................             024  Craniotomy with Major Device
                                             Implant or Acute Complex
                                             CNS Principal Diagnosis
                                             without MCC.
1.........................             025  Craniotomy & Endovascular
                                             Intracranial Procedures
                                             with MCC.
1.........................             026  Craniotomy & Endovascular
                                             Intracranial Procedures
                                             with CC.
1.........................             027  Craniotomy & Endovascular
                                             Intracranial Procedures
                                             without CC/MCC.
1.........................             040  Peripheral, Cranial Nerve &
                                             Other Nervous System
                                             Procedures with MCC.
1.........................             041  Peripheral, Cranial Nerve &
                                             Other Nervous System
                                             Procedures with CC or
                                             Peripheral Neurostimulator.
1.........................             042  Peripheral, Cranial Nerve &
                                             Other Nervous System
                                             Procedures without CC/MCC.
3.........................             129  Major Head & Neck Procedures
                                             with CC/MCC or Major
                                             Device.
3.........................             130  Major Head & Neck Procedures
                                             without CC/MCC.
5.........................             215  Other Heart Assist System
                                             Implant.
5.........................             216  Cardiac Valve & Other Major
                                             Cardiothoracic Procedure
                                             with Cardiac
                                             Catheterization with MCC.
5.........................             217  Cardiac Valve & Other Major
                                             Cardiothoracic Procedure
                                             with Cardiac
                                             Catheterization with CC.
5.........................             218  Cardiac Valve & Other Major
                                             Cardiothoracic Procedure
                                             with Cardiac
                                             Catheterization without CC/
                                             MCC.
5.........................             219  Cardiac Valve & Other Major
                                             Cardiothoracic Procedure
                                             without Cardiac
                                             Catheterization with MCC.
5.........................             220  Cardiac Valve & Other Major
                                             Cardiothoracic Procedure
                                             without Cardiac
                                             Catheterization with CC.
5.........................             221  Cardiac Valve & Other Major
                                             Cardiothoracic Procedure
                                             without Cardiac
                                             Catheterization without CC/
                                             MCC.
5.........................             222  Cardiac Defibrillator
                                             Implant with Cardiac
                                             Catheterization with AMI/
                                             Heart Failure/Shock with
                                             MCC.
5.........................             223  Cardiac Defibrillator
                                             Implant with Cardiac
                                             Catheterization with AMI/
                                             Heart Failure/Shock without
                                             MCC.
5.........................             224  Cardiac Defibrillator
                                             Implant with Cardiac
                                             Catheterization without AMI/
                                             Heart Failure/Shock with
                                             MCC.
5.........................             225  Cardiac Defibrillator
                                             Implant with Cardiac
                                             Catheterization without AMI/
                                             Heart Failure/Shock without
                                             MCC.
5.........................             226  Cardiac Defibrillator
                                             Implant without Cardiac
                                             Catheterization with MCC.
5.........................             227  Cardiac Defibrillator
                                             Implant without Cardiac
                                             Catheterization without
                                             MCC.
5.........................             242  Permanent Cardiac Pacemaker
                                             Implant with MCC.
5.........................             243  Permanent Cardiac Pacemaker
                                             Implant with CC.
5.........................             244  Permanent Cardiac Pacemaker
                                             Implant without CC/MCC.
5.........................             245  AICD Generator Procedures.
5.........................             258  Cardiac Pacemaker Device
                                             Replacement with MCC.
5.........................             259  Cardiac Pacemaker Device
                                             Replacement without MCC.
5.........................             260  Cardiac Pacemaker Revision
                                             Except Device Replacement
                                             with MCC.
5.........................             261  Cardiac Pacemaker Revision
                                             Except Device Replacement
                                             with CC.
5.........................             262  Cardiac Pacemaker Revision
                                             Except Device Replacement
                                             without CC/MCC.
5.........................             265  AICD Lead Procedures.
5.........................             266  Endovascular Cardiac Valve
                                             Replacement and Supplement
                                             Procedures with MCC.
5.........................             267  Endovascular Cardiac Valve
                                             Replacement and Supplement
                                             Procedures without MCC.
5.........................             268  Aortic and Heart Assist
                                             Procedures Except Pulsation
                                             Balloon with MCC.
5.........................             269  Aortic and Heart Assist
                                             Procedures Except Pulsation
                                             Balloon without MCC.
5.........................             270  Other Major Cardiovascular
                                             Procedures with MCC.
5.........................             271  Other Major Cardiovascular
                                             Procedures with CC.
5.........................             272  Other Major Cardiovascular
                                             Procedures without CC/MCC.
5.........................             319  Other Endovascular Cardiac
                                             Valve Procedures with MCC.
5.........................             320  Other Endovascular Cardiac
                                             Valve Procedures without
                                             MCC.
8.........................             461  Bilateral or Multiple Major
                                             Joint Procedures of Lower
                                             Extremity with MCC.
8.........................             462  Bilateral or Multiple Major
                                             Joint Procedures of Lower
                                             Extremity without MCC.
8.........................             466  Revision of Hip or Knee
                                             Replacement with MCC.
8.........................             467  Revision of Hip or Knee
                                             Replacement with CC.
8.........................             468  Revision of Hip or Knee
                                             Replacement without CC/MCC.
8.........................             469  Major Hip and Knee Joint
                                             Replacement or Reattachment
                                             of Lower Extremity with MCC
                                             or Total Ankle Replacement.
8.........................             470  Major Hip and Knee Joint
                                             Replacement or Reattachment
                                             of Lower Extremity without
                                             MCC.
------------------------------------------------------------------------
    The final list of MS-DRGs subject to the IPPS policy for replaced
devices offered without cost or with a credit will be included in the
FY 2020 IPPS/LTCH PPS final rule and also will be issued to
[[Page 19257]]
providers in the form of a Change Request (CR).
G. Recalibration of the Proposed FY 2020 MS-DRG Relative Weights
1. Data Sources for Developing the Proposed Relative Weights
    In developing the proposed FY 2020 system of weights, we are
proposing to use two data sources: Claims data and cost report data. As
in previous years, the claims data source is the MedPAR file. This file
is based on fully coded diagnostic and procedure data for all Medicare
inpatient hospital bills. The FY 2018 MedPAR data used in this proposed
rule include discharges occurring on October 1, 2017, through September
30, 2018, based on bills received by CMS through December 31, 2018,
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 2018 MedPAR file used in calculating the proposed
relative weights includes data for approximately 9,480,820 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 31,
2018 update of the FY 2018 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 proposed relative weights for FY 2020 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 proposed FY 2020 relative weights are
based on the ICD-10-CM diagnosis codes and ICD-10-PCS procedure codes
from the FY 2018 MedPAR claims data, grouped through the ICD-10 version
of the proposed FY 2020 GROUPER (Version 37).
    The second data source used in the cost-based relative weighting
methodology is the Medicare cost report data files from the HCRIS.
Normally, we use the HCRIS dataset that is 3 years prior to the IPPS
fiscal year. Specifically, we used cost report data from the December
31, 2018 update of the FY 2017 HCRIS for calculating the proposed FY
2020 cost-based relative weights.
2. Methodology for Calculation of the Proposed Relative Weights
    As we explain in section II.E.2. of the preamble of this proposed
rule, we calculated the proposed FY 2020 relative weights based on 19
CCRs, as we did for FY 2019. The methodology we are proposing to use to
calculate the FY 2020 MS-DRG cost-based relative weights based on
claims data in the FY 2018 MedPAR file and data from the FY 2017
Medicare cost reports is as follows:
     To the extent possible, all the claims were regrouped
using the proposed FY 2020 MS-DRG classifications discussed in sections
II.B. and II.F. of the preamble of this proposed rule.
     The transplant cases that were used to establish the
proposed 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 2018 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.
     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, CT scan charges, and MRI charges were also
deleted.
     At least 92.3 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 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
[[Page 19258]]
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: http://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 Bundled
Payments for Care Improvement (BPCI) Advanced model started on October
1, 2018. The BPCI Advanced model, tested under the authority of section
3021 of the Affordable Care Act (codified at 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 2019, and consistent with how we have treated hospitals
that participated in the BPCI Initiative, for FY 2020, 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 above, these hospitals are still receiving IPPS payments under
section 1886(d) of the Act.
    The charges for each of the proposed 19 cost groups for each claim
were standardized to remove the effects of differences in proposed area
wage levels, IME and DSH payments, and for hospitals located in Alaska
and Hawaii, the applicable proposed 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
proposed 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 proposed 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 2017 cost report
data.
    The proposed 19 cost centers that we used in the proposed relative
weight calculation are shown in the following table. The table shows
the lines on the cost report and the corresponding revenue codes that
we used to create the proposed 19 national cost center CCRs. If
stakeholders have comments about the groupings in this table, we may
consider those comments as we finalize our policy.
    We are inviting public comments on our proposals related to
recalibration of the proposed FY 2020 relative weights and the changes
in relative weights from FY 2019.
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3. Development of Proposed National Average CCRs
    We developed the proposed national average CCRs as follows:
    Using the FY 2017 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. We then created CCRs for each provider for each cost
center (see prior table for line items used in the calculations) and
removed any CCRs that were greater
[[Page 19272]]
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. We then 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 proposed 19 cost centers by the corresponding national average CCR,
we summed the 19 ``costs'' across each proposed MS-DRG to produce a
total standardized cost for the proposed MS-DRG. The average
standardized cost for each proposed MS-DRG was then computed as the
total standardized cost for the proposed MS-DRG divided by the
transfer-adjusted case count for the proposed MS-DRG. The average cost
for each proposed MS-DRG was then divided by the national average
standardized cost per case to determine the proposed relative weight.
    The proposed FY 2020 cost-based relative weights were then
normalized by a proposed adjustment factor of 1.788337 so that the
average case weight after recalibration was equal to the average case
weight before recalibration. The proposed 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.
    The proposed 19 national average CCRs for FY 2020 are as follows:
------------------------------------------------------------------------
                          Group                                 CCR
------------------------------------------------------------------------
Routine Days............................................           0.433
Intensive Days..........................................           0.362
Drugs...................................................           0.191
Supplies & Equipment....................................           0.301
Implantable Devices.....................................           0.308
Therapy Services........................................           0.297
Laboratory..............................................           0.109
Operating Room..........................................           0.175
Cardiology..............................................           0.099
Cardiac Catheterization.................................           0.106
Radiology...............................................           0.140
MRIs....................................................           0.073
CT Scans................................................           0.035
Emergency Room..........................................           0.154
Blood and Blood Products................................           0.282
Other Services..........................................           0.344
Labor & Delivery........................................           0.369
Inhalation Therapy......................................           0.151
Anesthesia..............................................           0.077
------------------------------------------------------------------------
    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
threshold of 10 cases as the minimum number of cases required to
compute a reasonable weight. We are proposing to use that same case
threshold in recalibrating the proposed MS-DRG relative weights for FY
2020. Using data from the FY 2018 MedPAR file, there were 8 MS-DRGs
that contain fewer than 10 cases. For FY 2020, because we do not have
sufficient MedPAR data to set accurate and stable cost relative weights
for these low-volume MS-DRGs, we are proposing to compute relative
weights for the proposed low-volume MS-DRGs by adjusting their final FY
2019 relative weights by the percentage change in the average weight of
the cases in other MS-DRGs from FY 2019 to FY 2020. The crosswalk table
is shown below.
------------------------------------------------------------------------
    Low-volume  MS-DRG         MS-DRG title        Crosswalk to MS-DRG
------------------------------------------------------------------------
338......................  Appendectomy with    Final FY 2019 relative
                            Complicated          weight (adjusted by
                            Principal            percent change in
                            Diagnosis with MCC.  average weight of the
                                                 cases in other MS-
                                                 DRGs).
789......................  Neonates, Died or    Final FY 2019 relative
                            Transferred to       weight (adjusted by
                            Another Acute Care   percent change in
                            Facility.            average weight of the
                                                 cases in other MS-
                                                 DRGs).
790......................  Extreme Immaturity   Final FY 2019 relative
                            or Respiratory       weight (adjusted by
                            Distress Syndrome,   percent change in
                            Neonate.             average weight of the
                                                 cases in other MS-
                                                 DRGs).
791......................  Prematurity with     Final FY 2019 relative
                            Major Problems.      weight (adjusted by
                                                 percent change in
                                                 average weight of the
                                                 cases in other MS-
                                                 DRGs).
792......................  Prematurity without  Final FY 2019 relative
                            Major Problems.      weight (adjusted by
                                                 percent change in
                                                 average weight of the
                                                 cases in other MS-
                                                 DRGs).
793......................  Full-Term Neonate    Final FY 2019 relative
                            with Major           weight (adjusted by
                            Problems.            percent change in
                                                 average weight of the
                                                 cases in other MS-
                                                 DRGs).
794......................  Neonate with Other   Final FY 2019 relative
                            Significant          weight (adjusted by
                            Problems.            percent change in
                                                 average weight of the
                                                 cases in other MS-
                                                 DRGs).
795......................  Normal Newborn.....  Final FY 2019 relative
                                                 weight (adjusted by
                                                 percent change in
                                                 average weight of the
                                                 cases in other MS-
                                                 DRGs).
------------------------------------------------------------------------
H. Proposed Add-On Payments for New Services and Technologies for FY
2020
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. We note that,
beginning with discharges occurring in FY 2008, CMS transitioned from
CMS-DRGs to MS-DRGs. The regulations at 42 CFR 412.87 implement these
provisions and specify 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
[[Page 19273]]
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. Below 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 a complete 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).
    Under the first criterion, as reflected in Sec.  412.87(b)(2), a
specific medical service or technology will be considered ``new'' for
purposes of new medical service or technology add-on payments until
such time as Medicare data are available to fully reflect the cost of
the technology in the MS-DRG weights through recalibration. 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: (1) Whether a product
uses the same or a similar mechanism of action to achieve a therapeutic
outcome; (2) whether a product is assigned to the same or a different
MS-DRG; and (3) whether 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).
    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 for
cases involving the new technology exceed certain threshold amounts.
The MS-DRG threshold amounts used in evaluating new technology add-on
payment applications for FY 2020 are presented in a data file that is
available, along with the other data files associated with the FY 2019
IPPS/LTCH PPS final rule and correction notice, on the CMS website at:
https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/AcuteInpatientPPS/FY2019-IPPS-Final-Rule-Home-Page-Items/FY2019-IPPS-Final-Rule-Data-Files.html?DLPage=1&DLEntries=10&DLSort=0&DLSortDir=ascending. 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 2021 are
presented in a data file that is available on the CMS website, along
with the other data files associated with this FY 2020 proposed rule,
by clicking on the FY 2020 IPPS Proposed Rule Home Page at: https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/AcuteInpatientPPS/index.html.
    In the September 7, 2001 final rule that established the new
technology add-on payment regulations (66 FR 46917), we discussed 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 complete information on this
issue.
    Under the third criterion, Sec.  412.87(b)(1) of our existing
regulations provides that a new technology is an appropriate candidate
for an additional payment when it represents an advance that
substantially improves, relative to technologies previously available,
the diagnosis or treatment of Medicare beneficiaries. For example, a
new technology represents a substantial clinical improvement when it
reduces mortality, decreases the number of hospitalizations or
physician visits, or reduces recovery time compared to the technologies
previously available. (We refer readers to the September 7, 2001 final
rule for a more detailed discussion of this criterion (66 FR 46902). We
also refer readers to section II.H.8. of the preamble of this proposed
rule for a discussion of our proposed alternative inpatient new
technology add-on payment pathway for transformative new devices.)
    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. Under Sec.
412.88, if the costs of the discharge (determined by applying 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), Medicare will make an add-on payment equal to the lesser of:
(1) 50 percent of the estimated costs of the new technology or medical
service (if the estimated costs for the case including the new
technology or medical service exceed Medicare's payment); or (2) 50
percent of the difference between the full DRG payment and the
hospital's estimated cost for the case. Unless the discharge qualifies
for an outlier payment, the additional Medicare payment is limited to
the full MS-DRG payment plus 50 percent of the estimated costs of the
new technology or medical service. We refer readers to section II.H.9.
of the preamble of this proposed rule for a discussion of our proposed
change to the calculation of the new technology add-on payment
beginning in FY 2020, including our proposed amendments to Sec.  412.88
of the regulations.
    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 later years have not been subjected to budget neutrality.
    In the FY 2009 IPPS final rule (73 FR 48561 through 48563), we
modified our regulations at Sec.  412.87 to codify our longstanding
practice of how CMS evaluates the eligibility criteria for new
[[Page 19274]]
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 amended Sec.  412.87(c) to specify 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.
    The Council on Technology and Innovation (CTI) at CMS oversees the
agency's cross-cutting priority on coordinating coverage, coding and
payment processes for Medicare with respect to new technologies and
procedures, including new drug therapies, as well as promoting the
exchange of information on new technologies and medical services
between CMS and other entities. The CTI, composed of senior CMS staff
and clinicians, was established under section 942(a) of Public Law 108-
173. The Council is co-chaired by the Director of the Center for
Clinical Standards and Quality (CCSQ) and the Director of the Center
for Medicare (CM), who is also designated as the CTI's Executive
Coordinator.
    The specific processes for coverage, coding, and payment are
implemented by CM, CCSQ, and the local Medicare Administrative
Contractors (MACs) (in the case of local coverage and payment
decisions). The CTI supplements, rather than replaces, these processes
by working to assure that all of these activities reflect the agency-
wide priority to promote high-quality, innovative care. At the same
time, the CTI also works to streamline, accelerate, and improve
coordination of these processes to ensure that they remain up to date
as new issues arise. To achieve its goals, the CTI works to streamline
and create a more transparent coding and payment process, improve the
quality of medical decisions, and speed patient access to effective new
treatments. It is also dedicated to supporting better decisions by
patients and doctors in using Medicare-covered services through the
promotion of better evidence development, which is critical for
improving the quality of care for Medicare beneficiaries.
    To improve the understanding of CMS' processes for coverage,
coding, and payment and how to access them, the CTI has developed an
``Innovator's Guide'' to these processes. The intent is to consolidate
this information, much of which is already available in a variety of
CMS documents and in various places on the CMS website, in a user
friendly format. This guide was published in 2010 and is available on
the CMS website at: https://www.cms.gov/Medicare/Coverage/CouncilonTechInnov/Downloads/Innovators-Guide-Master-7-23-15.pdf.
    As we indicated in the FY 2009 IPPS final rule (73 FR 48554), we
invite any product developers or manufacturers of new medical services
or technologies to contact the agency early in the process of product
development if they have questions or concerns about the evidence that
would be needed later in the development process for the agency's
coverage decisions for Medicare.
    The CTI aims to provide useful information on its activities and
initiatives to stakeholders, including Medicare beneficiaries,
advocates, medical product manufacturers, providers, and health policy
experts. Stakeholders with further questions about Medicare's coverage,
coding, and payment processes, or who want further guidance about how
they can navigate these processes, can contact the CTI at
[email protected].
    We note that applicants for add-on payments for new medical
services or technologies for FY 2021 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, along with a significant
sample of data to demonstrate that the medical service or technology
meets the high-cost threshold. 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 2021, the CMS website also will post the tracking
forms completed by each applicant. 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; it is currently approved
under OMB control number 0938-1347, which expires on December 31, 2020.
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 or advancement. The process for evaluating new
medical service and technology applications requires the Secretary to--
     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 technology represents a substantial
clinical improvement; and
     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 2020 prior
to publication of this FY 2020 IPPS/LTCH PPS proposed rule, we
published a notice in the Federal Register on October 5, 2018 (83 FR
50379), and held a town hall meeting at the CMS Headquarters Office in
Baltimore, MD, on December 4, 2018. 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 each of the FY 2020 new medical service and technology
add-on payment applications before the publication of the FY 2020 IPPS/
LTCH PPS proposed rule.
    Approximately 100 individuals registered to attend the town hall
meeting in person, while additional individuals listened over an open
[[Page 19275]]
telephone line. We also live-streamed the town hall meeting and posted
the morning and afternoon sessions of the town hall on the CMS YouTube
web page at: https://www.youtube.com/watch?v=4z1AhEuGHqQ and https://www.youtube.com/watch?v=m26Xj1EzbIY, respectively. We considered each
applicant's presentation made at the town hall meeting, as well as
written comments submitted on the applications that were received by
the due date of December 14, 2018, in our evaluation of the new
technology add-on payment applications for FY 2020 in this FY 2020
IPPS/LTCH PPS proposed rule.
    In response to the published notice and the December 4, 2018 New
Technology Town Hall meeting, we received written comments regarding
the applications for FY 2020 new technology add-on payments. We note
that we do not summarize comments that are unrelated to the
``substantial clinical improvement'' criterion. As explained earlier
and in the Federal Register notice announcing the New Technology Town
Hall meeting (83 FR 50379 through 50381), the purpose of the meeting
was specifically to discuss the substantial clinical improvement
criterion in regard to pending new technology add-on payment
applications for FY 2020. Therefore, we are not summarizing those
written comments in this proposed rule that are unrelated to the
substantial clinical improvement criterion. In section II.H.5. of the
preamble of this FY 2020 IPPS/LTCH PPS proposed rule, we are
summarizing comments regarding individual applications, or, if
applicable, indicating that there were no comments received in response
to the New Technology Town Hall meeting notice, at the end of each
discussion of the individual applications.
    Comment: One commenter expressed appreciation for CMS' statements
in the FY 2019 IPPS/LTCH PPS proposed rule (83 FR 20278 through 20279)
relating to the similarity between data that satisfy the FDA's
designations and data that satisfy the substantial clinical improvement
criterion under the new technology add-on payment policy. The commenter
stated that clarity was provided that will help future applicants
understand which types of data can serve as the foundation for
satisfying the substantial clinical improvement criterion. The
commenter also expressed its appreciation that CMS further clarified
that it accepts a wide range of data that would support the conclusion
that the technology represents a substantial clinical improvement. The
commenter explained that it interpreted CMS' statements to mean that
CMS appreciates and considers the patient's experience and point-of-
view in its determination of a technology's substantial clinical
improvement with respect to existing technologies, and stated that it
hopes the agency will confirm this rationale in upcoming rulemaking.
    Response: We appreciate the commenter's support of our clarifying
statements in the FY 2019 IPPS/LTCH PPS proposed rule. Additionally, we
refer the commenter to the September 7, 2001 final rule for a more
detailed discussion of the substantial clinical improvement criterion
(66 FR 46902). We also refer readers to section II.H.8. of the preamble
of this proposed rule for a discussion of our proposed alternative
inpatient new technology add-on payment pathway for transformative new
devices, and sections II.H.6. and II.H.7. of the preamble of this
proposed rule for a discussion of and request for comment on potential
revisions to the new technology add-on payment substantial clinical
improvement criterion.
    Comment: Another commenter stated that the criteria for priority
FDA review are very similar to the criteria to substantiate a
technology's substantial clinical improvement under the new technology
add-on payment policy and, therefore, devices used in the inpatient
setting that are determined to be eligible for expedited review and
approved by the FDA should automatically be considered as representing
a substantial clinical improvement with respect to existing
technologies, without further consideration by CMS.
    Response: We refer readers to our response to this and similar
comments in the FY 2019 IPPS/LTCH PPS proposed rule (83 FR 20278
through 20279).
    Comment: One commenter stated that an entity submitting an
application for new technology add-on payments should be entitled to
administrative review of an adverse determination by an official of the
Department of Health and Human Services other than an official of the
CMS. The commenter believed that this will provide a safeguard both for
the manufacturer submitting an application, as well as for
beneficiaries who would benefit from access to the innovative
technology that is the subject of the new technology add-on payment
application. The commenter further recommended that administrative
review of an adverse determination should not preclude resubmission of
a modified application at a later point in the future.
    Response: As discussed previously, the public has an opportunity at
the New Technology Town Hall meeting to provide input regarding the
substantial clinical improvement criterion for each new technology add-
on payment application under review for the upcoming fiscal year. We
summarize each application in the IPPS/LTCH PPS proposed rule, and
consider the public comments received in response to the proposed rule
in determining whether to approve an application for new technology
add-on payments. Furthermore, we also accept additional supplemental
information on all new technology add-on payment applications
summarized in the proposed rule through the end of the comment period
for the annual IPPS/LTCH PPS proposed rule. We conduct a thorough
review of all applications and, as described above, allow a wide range
of data that would support the conclusion of a representation of
substantial clinical improvement. We also note that an applicant may
always resubmit an application for new technology add-on payments for a
subsequent year following a denial of an application submitted for a
prior fiscal year.
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: http://www.cms.gov/Medicare/Coding/ICD10/2016-ICD-10-PCS-and-GEMs.html, including guidelines for ICD-10-PCS Section ``X'' codes.
We encourage providers to view the material provided on ICD-10-PCS
Section ``X'' codes.
[[Page 19276]]
4. Proposed FY 2020 Status of Technologies Approved for FY 2019 New
Technology Add-On Payments
a. Defitelio[supreg] (Defibrotide)
    Jazz Pharmaceuticals submitted an application for new technology
add-on payments for FY 2017 for defibrotide (Defitelio[supreg]), a
treatment for patients who have been diagnosed with hepatic veno-
occlusive disease (VOD) with evidence of multi-organ dysfunction. VOD,
also known as sinusoidal obstruction syndrome (SOS), is a potentially
life-threatening complication of hematopoietic stem cell
transplantation (HSCT), with an incidence rate of 8 percent to 15
percent. Diagnoses of VOD range in severity from what has been
classically defined as a disease limited to the liver (mild) and
reversible, to a severe syndrome associated with multi-organ
dysfunction or failure and death. Patients who have received treatment
involving HSCT who develop VOD with multi-organ failure face an
immediate risk of death, with a mortality rate of more than 80 percent
when only supportive care is used. The applicant asserted that
Defitelio[supreg] improves the survival rate of patients who have been
diagnosed with VOD with multi-organ failure by 23 percent.
    Defitelio[supreg] received Orphan Drug Designation for the
treatment of VOD in 2003 and for the prevention of VOD in 2007. It has
been available to patients as an investigational drug through an
Expanded Access Program since 2006. The applicant's New Drug
Application (NDA) for Defitelio[supreg] received FDA approval on March
30, 2016. The applicant confirmed that Defitelio[supreg] was not
available on the U.S. market as of the FDA NDA approval date of March
30, 2016. According to the applicant, commercial packaging could not be
completed until the label for Defitelio[supreg] was finalized with FDA
approval, and that commercial shipments of Defitelio[supreg] to
hospitals and treatment centers began on April 4, 2016. Therefore, we
agreed that, based on this information, the newness period for
Defitelio[supreg] begins on April 4, 2016, the date of its first
commercial availability.
    The applicant received approval to use unique ICD-10-PCS procedure
codes to describe the use of Defitelio[supreg], with an effective date
of October 1, 2016. The approved ICD-10-PCS procedure codes are:
XW03392 (Introduction of defibrotide sodium anticoagulant into
peripheral vein, percutaneous approach); and XW04392 (Introduction of
defibrotide sodium anticoagulant into central vein, percutaneous
approach). After evaluation of the newness, costs, and substantial
clinical improvement criteria for new technology add-on payments for
Defitelio[supreg] and consideration of the public comments we received
in response to the FY 2017 IPPS/LTCH PPS proposed rule, we approved
Defitelio[supreg] for new technology add-on payments for FY 2017 (81 FR
56906). With the new technology add-on payment application, the
applicant estimated that the average Medicare beneficiary would require
a dosage of 25 mg/kg/day for a minimum of 21 days of treatment. The
recommended dose is 6.25 mg/kg given as a 2-hour intravenous infusion
every 6 hours. Dosing should be based on a patient's baseline body
weight, which is assumed to be 70 kg for an average adult patient. All
vials contain 200 mg at a cost of $825 per vial. Therefore, we
determined that cases involving the use of the Defitelio[supreg]
technology would incur an average cost per case of $151,800 (70 kg
adult x 25 mg/kg/day x 21 days = 36,750 mg per patient/200 mg vial =
184 vials per patient x $825 per vial = $151,800). Under existing Sec.
412.88(a)(2), we limit new technology add-on payments to the lesser of
50 percent of the average cost of the technology or 50 percent of the
costs in excess of the MS-DRG payment for the case. As a result, the
maximum new technology add-on payment amount for a case involving the
use of Defitelio[supreg] is $75,900 for FY 2019.
    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).
    With regard to the newness criterion for Defitelio[supreg], we
considered the beginning of the newness period to commence on the first
day Defitelio[supreg] was commercially available (April 4, 2016).
Because the 3-year anniversary date of the entry of the
Defitelio[supreg] onto the U.S. market (April 4, 2019) will occur
during FY 2019, we are proposing to discontinue new technology add-on
payments for this technology for FY 2020. We are inviting public
comments on our proposal to discontinue new technology add-on payments
for Defitelio[supreg] for FY 2020.
b. Ustekinumab (Stelara[supreg])
    Janssen Biotech submitted an application for new technology add-on
payments for the Stelara[supreg] induction therapy for FY 2018.
Stelara[supreg] received FDA approval on September 23, 2016 as an
intravenous (IV) infusion treatment for adult patients who have been
diagnosed with moderately to severely active Crohn's disease (CD) who
have failed or were intolerant to treatment using immunomodulators or
corticosteroids, but never failed a tumor necrosis factor (TNF)
blocker, or failed or were intolerant to treatment using one or more
TNF blockers. Stelara[supreg] IV is intended for induction--
subcutaneous prefilled syringes are intended for maintenance dosing.
Stelara[supreg] must be administered intravenously by a health care
professional in either an inpatient hospital setting or an outpatient
hospital setting.
    Stelara[supreg] for IV infusion is packaged in single 130 mg vials.
Induction therapy consists of a single IV infusion dose using the
following weight-based dosing regimen: Patients weighing 55 kg or less
than () 55 kg, but 85 kg or less than () 85 kg are administered 520 mg of Stelara[supreg]
(4 vials). An average dose of Stelara[supreg] administered through IV
infusion is 390 mg (3 vials). Maintenance doses of Stelara[supreg] are
administered at 90 mg, subcutaneously, at 8-week intervals and may
occur in the outpatient hospital setting.
    CD is an inflammatory bowel disease of unknown etiology,
characterized by transmural inflammation of the gastrointestinal (GI)
tract. Symptoms of CD may include fatigue, prolonged diarrhea with or
without bleeding, abdominal pain, weight loss and fever. CD can affect
any part of the GI tract including the mouth, esophagus, stomach, small
intestine, and large intestine. Most commonly used pharmacologic
treatments for CD include antibiotics, mesalamines, corticosteroids,
immunomodulators, tumor necrosis alpha (TNF[alpha]) inhibitors, and
anti-integrin agents. Surgery may be necessary for some patients who
have been diagnosed with CD in which conventional therapies have
failed. After evaluation of the newness, costs,
[[Page 19277]]
and substantial clinical improvement criteria for new technology add-on
payments for Stelara[supreg] and consideration of the public comments
we received in response to the FY 2018 IPPS/LTCH PPS proposed rule, we
approved Stelara[supreg] for new technology add-on payments for FY 2018
(82 FR 38129). Cases involving Stelara[supreg] that are eligible for
new technology add-on payments are identified by ICD-10-PCS procedure
code XW033F3 (Introduction of other New Technology therapeutic
substance into peripheral vein, percutaneous approach, new technology
group 3). With the new technology add-on payment application, the
applicant estimated that the average Medicare beneficiary would require
a dosage of 390 mg (3 vials) at a hospital acquisition cost of $1,600
per vial (for a total of $4,800). Under existing Sec.  412.88(a)(2), we
limit new technology add-on payments to the lesser of 50 percent of the
average cost of the technology or 50 percent of the costs in excess of
the MS-DRG payment for the case. As a result, the maximum new
technology add-on payment amount for a case involving the use of
Stelara[supreg] is $2,400 for FY 2019.
    With regard to the newness criterion for Stelara[supreg], we
considered the beginning of the newness period to commence when
Stelara[supreg] received FDA approval as an IV infusion treatment for
Crohn's disease (CD) on September 23, 2016. Because the 3-year
anniversary date of the entry of Stelara[supreg] onto the U.S. market
(September 23, 2019) will occur during FY 2019, we are proposing to
discontinue new technology add-on payments for this technology for FY
2020. We are inviting public comments on our proposal to discontinue
new technology add-on payments for Stelara[supreg] for FY 2020.
c. Bezlotoxumab (ZINPLAVATM)
    Merck & Co., Inc. submitted an application for new technology add-
on payments for ZINPLAVATM for FY 2018.
ZINPLAVATM is indicated as a treatment to reduce recurrence
of Clostridium difficile infection (CDI) in adult patients who are
receiving antibacterial drug treatment for a diagnosis of CDI and who
are at high risk for CDI recurrence. ZINPLAVATM is not
indicated for the treatment of the presenting episode of CDI and is not
an antibacterial drug. ZINPLAVATM should only be used in
conjunction with an antibacterial drug treatment for CDI.
    Clostridium difficile (C-diff) is a disease-causing anaerobic,
spore forming bacterium that affects the gastrointestinal (GI) tract.
Some people carry the C-diff bacterium in their intestines, but never
develop symptoms of an infection. The difference between asymptomatic
colonization and disease is caused primarily by the production of an
enterotoxin (Toxin A) and/or a cytotoxin (Toxin B). The presence of
either or both toxins can lead to symptomatic CDI, which is defined as
the acute onset of diarrhea with a documented infection with toxigenic
C-diff. The GI tract contains millions of bacteria, commonly referred
to as ``normal flora'' or ``good bacteria,'' which play a role in
protecting the body from infection. Antibiotics can kill these good
bacteria and allow C-diff to multiply and release toxins that damage
the cells lining the intestinal wall, resulting in a CDI. CDI is a
leading cause of hospital-associated gastrointestinal illnesses.
Persons at increased risk for CDI include people who are currently on
or who have recently been treated with antibiotics, people who have
encountered current or recent hospitalization, people who are older
than 65 years, immunocompromised patients, and people who have recently
had a diagnosis of CDI. CDI symptoms include, but are not limited to,
diarrhea, abdominal pain, and fever. CDI symptoms range in severity
from mild (abdominal discomfort, loose stools) to severe (profuse,
watery diarrhea, severe abdominal pain, and high fevers). Severe CDI
can be life-threatening and, in rare cases, can cause bowel rupture,
sepsis and organ failure. CDI is responsible for 14,000 deaths per year
in the United States.
    C-diff produces two virulent, pro-inflammatory toxins, Toxin A and
Toxin B, which target host colonic endothelial cells by binding to
endothelial cell surface receptors via combined repetitive oligopeptide
(CROP) domains. These toxins cause the release of inflammatory
cytokines leading to intestinal fluid secretion and intestinal
inflammation. The applicant asserted that ZINPLAVATM targets
Toxin B sites within the CROP domain rather than the C-diff organism
itself. According to the applicant, by targeting C-diff Toxin B,
ZINPLAVATM neutralizes Toxin B, prevents large intestine
endothelial cell inflammation, symptoms associated with CDI, and
reduces the recurrence of CDI. ZINPLAVATM received FDA
approval on October 21, 2016, as a treatment to reduce the recurrence
of CDI in adult patients receiving antibacterial drug treatment for CDI
and who are at high risk of CDI recurrence. As previously stated,
ZINPLAVATM is not indicated for the treatment of CDI.
ZINPLAVATM is not an antibacterial drug, and should only be
used in conjunction with an antibacterial drug treatment for CDI.
ZINPLAVATM became commercially available on February 10,
2017. Therefore, the newness period for ZINPLAVATM began on
February 10, 2017. The applicant submitted a request for a unique ICD-
10-PCS procedure code and was granted approval for the following
procedure codes: XW033A3 (Introduction of bezlotoxumab monoclonal
antibody, into peripheral vein, percutaneous approach, new technology
group 3) and XW043A3 (Introduction of bezlotoxumab monoclonal antibody,
into central vein, percutaneous approach, new technology group 3).
    After evaluation of the newness, costs, and substantial clinical
improvement criteria for new technology add-on payments for
ZINPLAVATM and consideration of the public comments we
received in response to the FY 2018 IPPS/LTCH PPS proposed rule, we
approved ZINPLAVATM for new technology add-on payments for
FY 2018 (82 FR 38119). With the new technology add-on payment
application, the applicant estimated that the average Medicare
beneficiary would require a dosage of 10 mg/kg of ZINPLAVATM
administered as an IV infusion over 60 minutes as a single dose.
According to the applicant, the WAC for one dose is $3,800. Under
existing Sec.  412.88(a)(2), we limit new technology add-on payments to
the lesser of 50 percent of the average cost of the technology or 50
percent of the costs in excess of the MS-DRG payment for the case. As a
result, the maximum new technology add-on payment amount for a case
involving the use of ZINPLAVATM is $1,900 for FY 2019.
    With regard to the newness criterion for ZINPLAVATM, we
considered the beginning of the newness period to commence on February
10, 2017. As discussed previously in this section, 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 upcoming fiscal year. Because the 3-
year anniversary date of the entry of ZINPLAVATM onto the
U.S. market (February 10, 2020) will occur in the first half of FY
2020, we are proposing to discontinue new technology add-on payments
for this technology for FY 2020. We are inviting public comments on our
proposal to discontinue new technology add-on payments for
ZINPLAVATM for FY 2020.
[[Page 19278]]
d. KYMRIAH[supreg] (Tisagenlecleucel) and YESCARTA[supreg]
(Axicabtagene Ciloleucel)
    Two manufacturers, Novartis Pharmaceuticals Corporation and Kite
Pharma, Inc., submitted separate applications for new technology add-on
payments for FY 2019 for KYMRIAH[supreg] (tisagenlecleucel) and
YESCARTA[supreg] (axicabtagene ciloleucel), respectively. Both of these
technologies are CD-19-directed T-cell immunotherapies used for the
purposes of treating patients with aggressive variants of non-Hodgkin
lymphoma (NHL).
    On May 1, 2018, Novartis Pharmaceuticals Corporation received FDA
approval for KYMRIAH[supreg]'s second indication, the treatment of
adult patients with relapsed or refractory (r/r) large B-cell lymphoma
after two or more lines of systemic therapy including diffuse large B-
cell lymphoma (DLBCL) not otherwise specified, high grade B-cell
lymphoma and DLBCL arising from follicular lymphoma. On October 18,
2017, Kite Pharma, Inc. received FDA approval for the use of
YESCARTA[supreg] indicated for the treatment of adult patients with r/r
large B-cell lymphoma after two or more lines of systemic therapy,
including DLBCL not otherwise specified, primary mediastinal large B-
cell lymphoma, high grade B-cell lymphoma, and DLBCL arising from
follicular lymphoma.
    Procedures involving the KYMRIAH[supreg] and YESCARTA[supreg]
therapies are both reported using the following ICD-10-PCS procedure
codes: XW033C3 (Introduction of engineered autologous chimeric antigen
receptor t-cell immunotherapy into peripheral vein, percutaneous
approach, new technology group 3); and XW043C3 (Introduction of
engineered autologous chimeric antigen receptor t-cell immunotherapy
into central vein, percutaneous approach, new technology group 3). In
the FY 2019 IPPS/LTCH PPS final rule, we finalized our proposal to
assign cases reporting these ICD-10-PCS procedure codes to Pre-MDC MS-
DRG 016 for FY 2019 and to revise the title of this MS-DRG to
Autologous Bone Marrow Transplant with CC/MCC or T-cell Immunotherapy.
We refer readers to section II.F.2.d. of the preamble of the FY 2019
IPPS/LTCH PPS final rule for a complete discussion of these final
policies (83 FR 41172 through 41174).
    With respect to the newness criterion, according to both
applicants, KYMRIAH[supreg] and YESCARTA[supreg] are the first CAR T-
cell immunotherapies of their kind. As discussed in the FY 2019 IPPS/
LTCH PPS proposed and final rules, because potential cases representing
patients who may be eligible for treatment using KYMRIAH[supreg] and
YESCARTA[supreg] would group to the same MS-DRGs (because the same ICD-
10-CM diagnosis codes and ICD-10-PCS procedures codes are used to
report treatment using either KYMRIAH[supreg] or YESCARTA[supreg]), and
we believed that these technologies are intended to treat the same or
similar disease in the same or similar patient population, and are
purposed to achieve the same therapeutic outcome using the same or
similar mechanism of action, we believed these two technologies are
substantially similar to each other and that it was appropriate to
evaluate both technologies as one application for new technology add-on
payments under the IPPS. For these reasons, we stated that we intended
to make one determination regarding approval for new technology add-on
payments that would apply to both applications, and in accordance with
our policy, would use the earliest market availability date submitted
as the beginning of the newness period for both KYMRIAH[supreg] and
YESCARTA[supreg].
    As summarized in the FY 2019 IPPS/LTCH PPS final rule, we received
comments from the applicants for KYMRIAH[supreg] and YESCARTA[supreg]
regarding whether KYMRIAH[supreg] and YESCARTA[supreg] were
substantially similar to each other. The applicant for YESCARTA[supreg]
stated that it believed each technology consists of notable differences
in the construction, as well as manufacturing processes and successes
that may lead to differences in activity. The applicant encouraged CMS
to evaluate YESCARTA[supreg] as a separate new technology add-on
payment application and approve separate new technology add-on payments
for YESCARTA[supreg], effective October 1, 2018, and to not move
forward with a single new technology add-on payment evaluation
determination that covers both CAR T-cell therapies, YESCARTA[supreg]
and KYMRIAH[supreg]. The applicant for KYMRIAH[supreg] indicated that,
based on FDA's approval, it agreed with CMS that KYMRIAH[supreg] is
substantially similar to YESCARTA[supreg], as defined by the new
technology add-on payment application evaluation criteria. We refer
readers to the FY 2019 IPPS/LTCH PPS final rule for a more detailed
summary of these and other public comments we received regarding
substantial similarity for KYMRIAH[supreg] and YESCARTA[supreg].
    After consideration of the public comments we received and for the
reasons discussed in the FY 2019 IPPS/LTCH PPS final rule, we stated
that we believed that KYMRIAH[supreg] and YESCARTA[supreg] are
substantially similar to one another. We also noted that for FY 2019,
there was no payment impact regarding this determination of substantial
similarity because the cost of the technologies is the same. However,
we stated that we welcomed additional comments in future rulemaking
regarding whether KYMRIAH[supreg] and YESCARTA[supreg] are
substantially similar and intended to revisit this issue in the FY 2020
IPPS/LTCH PPS proposed rule. For the reasons discussed in the FY 2019
IPPS/LTCH PPS final rule, we continue to believe that KYMRIAH[supreg]
and YESCARTA[supreg] are substantially similar to each other. We note
that for FY 2020, the pricing for KYMRIAH[supreg] and YESCARTA[supreg]
remains the same and, therefore, for FY 2020, there would continue to
be no payment impact regarding the determination that the two
technologies are substantially similar to each other. Similar to last
year, we welcome public comments regarding whether KYMRIAH[supreg] and
YESCARTA[supreg] are substantially similar to each other. We refer
readers to the FY 2019 IPPS/LTCH PPS final rule for a complete
discussion on newness and substantial similarity regarding
KYMRIAH[supreg] and YESCARTA[supreg].
    After evaluation of the newness, costs, and substantial clinical
improvement criteria for new technology add-on payments for
KYMRIAH[supreg] and YESCARTA[supreg] and consideration of the public
comments we received in response to the FY 2019 IPPS/LTCH PPS proposed
rule, we approved new technology add-on payments for KYMRIAH[supreg]
and YESCARTA[supreg] for FY 2019 (83 FR 41299). Cases involving
KYMRIAH[supreg] or YESCARTA[supreg] that are eligible for new
technology add-on payments are identified by ICD-10-PCS procedure codes
XW033C3 or XW043C3. The applicants for both KYMRIAH[supreg] and
YESCARTA[supreg] estimated that the average cost for an administered
dose of KYMRIAH[supreg] or YESCARTA[supreg] is $373,000. Under existing
Sec.  412.88(a)(2), we limit new technology add-on payments to the
lesser of 50 percent of the average cost of the technology or 50
percent of the costs in excess of the MS-DRG payment for the case. As a
result, for FY 2019, the maximum new technology add-on payment for a
case involving the use of KYMRIAH[supreg] or YESCARTA[supreg] is
$186,500.
    As stated above, 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. With regard to the newness criterion for
KYMRIAH[supreg] and YESCARTA[supreg], as discussed in the FY
[[Page 19279]]
2019 IPPS/LTCH PPS final rule, according to the applicant for
YESCARTA[supreg], the first commercial shipment of YESCARTA[supreg] was
received by a certified treatment center on November 22, 2017. As
stated above, we use the earliest market availability date submitted as
the beginning of the newness period for both KYMRIAH[supreg] and
YESCARTA[supreg]. Therefore, we consider the beginning of the newness
period for both KYMRIAH[supreg] and YESCARTA[supreg] to commence
November 22, 2017. Because the 3-year anniversary date of the entry of
the technology onto the U.S. market (November 22, 2020) will occur
after FY 2020, we are proposing to continue new technology add-on
payments for KYMRIAH[supreg] and YESCARTA[supreg] for FY 2020. Under
the proposed change to the calculation of the new technology add-on
payment amount discussed in section II.H.9. of the preamble of this
proposed rule, we are proposing that the maximum new technology add-on
payment amount for a case involving the use of KYMRIAH[supreg] and
YESCARTA[supreg] would be increased to $242,450 for FY 2020; that is,
65 percent of the average cost of the technology. However, if we do not
finalize the proposed change to the calculation of the new technology
add-on payment amount, we are proposing that the maximum new technology
add-on payment for a case involving KYMRIAH[supreg] or YESCARTA[supreg]
would remain at $186,500 for FY 2020. We are inviting public comments
on our proposals to continue new technology add-on payments for
KYMRIAH[supreg] and YESCARTA[supreg] for FY 2020.
    For the reasons discussed in section II.F.2.c. of this proposed
rule, we are proposing not to modify the current MS-DRG assignment for
cases reporting CAR T-cell therapies for FY 2020. Alternatively, we are
seeking public comments on payment alternatives for CAR T-cell
therapies. We also are inviting public comments on how these payment
alternatives would affect access to care, as well as how they affect
incentives to encourage lower drug prices, which is a high priority for
this Administration. As discussed in the FY 2019 IPPS/LTCH PPS final
rule (83 FR 41172 through 41174), we are considering approaches and
authorities to encourage value-based care and lower drug prices. We are
soliciting public comments on how the effective dates of any potential
payment methodology alternatives, if any were to be adopted, may
intersect and affect future participation in any such alternative
approaches. Such payment alternatives could include adjusting the CCRs
used to calculate new technology add-on payments for cases involving
the use of KYMRIAH[supreg] and YESCARTA[supreg]. We note that we also
considered this payment alternative for FY 2019, as discussed in the FY
2019 IPPS/LTCH PPS final rule (83 FR 41172 through 41174), and are
revisiting this approach given the additional experience with CAR T-
cell therapy being provided in hospitals paid under the IPPS and in
IPPS-excluded cancer hospitals. We also are requesting public comments
on other payment alternatives for these cases, including eliminating
the use of CCRs in calculating the new technology add-on payments for
cases involving the use of KYMRIAH[supreg] and YESCARTA[supreg] by
making a uniform add-on payment that equals the proposed maximum add-on
payment, that is, 65 percent of the cost of the technology (in
accordance with the proposed increase in the calculation of the maximum
new technology add-on payment amount), which in this instance would be
$242,450; and/or using a higher percentage than the proposed 65 percent
to calculate the maximum new technology add-on payment amount. If we
were to finalize any such changes to the new technology add-on payment
for cases involving the use of KYMRIAH[supreg] and YESCARTA[supreg], we
would also revise our proposed amendments to Sec.  412.88 accordingly.
e. VYXEOSTM (Cytarabine and Daunorubicin Liposome for
Injection)
    Jazz Pharmaceuticals, Inc. submitted an application for new
technology add-on payments for the VYXEOSTM technology for
FY 2019. VYXEOSTM was approved by FDA on August 3, 2017, for
the treatment of adults with newly diagnosed therapy-related acute
myeloid leukemia (t-AML) or AML with myelodysplasia-related changes
(AML-MRC).
    Treatment of AML diagnoses usually consists of two phases;
remission induction and post-remission therapy. Phase one, remission
induction, is aimed at eliminating as many myeloblasts as possible. The
most common used remission induction regimens for AML diagnoses are the
``7+3'' regimens using an antineoplastic and an anthracycline.
Cytarabine and daunorubicin are two commonly used drugs for ``7+3''
remission induction therapy. Cytarabine is continuously administered
intravenously over the course of 7 days, while daunorubicin is
intermittently administered intravenously for the first 3 days. The
``7+3'' regimen typically achieves a 70 to 80 percent complete
remission (CR) rate in most patients under 60 years of age.
    VYXEOSTM is a nano-scale liposomal formulation
containing a fixed combination of cytarabine and daunorubicin in a 5:1
molar ratio. This formulation was developed by the applicant using a
proprietary system known as CombiPlex. According to the applicant,
CombiPlex addresses several fundamental shortcomings of conventional
combination regimens, specifically the conventional ``7+3'' free drug
dosing, as well as the challenges inherent in combination drug
development, by identifying the most effective synergistic molar ratio
of the drugs being combined in vitro, and fixing this ratio in a nano-
scale drug delivery complex to maintain the optimized combination after
administration and ensuring exposure of this ratio to the tumor.
    After evaluation of the newness, costs, and substantial clinical
improvement criteria for new technology add-on payments for
VYXEOSTM and consideration of the public comments we
received in response to the FY 2019 IPPS/LTCH PPS proposed rule, we
approved VYXEOSTM for new technology add-on payments for FY
2019 (83 FR 41304). Cases involving VYXEOSTM that are
eligible for new technology add-on payments are identified by ICD-10-
PCS procedure codes XW033B3 (Introduction of cytarabine and
caunorubicin liposome antineoplastic into peripheral vein, percutaneous
approach, new technology group 3) or XW043B3 (Introduction of
cytarabine and daunorubicin liposome antineoplastic into central vein,
percutaneous approach, new technology group 3). In its application, the
applicant estimated that the average cost of a single vial for
VYXEOSTM is $7,750 (daunorubicin 44 mg/m\2\ and cytarabine
100 mg/m\2\). As discussed in the FY 2019 IPPS/LTCH PPS final rule (83
FR 41305), we computed a maximum average of 9.4 vials used in the
inpatient hospital setting with the maximum average cost for
VYXEOSTM used in the inpatient hospital setting equaling
$72,850 ($7,750 cost per vial * 9.4 vials). Under existing Sec.
412.88(a)(2), we limit new technology add-on payments to the lesser of
50 percent of the average cost of the technology or 50 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
VYXEOSTM is $36,425 for FY 2019.
    With regard to the newness criterion for VYXEOSTM, we
consider the beginning of the newness period to commence when
VYXEOSTM was approved by the FDA (August 3, 2017). As
discussed previously in this section,
[[Page 19280]]
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 upcoming fiscal year.
Because the 3-year anniversary date of the entry of the
VYXEOSTM onto the U.S. market (August 3, 2020) will occur in
the second half of FY 2020, we are proposing to continue new technology
add-on payments for this technology for FY 2020. Under the proposed
change to the calculation of the new technology add-on payment amount
discussed in section II.H.9. of the preamble of this proposed rule, we
are proposing that the maximum new technology add-on payment amount for
a case involving the use of VYXEOSTM would be $47,353.50 for
FY 2020; that is, 65 percent of the average cost of the technology.
However, if we do not finalize the proposed change to the calculation
of the new technology add-on payment amount, we are proposing that the
maximum new technology add-on payment for a case involving
VYXEOSTM would remain at $36,425 for FY 2020. We are
inviting public comments on our proposals to continue new technology
add-on payments for VYXEOSTM for FY 2020.
f. VABOMERETM (Meropenem-Vaborbactam)
    Melinta Therapeutics, Inc., submitted an application for new
technology add-on payments for VABOMERETM for FY 2019.
VABOMERETM is indicated for use in the treatment of adult
patients who have been diagnosed with complicated urinary tract
infections (cUTIs), including pyelonephritis, caused by designated
susceptible bacteria. VABOMERETM received FDA approval on
August 29, 2017.
    After evaluation of the newness, costs, and substantial clinical
improvement criteria for new technology add-on payments for
VABOMERETM and consideration of the public comments we
received in response to the FY 2019 IPPS/LTCH PPS proposed rule, we
approved VABOMERETM for new technology add-on payments for
FY 2019 (83 FR 41311). We noted in the FY 2019 IPPS/LTCH PPS final rule
(83 FR 41311) that the applicant did not request approval for the use
of a unique ICD-10-PCS procedure code for VABOMERETM for FY
2019 and that as a result, hospitals would be unable to uniquely
identify the use of VABOMERETM on an inpatient claim using
the typical coding of an ICD-10-PCS procedure code. We noted that in
the FY 2013 IPPS/LTCH PPS final rule (77 FR 53352), with regard to the
oral drug DIFICIDTM, we revised our policy to allow for the
use of an alternative code set to identify oral medications where no
inpatient procedure is associated for the purposes of new technology
add-on payments. We established the use of a NDC as the alternative
code set for this purpose and described our rationale for this
particular code set. This change was effective for payments for
discharges occurring on or after October 1, 2012. In the FY 2019 IPPS/
LTCH PPS final rule, we acknowledged that VABOMERETM is not
an oral drug and is administered by IV infusion, but it was the first
approved new technology aside from an oral drug with no uniquely
assigned inpatient procedure code. Therefore, we believed that the
circumstances with respect to the identification of eligible cases
using VABOMERETM are similar to those addressed in the FY
2013 IPPS/LTCH PPS final rule with regard to DIFICIDTM
because we did not have current ICD-10-PCS code(s) to uniquely identify
the use of VABOMERETM to make the new technology add-on
payment. We stated that because we have determined that
VABOMERETM has met all of the new technology add-on payment
criteria and cases involving the use of VABOMERETM would be
eligible for such payments for FY 2019, we needed to use an alternative
coding method to identify these cases and make the new technology add-
on payment for use of VABOMERETM in FY 2019. Therefore, for
the reasons discussed in the FY 2019 IPPS/LTCH PPS final rule and
similar to the policy in the FY 2013 IPPS/LTCH PPS final rule, cases
involving VABOMERETM that are eligible for new technology
add-on payments for FY 2019 are identified by National Drug Codes (NDC)
65293-0009-01 or 70842-0120-01 (VABOMERETM Meropenem-
Vaborbactam Vial).
    According to the applicant, the cost of VABOMERETM is
$165 per vial. A patient receives two vials per dose and three doses
per day. Therefore, the per-day cost of VABOMERETM is $990
per patient. The duration of therapy, consistent with the Prescribing
Information, is up to 14 days. Therefore, the estimated cost of
VABOMERETM to the hospital, per patient, is $13,860. We
stated in the FY 2019 IPPS/LTCH PPS final rule that based on the
limited data from the product's launch, approximately 80 percent of
VABOMERETM's usage would be in the inpatient hospital
setting, and approximately 20 percent of VABOMERETM's usage
may take place outside of the inpatient hospital setting. Therefore,
the average number of days of VABOMERETM administration in
the inpatient hospital setting is estimated at 80 percent of 14 days,
or approximately 11.2 days. As a result, the total inpatient cost for
VABOMERETM is $11,088 ($990 * 11.2 days). Under existing
Sec.  412.88(a)(2), we limit new technology add-on payments to the
lesser of 50 percent of the average cost of the technology or 50
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 VABOMERETM is $5,544 for FY 2019.
    With regard to the newness criterion for VABOMERETM, we
consider the beginning of the newness period to commence when
VABOMERETM received FDA approval (August 29, 2017). As
discussed previously in this section, 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 upcoming fiscal year. Because the 3-year
anniversary date of the entry of VABOMERETM onto the U.S.
market (August 29, 2020) will occur during the second half of FY 2020,
we are proposing to continue new technology add-on payments for this
technology for FY 2020. Under the proposed change to the calculation of
the new technology add-on payment amount discussed in section II.H.9.
of the preamble of this proposed rule, we are proposing that the
maximum new technology add-on payment amount for a case involving the
use of VABOMERETM would be $7,207.20 for FY 2020; that is,
65 percent of the average cost of the technology. However, if we do not
finalize the proposed change to the calculation of the new technology
add-on payment amount, we are proposing that the maximum new technology
add-on payment for a case involving VABOMERETM would remain
at $5,544 for FY 2020.
    As noted above, because there was no ICD-10-PCS code(s) to uniquely
identify the use of VABOMERETM, we indicated in the FY 2019
IPPS/LTCH PPS final rule that FY 2019 cases involving the use of
VABOMERETM that are eligible for the FY 2019 new technology
add-on payments would be identified using an NDC code. Subsequent to
the issuance of that final rule, new ICD-10-PCS codes XW033N5
(Introduction of Meropenem-vaborbactam Anti-infective into Peripheral
Vein, Percutaneous Approach, New Technology Group 5) and XW043N5
(Introduction of Meropenem-vaborbactam Anti-infective
[[Page 19281]]
into Central Vein, Percutaneous Approach, New Technology Group 5) were
finalized to identify cases involving the use of VABOMERETM,
effective October 1, 2019, as shown in Table 6B--New Procedure Codes,
associated with this proposed rule and available via the internet on
the CMS website at: http://www.cms.hhs.gov/Medicare/Medicare-Fee-for-Service-Payment/AcuteInpatientPPS/index.html. Therefore, for FY 2020,
we will use these two ICD-10-PCS codes (XW033N5 and XW043N5) to
identify cases involving the use of VABOMERETM that are
eligible for the new technology add-on payments.
    While these newly approved ICD-10-PCS procedure codes can be used
to uniquely identify cases involving the use of VABOMERETM
for FY 2020, we are concerned that limiting new technology add-on
payments only to cases reporting these new ICD-10-PCS codes for FY 2020
could cause confusion because it is possible that some providers may
inadvertently continue to bill some claims with the NDC codes rather
than the new ICD-10-PCS codes. Therefore, for FY 2020, we are proposing
that in addition to using the new ICD-10-PCS codes to identify cases
involving the use of VABOMERETM, we would also continue to
use the NDC codes to identify cases and make the new technology add-on
payments. As a result, we are proposing that cases involving the use of
VABOMERETM that are eligible for new technology add-on
payments for FY 2020 would be identified by ICD-10-PCS codes XW033N5 or
XW043N5 or NDCs 65293-0009-01 or 70842-0120-01.
    We are inviting public comments on our proposal to continue new
technology add-on payments for VABOMERETM for FY 2020 and
our proposals for identifying and making new technology add-on payments
for cases involving the use of VABOMERETM.
g. remed[emacr][supreg] System
    Respicardia, Inc. submitted an application for new technology add-
on payments for the remed[emacr][supreg] System for FY 2019. According
to the applicant, the remed[emacr][supreg] System is indicated for use
as a transvenous phrenic nerve stimulator in the treatment of adult
patients who have been diagnosed with moderate to severe central sleep
apnea. The remed[emacr][supreg] System consists of an implantable pulse
generator, and a stimulation and sensing lead. The pulse generator is
placed under the skin, in either the right or left side of the chest,
and it functions to monitor the patient's respiratory signals. A
transvenous lead for unilateral stimulation of the phrenic nerve is
placed either in the left pericardiophrenic vein or the right
brachiocephalic vein, and a second lead to sense respiration is placed
in the azygos vein. Both leads, in combination with the pulse
generator, function to sense respiration and, when appropriate,
generate an electrical stimulation to the left or right phrenic nerve
to restore regular breathing patterns. On October 6, 2017, the
remed[emacr][supreg] System was approved by the FDA as an implantable
phrenic nerve stimulator indicated for the use in the treatment of
adult patients who have been diagnosed with moderate to severe CSA. The
device was available commercially upon FDA approval. Therefore, the
newness period for the remed[emacr][supreg] System is considered to
begin on October 6, 2017.
    After evaluation of the newness, costs, and substantial clinical
improvement criteria for new technology add-on payments for the
remed[emacr][supreg] System and consideration of the public comments we
received in response to the FY 2019 IPPS/LTCH PPS proposed rule, we
approved the remed[emacr][supreg] System for new technology add-on
payments for FY 2019. Cases involving the use of the
remed[emacr][supreg] System that are eligible for new technology add-on
payments are identified by ICD-10-PCS procedures codes 0JH60DZ and
05H33MZ in combination with procedure code 05H03MZ (Insertion of
neurostimulator lead into right innominate vein, percutaneous approach)
or 05H43MZ (Insertion of neurostimulator lead into left innominate
vein, percutaneous approach). According to the application, the cost of
the remed[emacr][supreg] System is $34,500 per patient. Under existing
Sec.  412.88(a)(2), we limit new technology add-on payments to the
lesser of 50 percent of the average cost of the technology or 50
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 the remed[emacr][supreg] System is $17,250 for FY 2019 (83
FR 41320).
    With regard to the newness criterion for the remed[emacr][supreg]
System, we consider the beginning of the newness period to commence
when the remed[emacr][supreg] System was approved by the FDA on October
6, 2017. Because the 3-year anniversary date of the entry of the
remed[emacr][supreg] System onto the U.S. market (October 6, 2020) will
occur after FY 2020, we are proposing to continue new technology add-on
payments for this technology for FY 2020. Under the proposed change to
the calculation of the new technology add-on payment amount discussed
in section II.H.9. of the preamble of this proposed rule, we are
proposing that the maximum new technology add-on payment amount for a
case involving the use of the remed[emacr][supreg] System would be
$22,425 for FY 2020; that is, 65 percent of the average cost of the
technology. However, if we do not finalize the proposed change to the
calculation of the new technology add-on payment amount, we are
proposing that the maximum new technology add-on payment for a case
involving the remed[emacr][supreg] System would remain at $17,250 for
FY 2020. We are inviting public comments on our proposals to continue
new technology add-on payments for the remed[emacr][supreg] System for
FY 2020.
h. ZEMDRITM (Plazomicin)
    Achaogen, Inc. submitted an application for new technology add-on
payments for ZEMDRITM (Plazomicin) for FY 2019. According to
the applicant, ZEMDRITM (Plazomicin) is a next-generation
aminoglycoside antibiotic, which has been found in vitro to have
enhanced activity against many multi-drug resistant (MDR) gram-negative
bacteria. The applicant received approval from the FDA on June 25,
2018, for use in the treatment of adults who have been diagnosed with
cUTIs, including pyelonephritis. After evaluation of the newness,
costs, and substantial clinical improvement criteria for new technology
add-on payments for ZEMDRITM and consideration of the public
comments we received in response to the FY 2019 IPPS/LTCH PPS proposed
rule, we approved ZEMDRITM for new technology add-on
payments for FY 2019 (83 FR 41334). Cases involving ZEMDRITM
that are eligible for new technology add-on payments are identified by
ICD-10-PCS procedure codes XW033G4 (Introduction of Plazomicin anti-
infective into peripheral vein, percutaneous approach, new technology
group 4) or XW043G4 (Introduction of Plazomicin anti-infective into
central vein, percutaneous approach, new technology group 4). In its
application, the applicant estimated that the average Medicare
beneficiary would require a dosage of 15 mg/kg administered as an IV
infusion as a single dose. According to the applicant, the WAC for one
dose is $330, and patients will typically require 3 vials for the
course of treatment with ZEMDRITM per day for an average
duration of 5.5 days. Therefore, the total cost of ZEMDRITM
per patient is $5,445. Under existing Sec.  412.88(a)(2), we limit new
technology add-on payments to the
[[Page 19282]]
lesser of 50 percent of the average cost of the technology or 50
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 ZEMDRITM is $2,722.50 for FY 2019. With regard to
the newness criterion for ZEMDRITM, we consider the
beginning of the newness period to commence when ZEMDRITM
was approved by the FDA on June 25, 2018. Because the 3-year
anniversary date of the entry of ZEMDRITM onto the U.S.
market (June 25, 2021) will occur after FY 2020, we are proposing to
continue new technology add-on payments for this technology for FY
2020. Under the proposed change to the calculation of the new
technology add-on payment amount discussed in section II.H.9. of the
preamble of this proposed rule, we are proposing that the maximum new
technology add-on payment amount for a case involving the use of
ZEMDRITM would be $3,539.25 for FY 2020; that is, 65 percent
of the average cost of the technology. However, if we do not finalize
the proposed change to the calculation of the new technology add-on
payment amount, we are proposing that the maximum new technology add-on
payment for a case involving ZEMDRITM would remain at
$2,722.50 for FY 2020. We are inviting public comments on our proposals
to continue new technology add-on payments for ZEMDRITM for
FY 2020.
i. GIAPREZATM
    The La Jolla Pharmaceutical Company submitted an application for
new technology add-on payments for GIAPREZATM for FY 2019.
GIAPREZATM, a synthetic human angiotensin II, is
administered through intravenous infusion to raise blood pressure in
adult patients who have been diagnosed with septic or other
distributive shock.
    GIAPREZATM was granted a Priority Review designation
under FDA's expedited program and received FDA approval on December 21,
2017, for the use in the treatment of adults who have been diagnosed
with septic or other distributive shock as an intravenous infusion to
increase blood pressure. After evaluation of the newness, costs, and
substantial clinical improvement criteria for new technology add-on
payments for GIAPREZATM and consideration of the public
comments we received in response to the FY 2019 IPPS/LTCH PPS proposed
rule, we approved GIAPREZATM for new technology add-on
payments for FY 2019 (83 FR 41342). Cases involving
GIAPREZATM that are eligible for new technology add-on
payments are identified by ICD-10-PCS procedure codes XW033H4
(Introduction of synthetic human angiotensin II into peripheral vein,
percutaneous approach, new technology, group 4) or XW043H4
(Introduction of synthetic human angiotensin II into central vein,
percutaneous approach, new technology group 4). In its application, the
applicant estimated that the average Medicare beneficiary would require
a dosage of 20 ng/kg/min administered as an IV infusion over 48 hours,
which would require 2 vials. The applicant explained that the WAC for
one vial is $1,500, with each episode-of-care costing $3,000 per
patient. Under existing Sec.  412.88(a)(2), we limit new technology
add-on payments to the lesser of 50 percent of the average cost of the
technology or 50 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 GIAPREZATM is $1,500 for FY
2019.
    With regard to the newness criterion for GIAPREZATM, we
consider the beginning of the newness period to commence when
GIAPREZATM was approved by the FDA (December 21, 2017).
Because the 3-year anniversary date of the entry of
GIAPREZATM onto the U.S. market (December 21, 2020) would
occur after FY 2020, we are proposing to continue new technology add-on
payments for this technology for FY 2020. Under the proposed change to
the calculation of the new technology add-on payment discussed in
section II.H.9. of the preamble of this proposed rule, we are proposing
that the maximum new technology add-on payment amount for a case
involving the use of GIAPREZATM would be $1,950 for FY 2020;
that is, 65 percent of the average cost of the technology. However, if
we do not finalize the proposed change to the calculation of the new
technology add-on payment amount, we are proposing that the maximum new
technology add-on payment for a case involving GIAPREZATM
would remain at $1,500 for FY 2020. We are inviting public comments on
our proposals to continue new technology add-on payments for
GIAPREZATM for FY 2020.
j. Cerebral Protection System (Sentinel[supreg] Cerebral Protection
System)
    Claret Medical, Inc. submitted an application for new technology
add-on payments for the Cerebral Protection System (Sentinel[supreg]
Cerebral Protection System) for FY 2019. According to the applicant,
the Sentinel Cerebral Protection System is indicated for the use as an
embolic protection (EP) device to capture and remove thrombus and
debris while performing transcatheter aortic valve replacement (TAVR)
procedures. The device is percutaneously delivered via the right radial
artery and is removed upon completion of the TAVR procedure. The De
Novo request for the Sentinel[supreg] Cerebral Protection System was
granted by FDA on June 1, 2017 (DEN160043).
    After evaluation of the newness, costs, and substantial clinical
improvement criteria for new technology add-on payments for the
Sentinel[supreg] Cerebral Protection System and consideration of the
public comments we received in response to the FY 2019 IPPS/LTCH PPS
proposed rule, we approved the Sentinel[supreg] Cerebral Protection
System for new technology add-on payments for FY 2019 (83 FR 41348).
Cases involving the Sentinel[supreg] Cerebral Protection System that
are eligible for new technology add-on payments are identified by ICD-
10-PCS code X2A5312 (Cerebral embolic filtration, dual filter in
innominate artery and left common carotid artery, percutaneous
approach). In its application, the applicant estimated that the cost of
the Sentinel[supreg] Cerebral Protection System is $2,800. Under
existing Sec.  412.88(a)(2), we limit new technology add-on payments to
the lesser of 50 percent of the average cost of the technology or 50
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 the Sentinel[supreg] Cerebral Protection System is $1,400
for FY 2019.
    With regard to the newness criterion for the Sentinel[supreg]
Cerebral Protection System, we consider the beginning of the newness
period to commence when the FDA granted the De Novo request for the
Sentinel[supreg] Cerebral Protection System (June 1, 2017). As
discussed previously in this section, 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 upcoming fiscal year. Because the 3-year
anniversary date of the entry of the Sentinel[supreg] Cerebral
Protection System onto the U.S. market (June 1, 2020) will occur in the
second half of FY 2020, we are proposing to continue new technology
add-on payments for this technology for FY 2020. Under the proposed
change to the calculation of the new technology add-on payment amount
discussed in section II.H.9. of the preamble of this proposed rule, we
are proposing that the maximum new technology add-on payment amount for
[[Page 19283]]
a case involving the use of the Sentinel[supreg] Cerebral Protection
System would be $1,820 for FY 2020; that is, 65 percent of the average
cost of the technology. However, if we do not finalize the proposed
change to the calculation of the new technology add-on payment amount,
we are proposing that the maximum new technology add-on payment for a
case involving the Sentinel[supreg] Cerebral Protection System would
remain at $1,400 for FY 2020. We are inviting public comments on our
proposals to continue new technology add-on payments for the
Sentinel[supreg] Cerebral Protection System for FY 2020.
k. The AQUABEAM System (Aquablation)
    PROCEPT BioRobotics Corporation submitted an application for new
technology add-on payments for the AQUABEAM System (Aquablation) for FY
2019. According to the applicant, the AQUABEAM System is indicated for
the use in the treatment of patients experiencing lower urinary tract
symptoms caused by a diagnosis of benign prostatic hyperplasia (BPH).
The AQUABEAM System consists of three main components: A console with
two high-pressure pumps, a conformal surgical planning unit with trans-
rectal ultrasound imaging, and a single-use robotic hand-piece. The
applicant reported that the AQUABEAM System provides the operating
surgeon a multi-dimensional view, using both ultrasound image guidance
and endoscopic visualization, to clearly identify the prostatic adenoma
and plan the surgical resection area. Based on the planning inputs from
the surgeon, the system's robot delivers Aquablation, an autonomous
waterjet ablation therapy that enables targeted, controlled, heat-free
and immediate removal of prostate tissue used for the purpose of
treating lower urinary tract symptoms caused by a diagnosis of BPH. The
combination of surgical mapping and robotically-controlled resection of
the prostate is designed to offer predictable and reproducible
outcomes, independent of prostate size, prostate shape or surgeon
experience.
    The FDA granted the AQUABEAM System's De Novo request on December
21, 2017, for use in the resection and removal of prostate tissue in
males suffering from lower urinary tract symptoms (LUTS) due to benign
prostatic hyperplasia. The applicant stated that the AQUABEAM System
was made available on the U.S. market immediately after the FDA granted
the De Novo request.
    After evaluation of the newness, costs, and substantial clinical
improvement criteria for new technology add-on payments for the
AQUABEAM System and consideration of the public comments we received in
response to the FY 2019 IPPS/LTCH PPS proposed rule, we approved the
AQUABEAM System for new technology add-on payments for FY 2019 (83 FR
41355). Cases involving the AQUABEAM System that are eligible for new
technology add-on payments are identified by ICD-10-PCS code XV508A4
(Destruction of prostate using robotic waterjet ablation, via natural
or artificial opening endoscopic, new technology group 4). The
applicant estimated that the average Medicare beneficiary would require
the transurethral procedure of one AQUABEAM System per patient.
According to the application, the cost of the AQUABEAM System is $2,500
per procedure. Under existing Sec.  412.88(a)(2), we limit new
technology add-on payments to the lesser of 50 percent of the average
cost of the technology or 50 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 the AQUABEAM System's
Aquablation System is $1,250 for FY 2019.
    With regard to the newness criterion for the AQUABEAM System, we
consider the beginning of the newness period to commence on the date
the FDA granted the De Novo request (December 21, 2017). As noted above
and in the FY 2019 rulemaking, the applicant stated that the AQUABEAM
System was made available on the U.S. market immediately after the FDA
granted the De Novo request.
    We note that in the FY 2019 IPPS/LTCH PPS final rule, we
inadvertently misstated the newness period beginning date as April 19,
2018 (83 FR 41351). As discussed in the FY 2019 IPPS/LTCH PPS final
rule (83 FR 41350), in its public comment in response to the FY 2019
IPPS/LTCH PPS proposed rule, the applicant explained that, while the
AQUABEAM System received approval from the FDA for its De Novo request
on December 21, 2017, local non-coverage determinations in the Medicare
population resulted in the first case being delayed until April 19,
2018. Therefore, the applicant believed that the newness period should
begin on April 19, 2018, instead of the date FDA granted the De Novo
request. In the final rule, we responded that with regard to the
beginning of the technology's newness period, as discussed in the FY
2005 IPPS final rule (69 FR 49003), the timeframe that a new technology
can be eligible to receive new technology add-on payments begins when
data begin to become available. While local non-coverage determinations
may limit the use of a technology in different regions in the country,
a technology may be available in regions where no local non-coverage
decision existed (with data beginning to become available). We also
explained that under our historical policy we do not consider how
frequently the medical service or technology has been used in the
Medicare population in our determination of newness (as discussed in
the FY 2006 IPPS final rule (70 FR 47349)). Consistent with this
response, and as indicated in the proposed rule and elsewhere in the
final rule, we believe the beginning of the newness period to commence
on the first day the AQUABEAM System was commercially available
(December 21, 2017). As noted, the later statement that the newness
period beginning date for the AQUABEAM System is April 19, 2018 was an
inadvertent error. As we indicated in the FY 2019 IPPS/LTCH PPS final
rule, we welcome further information from the applicant for
consideration regarding the beginning of the newness period.
    Because the 3-year anniversary date of the entry of the AQUABEAM
System onto the U.S. market (December 21, 2020) will occur after FY
2020, we are proposing to continue new technology add-on payments for
this technology for FY 2020. Under the proposed change to the
calculation of the new technology add on payment amount discussed in
section II.H.9. of the preamble of this proposed rule, we are proposing
that the maximum new technology add-on payment amount for a case
involving the use of the AQUABEAM System would be $1,625 for FY 2020;
that is, 65 percent of the average cost of the technology. However, if
we do not finalize the proposed change to the calculation of the new
technology add-on payment amount, we are proposing that the maximum new
technology add-on payment for a case involving the AQUABEAM System
would remain at $1,250 for FY 2020. We are inviting public comments on
our proposals to continue new technology add-on payments for the
AQUABEAM System for FY 2020.
l. AndexXaTM (Andexanet alfa)
    Portola Pharmaceuticals, Inc. (Portola) submitted an application
for new technology add-on payments for FY 2019 for the use of
AndexXaTM (Andexanet alfa).
    AndexXaTM received FDA approval on May 3, 2018, and is
indicated for use in the treatment of patients who are
[[Page 19284]]
receiving treatment with rivaroxaban and apixaban, when reversal of
anticoagulation is needed due to life-threatening or uncontrolled
bleeding.
    After evaluation of the newness, costs, and substantial clinical
improvement criteria for new technology add-on payments for
AndexXaTM and consideration of the public comments we
received in response to the FY 2019 IPPS/LTCH PPS proposed rule, we
approved AndexXaTM for new technology add-on payments for FY
2019 (83 FR 41362). Cases involving the use of AndexXaTM
that are eligible for new technology add-on payments are identified by
ICD-10-PCS procedure codes XW03372 (Introduction of Andexanet alfa,
Factor Xa inhibitor reversal agent into peripheral vein, percutaneous
approach, new technology group 2) or XW04372 (Introduction of Andexanet
alfa, Factor Xa inhibitor reversal agent into central vein,
percutaneous approach, new technology group 2). The applicant explained
that the WAC for 1 vial is $2,750, with the use of an average of 10
vials for the low dose and 18 vials for the high dose. The applicant
noted that per the clinical trial data, 90 percent of cases were
administered a low dose and 10 percent of cases were administered the
high dose. The weighted average between the low and high dose is an
average of 10.22727 vials. Therefore, the cost of a standard dosage of
AndexXaTM is $28,125 ($2,750 x 10.22727). Under existing
Sec.  412.88(a)(2), we limit new technology add-on payments to the
lesser of 50 percent of the average cost of the technology or 50
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 AndexXaTM is $14,062.50 for FY 2019.
    With regard to the newness criterion for AndexXaTM, we
consider the beginning of the newness period to commence when
AndexXaTM received FDA approval (May 3, 2018). Because the
3-year anniversary date of the entry of AndexXaTM onto the
U.S. market (May 3, 2021) will occur after FY 2020, we are proposing to
continue new technology add-on payments for this technology for FY
2020. Under the proposed change to the calculation of the new
technology add-on payment amount discussed in section II.H.9. of the
preamble of this proposed rule, we are proposing that the maximum new
technology add-on payment amount for a case involving the use of
AndexXaTM would be $18,281.25 for FY 2020; that is, 65
percent of the average cost of the technology. However, if we do not
finalize the proposed change to the calculation of the new technology
add-on payment amount, we are proposing that the maximum new technology
add-on payment for a case involving AndexXaTM would remain
at $14,062.50 for FY 2020. We are inviting public comments on our
proposals to continue new technology add-on payments for
AndexXaTM for FY 2020.
5. Proposed FY 2020 Applications for New Technology Add-On Payments
    We received 18 applications for new technology add-on payments for
FY 2020. In accordance with the regulations under Sec.  412.87(c),
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. One applicant
withdrew its application prior to the issuance of this proposed rule. A
discussion of the 17 remaining applications is presented below.
a. AZEDRA[supreg] (Ultratrace[supreg] iobenguane Iodine-131) Solution
    Progenics Pharmaceuticals, Inc. submitted an application for new
technology add-on payments for AZEDRA[supreg] (Ultratrace[supreg]
iobenguane Iodine-131) for FY 2020. (We note that Progenics
Pharmaceuticals, Inc. previously submitted an application for new
technology add-on payments for AZEDRA[supreg] for FY 2019, which was
withdrawn prior to the issuance of the FY 2019 IPPS/LTCH PPS final
rule.) AZEDRA[supreg] is a drug solution formulated for intravenous
(IV) use in the treatment of patients who have been diagnosed with
obenguane avid malignant and/or recurrent and/or unresectable
pheochromocytoma and paraganglioma. AZEDRA[supreg] contains a small
molecule ligand consisting of meta-iodobenzylguanidine (MIBG) and
\131\Iodine (\131\I) (hereafter referred to as ``\131\I-MIBG''). The
applicant noted that iobenguane Iodine-131 is also known as \131\I-
MIBG.
    The applicant reported that pheochromocytomas and paragangliomas
are rare tumors with an incidence of approximately 2 to 8 people per
million per year.1 2 Both tumors are catecholamine-secreting
neuroendocrine tumors, with pheochromocytomas being the more common of
the two and comprising 80 to 85 percent of cases. While 10 percent of
pheochromocytomas are malignant, whereby ``malignant'' is defined by
the World Health Organization (WHO) as ``the presence of distant
metastases,'' paragangliomas have a malignancy frequency of 25
percent.3 4 Approximately one-half of malignant tumors are
pronounced at diagnosis, while other malignant tumors develop slowly
within 5 years.\5\ Pheochromocytomas and paragangliomas tend to be
indistinguishable at the cellular level and frequently at the clinical
level. For example catecholamine-secreting paragangliomas often present
clinically like pheochromocytomas with hypertension, episodic headache,
sweating, tremor, and forceful palpitations.\6\ Although
pheochromocytomas and paragangliomas can share overlapping
histopathology, epidemiology, and molecular pathobiology
characteristics, there are differences between these two neuroendocrine
tumors in clinical behavior, aggressiveness and metastatic potential,
biochemical findings and association with inherited genetic syndrome
differences, highlighting the importance of distinguishing between the
presence of malignant pheochromocytoma and the presence of malignant
paraganglioma. At this time, there is no curative treatment for
malignant pheochromocytomas and paragangliomas. Successful management
of these malignancies requires a multidisciplinary approach of
decreasing tumor burden, controlling endocrine activity, and treating
debilitating symptoms. According to the applicant, decreasing
metastatic tumor burden would address the leading cause of mortality in
this patient population, where the 5-year survival rate is 50 percent
for patients with untreated malignant pheochromocytomas and
paragangliomas.\7\ The applicant stated that controlling catecholamine
[[Page 19285]]
hypersecretion (for example, severe paroxysmal or sustained
hypertension, palpitations and arrhythmias) would also mean decreasing
morbidity associated with hypertension (for example, risk of stroke,
myocardial infarction and renal failure), and begin to address the 30-
percent cardiovascular mortality rate associated with malignant
pheochromocytomas and paragangliomas.
---------------------------------------------------------------------------
    \1\ Beard, C.M., Sheps, S.G., Kurland, L.T., Carney, J.A., Lie,
J.T., ``Occurrence of pheochromocytoma in Rochester, Minnesota'',
pp. 1950-1979.
    \2\ Stenstr[ouml]m, G., Sv[auml]rdsudd, K., ``Pheochromocytoma
in Sweden 1958-1981. An analysis of the National Cancer Registry
Data,'' Acta Medica Scandinavica, 1986, vol. 220(3), pp. 225-232.
    \3\ Fishbein, Lauren, ``Pheochromocytoma and Paraganglioma,''
Hematology/Oncology Clinics 30, no. 1, 2016, pp. 135-150.
    \4\ Lloyd, R.V., Osamura, R.Y., Kl[ouml]ppel, G., & Rosai, J.
(2017). World Health Organization (WHO) Classification of Tumours of
Endocrine Organs. Lyon, France: International Agency for Research on
Center (IARC).
    \5\ Kantorovich, Vitaly, and Karel Pacak. ``Pheochromocytoma and
paraganglioma.'' Progress in Brain Research., 2010, vol. 182, pp.
343-373.
    \6\ Carty, SE, Young, W.F., Elfky, A., ``Paraganglioma and
pheochromocytoma: Management of malignant disease,'' UpToDate.
Available at: https://www.uptodate.com/contents/paraganglioma-and-pheochromocytoma-management-of-malignant-disease.
    \7\ Kantorovich, Vitaly, and Karel Pacak. ``Pheochromocytoma and
paraganglioma.'' Progress in Brain Research., 2010, vol. 182, pp.
343-373.
---------------------------------------------------------------------------
    The applicant reported that, prior to the introduction of
AZEDRA[supreg], controlling catecholamine activity in pheochromocytomas
and paragangliomas was medically achieved with administration of
combined alpha and beta-adrenergic blockade, and surgically with tumor
tissue reduction. Because there is no curative treatment for malignant
pheochromocytomas and paragangliomas, resecting both primary and
metastatic lesions whenever possible to decrease tumor burden \8\
provides a methodology for controlling catecholamine activity and
lowering cardiovascular mortality risk. Besides surgical removal of
tumor tissue for lowering tumor burden, there are other treatment
options that depend upon tumor type (that is, pheochromocytoma tumors
versus paraganglioma tumors), anatomic location, and the number and
size of the metastatic tumors. These treatment options include: (1)
Radiation therapy; (2) nonsurgical local ablative therapy with
radiofrequency ablation, cryoablation, and percutaneous ethanol
injection; (3) transarterial chemoembolization for liver metastases;
and (4) radionuclide therapy using metaiodobenzylguanidine (MIBG) or
somatostatin. Regardless of the method to reduce local tumor burden,
periprocedural medical care is needed to prevent massive catecholamine
secretion and hypertensive crisis.\9\
---------------------------------------------------------------------------
    \8\ Noda, T., Nagano, H., Miyamoto, A., et al., ``Successful
outcome after resection of liver metastasis arising from an
extraadrenal retroperitoneal paraganglioma that appeared 9 years
after surgical excision of the primary lesion,'' Int J Clin Oncol,
2009, vol. 14, pp. 473.
    \9\ Carty, SE, Young, W.F., Elfky, A., ``Paraganglioma and
pheochromocytoma: Management of malignant disease,'' UpToDate.
Available at: https://www.uptodate.com/contents/paraganglioma-and-pheochromocytoma-management-of-malignant-disease.
---------------------------------------------------------------------------
    The applicant stated that AZEDRA[supreg] specifically targets
neuroendocrine tumors arising from chromaffin cells of the adrenal
medulla (in the case of pheochromocytomas) and from neuroendocrine
cells of the extra-adrenal autonomic paraganglia (in the case of
paragangliomas).\10\ According to the applicant, AZEDRA[supreg] is a
more consistent form of 131I-MIBG compared to compounded
formulations of 131I-MIBG that are not approved by the FDA.
AZEDRA[supreg] (iobenguane I 131) (AZEDRA) was approved by the FDA on
July 30, 2018, and according to the applicant, is the first and only
drug indicated for the treatment of adult and pediatric patients 12
years and older who have been diagnosed with iobenguane scan positive,
unresectable, locally advanced or metastatic pheochromocytoma or
paraganglioma who require systemic anticancer therapy. Among local
tumor tissue reduction options, use of external beam radiation therapy
(EBRT) at doses greater than 40 Gy can provide local pheochromocytoma
and paraganglioma tumor control and relief of symptoms for tumors at a
variety of sites, including the soft tissues of the skull base and
neck, abdomen, and thorax, as well as painful bone metastases.\11\
However, the applicant stated that EBRT irradiated tissues are
unresponsive to subsequent treatment with 131I-MIBG
radionuclide.\12\ MIBG was initially used for the imaging of
paragangliomas and pheochromocytomas because of its similarity to
noradrenaline, which is taken up by chromaffin cells. Conventional MIBG
used in imaging expanded to off-label use in patients who had been
diagnosed with malignant pheochromocytomas and paragangliomas. Because
131I-MIBG is sequestered within pheochromocytoma and
paraganglioma tumors, subsequent malignant cell death occurs from
radioactivity. Approximately 50 percent of tumors are eligible for
treatment involving 131I-MIBG therapy based on having MIBG
uptake with diagnostic imaging. According to the applicant, despite
uptake by tumors, studies have also found that 131I-MIBG
therapy has been limited by total radiation dose, hematologic side
effects, and hypertension. While the pathophysiology of total radiation
dose and hematologic side effects are more readily understandable,
hypertension is believed to be precipitated by large quantities of non-
iodinated MIBG or ``cold'' MIBG being introduced along with radioactive
\131\I-MIBG therapy.\13\ The ``cold'' MIBG blocks synaptic reuptake of
norepinephrine, which can lead to tachycardia and paroxysmal
hypertension within the first 24 hours, the majority of which occur
within 30 minutes of administration and can be dose-limiting.\14\
---------------------------------------------------------------------------
    \10\ Ibid.
    \11\ Ibid.
    \12\ Fitzgerald, P.A., Goldsby, R.E., Huberty, J.P., et al.,
``Malignant pheochromocytomas and paragangliomas: a phase II study
of therapy with high-dose 131I-metaiodobenzylguanidine (131I-
MIBG),'' Ann N Y Acad Sci, 2006, vol. 1073, pp. 465.
    \13\ Loh, K.C., Fitzgerald, P.A., Matthay, K.K., Yeo, P.P.,
Price, DC, ``The treatment of malignant pheochromocytoma with
iodine-131 metaiodobenzylguanidine (\131\I-MIBG): a comprehensive
review of 116 reported patients,'' J Endocrinol Invest, 1997, vol.
20(11), pp. 648-658.
    \14\ Gonias, S, et al., ``Phase II Study of High-Dose [\131\I
]Metaiodobenzylguanidine Therapy for Patients With Metastatic
Pheochromocytoma and Paraganglioma,'' J of Clin Onc, July 27, 2009.
---------------------------------------------------------------------------
    The applicant asserted that its new proprietary manufacturing
process called Ultratrace[supreg] allows AZEDRA[supreg] to be
manufactured without the inclusion of unlabeled or ``cold'' MIBG in the
final formulation. The applicant also noted that targeted radionuclide
MIBG therapy to reduce tumor burden is one of two treatments that have
been studied the most. The other treatment is cytotoxic chemotherapy
and, specifically, Carboplatin, Vincristine, and Dacarbazine (CVD). The
applicant stated that cytotoxic chemotherapy is an option for patients
who experience symptoms with rapidly progressive, non-resectable, high
tumor burden, and that cytotoxic chemotherapy is another option for a
large number of metastatic bone lesions.\15\ According to the
applicant, CVD was believed to have an effect on malignant
pheochromocytomas and paragangliomas due to the embryonic origin being
similar to neuroblastomas. The response rates to CVD have been variable
between 25 percent and 50 percent.16 17 These patients
experience side effects consistent with chemotherapeutic treatment with
CVD, with the added concern of the precipitation of hormonal
complications such as hypertensive crisis, thereby requiring close
monitoring during cytotoxic chemotherapy.\18\ According to the
applicant, use of CVD relative to other tumor burden reduction options
is not
[[Page 19286]]
an ideal treatment because of nearly 100 percent recurrence rates, and
the need for chemotherapy cycles to be continually readministered at
the risk of increased systemic toxicities and eventual development of
resistance. Finally, there is a subgroup of patients that are
asymptomatic and have slower progressing tumors where frequent follow-
up is an option for care.\19\ Therefore, the applicant believed that
AZEDRA[supreg] offers cytotoxic radioactive therapy for the indicated
population that avoids harmful side effects that typically result from
use of low-specific activity products.
---------------------------------------------------------------------------
    \15\ Carty, SE, Young, W.F., Elfky, A., ``Paraganglioma and
pheochromocytoma: Management of malignant disease,'' UpToDate.
Available at: https://www.uptodate.com/contents/paraganglioma-and-pheochromocytoma-management-of-malignant-disease.
    \16\ Niemeijer, N.D., Alblas, G., Hulsteijn, L.T., Dekkers, O.M.
and Corssmit, E.P. M., ``Chemotherapy with cyclophosphamide,
vincristine and dacarbazine for malignant paraganglioma and
pheochromocytoma: systematic review and meta[hyphen]analysis,''
Clinical endocrinology, 2014, vol 81(5), pp. 642-651.
    \17\ Ayala-Ramirez, Montserrat, et al., ``Clinical Benefits of
Systemic Chemotherapy for Patients with Metastatic Pheochromocytomas
or Sympathetic Extra-Adrenal Paragangliomas: Insights from the
Largest Single Institutional Experience,'' Cancer, 2012, vol.
118(11), pp. 2804-2812.
    \18\ Wu, L.T., Dicpinigaitis, P., Bruckner, H., et al.,
``Hypertensive crises induced by treatment of malignant
pheochromocytoma with a combination of cyclophosphamide,
vincristine, and dacarbazine,'' Med Pediatr Oncol, 1994, vol. 22(6),
pp. 389-392.
    \19\ Carty, SE, Young, W.F., Elfky, A., ``Paraganglioma and
pheochromocytoma: Management of malignant disease,'' UpToDate.
Available at: https://www.uptodate.com/contents/paraganglioma-and-pheochromocytoma-management-of-malignant-disease.
---------------------------------------------------------------------------
    The applicant reported that the recommended AZEDRA[supreg] dosage
and frequency for patients receiving treatment involving \131\I-MIBG
therapy for a diagnosis of avid malignant and/or recurrent and/or
unresectable pheochromocytoma and paraganglioma tumors is:
     Dosimetric Dosing--5 to 6 micro curies (mCi) (185 to 222
MBq) for a patient weighing more than or equal to 50 kg, and 0.1 mCi/kg
(3.7 MBq/kg) for patients weighing less than 50 kg. Each recommended
dosimetric dose is administered as an IV injection.
     Therapeutic Dosing--500 mCi (18.5 GBq) for patients
weighing more than 62.5 kg, and 8 mCi/kg (296 MBq/kg) for patients
weighing less than or equal to 62.5 kg. Therapeutic doses are
administered by IV infusion, in ~50 mL over a period of ~30 minutes
(100 mL/hour), administered approximately 90 days apart.
    With respect to the newness criterion, the applicant indicated that
FDA granted Orphan Drug designation for AZEDRA[supreg] on January 18,
2006, followed by Fast Track designation on March 8, 2006, and
Breakthrough Therapy designation on July 26, 2015. The applicant's New
Drug Application (NDA) proceeded on a rolling basis, and was completed
on November 2, 2017. AZEDRA[supreg] was approved by the FDA on July 30,
2018, for the treatment of adult and pediatric patients 12 years and
older who have been diagnosed with iobenguane scan positive,
unresectable, locally advanced or metastatic pheochromocytoma or
paraganglioma who require systemic anticancer therapy through a New
Drug Approval (NDA) filed under Section 505(b)(1) of the Federal Food,
Drug and Cosmetic Act and 21 CFR 314.50. Currently, there are no
approved ICD-10-PCS procedure codes to uniquely identify procedures
involving the administration of AZEDRA[supreg]. We note that the
applicant submitted a request for approval for a unique ICD-10-PCS code
for the administration of AZEDRA[supreg] beginning in FY 2020.
    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 regard to the first criterion, whether a product uses the same
or similar mechanism of action, the applicant stated that while
AZEDRA[supreg] and low-specific activity conventional I-131 MIBG both
target the same transporter sites on the tumor cell surface, the
therapies' safety and efficacy outcomes are different. These
differences in outcomes are because AZEDRA[supreg] is manufactured
using the proprietary Ultratrace[supreg] technology, which maximizes
the molecules that carry the tumoricidal component (I-131 MIBG) and
minimizes the extraneous unlabeled component (MIBG, free ligands),
which could cause cardiovascular side effects. Therefore, according to
the applicant, AZEDRA[supreg] is designed to increase efficacy and
decrease safety risks, whereas conventional I-131 MIBG uses existing
technologies and results in a product that overwhelms the normal
reuptake system with excess free ligands, which leads to safety issues
as well as decreasing the probability of the \131\I-MIBG binding to the
tumor cells.
    With regard to the second criterion, whether a product is assigned
to the same or a different MS-DRG, the applicant noted that there are
no specific MS-DRGs for the assignment of cases involving the treatment
of patients who have been diagnosed with pheochromocytoma and
paraganglioma. We believe that potential cases representing patients
who may be eligible for treatment involving the administration of
AZEDRA[supreg] would be assigned to the same MS-DRGs as cases
representing patients who receive treatment for a diagnosis of
iobenguane avid malignant and/or recurrent and/or unresectable
pheochromocytoma and paraganglioma. We also refer readers to the cost
criterion discussion below, which includes the applicant's list of the
MS-DRGs to which potential cases involving treatment with the
administration of AZEDRA[supreg] most likely would map.
    With regard to the third criterion, whether the new use of the
technology involves the treatment of the same or similar type of
disease and the same or similar patient population, according to the
applicant, AZEDRA[supreg] is the only FDA-approved drug indicated for
use in the treatment of patients who have been diagnosed with malignant
pheochromocytoma and paraganglioma tumors that avidly take up \131\I-
MIBG and are recurrent and/or unresectable. The applicant stated that
these patients face serious mortality and morbidity risks if left
untreated, as well as potentially suffer from side effects if treated
by available off-label therapies.
    The applicant also contended that AZEDRA[supreg] can be
distinguished from other currently available treatments because it
potentially provides the following advantages:
     AZEDRA[supreg] will have a very limited impact on normal
norepinephrine reuptake due to the negligible amount of unlabeled MIBG
present in the dose. Therefore, AZEDRA[supreg] is expected to pose a
much lower risk of acute drug-induced hypertension.
     There is minimal unlabeled MIBG to compete for the
norepinephrine transporter binding sites in the tumor, resulting in
more effective delivery of radioactivity.
     Current off-label therapeutic use of \131\I is compounded
by individual pharmacies with varied quality and conformance standards.
     Because of its higher specific activity (the activity of a
given radioisotope per unit mass), AZEDRA[supreg] infusion times are
significantly shorter than conventional \131\I administrations.
    Therefore, with these potential advantages, the applicant
maintained that AZEDRA[supreg] represents an option for the treatment
of patients who have been diagnosed with malignant and/or recurrent
and/or unresectable pheochromocytoma and paraganglioma tumors, where
there is a clear, unmet medical need.
    For the reasons cited earlier, the applicant believed that
AZEDRA[supreg] is not substantially similar to other currently
available therapies and/or technologies and meets the ``newness''
criterion. We are inviting public comments on whether AZEDRA[supreg] is
substantially similar to other currently available therapies and/or
technologies and meets the ``newness'' criterion.
    With regard to the cost criterion, the applicant conducted an
analysis using FY 2015 MedPAR data to demonstrate that AZEDRA[supreg]
meets the cost criterion.
    The applicant searched for potential cases representing patients
who may be eligible for treatment involving AZEDRA[supreg] that had one
of the following ICD-9-CM diagnosis codes (which the applicant believed
is indicative of
[[Page 19287]]
diagnosis appropriate for treatment involving AZEDRA[supreg]): 194.0
(Malignant neoplasm of adrenal gland), 194.6 (Malignant neoplasm of
aortic body and other paraganglia), 209.29 (Malignant carcinoid tumor
of other sites), 209.30 (Malignant poorly differentiated neuroendocrine
carcinoma, any site), 227.0 (Benign neoplasm of adrenal gland), 237.3
(Neoplasm of uncertain behavior of paraganglia)--in combination with
one of the following ICD-9-CM procedure codes describing the
administration of a radiopharmaceutical: 00.15 (High-dose infusion
interleukin-2); 92.20 (Infusion of liquid brachytherapy radioisotope);
92.23 (Radioisotopic teleradiotherapy); 92.27 (Implantation or
insertion of radioactive elements); 92.28 (Injection or instillation of
radioisotopes). The applicant reported that the potential cases used
for this analysis mapped to MS-DRGs 054 and 055 (Nervous System
Neoplasms with and without MCC, respectively), MS-DRG 271 (Other Major
Cardiovascular Procedures with CC), MS-DRG 436 (Malignancy of
Hepatobiliary System or Pancreas with CC), MS-DRG 827
(Myeloproliferative Disorders or Poorly Differentiated Neoplasms with
Major O.R. Procedure with CC), and MS-DRG 843 (Other Myeloproliferative
Disorders or Poorly Differentiated Neoplastic Diagnosis with MCC). Due
to patient privacy concerns, because the number of cases under each MS-
DRG was less than 11 in total, the applicant assumed an equal
distribution between these 6 MS-DRGs. Based on the FY 2019 IPPS/LTCH
PPS final rule correction notice data file thresholds, the average
case-weighted threshold amount was $60,136. Using the identified cases,
the applicant determined that the average unstandardized charge per
case ranged from $21,958 to $152,238 for the 6 evaluated MS-DRGs. After
removing charges estimated to be associated with precursor agents, the
applicant used a 3-year inflation factor of 1.1436 (a yearly inflation
factor of 1.04574 applied over 3 years), based on the FY 2018 IPPS/LTCH
PPS final rule (82 FR 38527), to inflate the charges from FY 2015 to FY
2018. The applicant provided an estimated average of $151,000 per
therapeutic dose per patient, based on the wholesale acquisition cost
of the drug and the average dosage amount for most patients, with a
total cost per patient estimated to be approximately $980,000. After
including the cost of the technology, the applicant determined an
inflated average case-weighted standardized charge per case of
$1,078,631.
    We are concerned with the limited number of cases the applicant
analyzed. However, we acknowledge the difficulty in obtaining cost data
for such a rare condition. We are inviting public comments on whether
the AZEDRA[supreg] technology meets the cost criterion.
    With regard to substantial clinical improvement, the applicant
maintained that the use of AZEDRA[supreg] has been shown to reduce the
incidence of hypertensive episodes and use of antihypertensive
medications, reduce tumor size, improve blood pressure control, and
reduce secretion of tumor biomarkers. In addition, the applicant
asserted that AZEDRA[supreg] provides a treatment option for those
outlined in its indication patient population. The applicant asserted
that AZEDRA[supreg] meets the substantial clinical improvement
criterion based on the results from two clinical studies: (1) MIP-IB12
(IB12): A Phase I Study of Iobenguane (MIBG) I-131 in Patients With
Malignant Pheochromocytoma/Paraganglioma; \20\ and (2) MIP-IB12B
(IB12B): A Study Evaluating Ultratrace[supreg] Iobenguane I-131 in
Patients With Malignant Relapsed/Refractory Pheochromocytoma/
Paraganglioma. The applicant explained that the IB12B study is similar
to the IB12 study in that both studies evaluated two open-label,
single-arm studies. The applicant reported that both studies included
patients who had been diagnosed with malignant and/or recurrent and/or
unresectable pheochromocytoma and paraganglioma tumors, and both
studies assessed objective tumor response, biochemical tumor response,
overall survival rates, occurrence of hypertensive crisis, and the
long-term benefit of AZEDRA[supreg] treatment relative to the need for
antihypertensives. However, according to the applicant, the study
designs differed in dose regimens (1 dose administered to patients in
the IB12 study, and 2 doses administered to patients in the IB12B
study) and primary study endpoints. Differences in the designs of the
studies prevented direct comparison of study endpoints and pooling of
the data. In addition, the applicant stated that results from safety
data from the IB12 study and the IB12B study were pooled and used to
support substantial clinical improvement assertions. We note that
neither the IB12 study nor the IB12B study compared the effects of the
use of AZEDRA[supreg] to any of the other treatment options to decrease
tumor burden (for example, cytotoxic chemotherapy, radiation therapy,
and surgical debulking).
---------------------------------------------------------------------------
    \20\ Noto, Richard B., et. al., ``Phase 1 Study of High-
Specific-Activity I-131 MIBG for Metastatic and/or Recurrent
Pheochromocytoma or Paraganglioma (IB12 Phase 1 Study),'' J Clin
Endocrinol Metab, vol. 103(1), pp. 213-220.
---------------------------------------------------------------------------
    Regarding the data results from the IB12 study, the applicant
asserted that, based on the reported safety and tolerability, and
primary endpoint of radiological response at 12 months, high-specific-
activity I-131 MIBG may be an effective alternative therapeutic option
for patients who have been diagnosed with iobenguane-avid, metastatic
and/or recurrent pheochromocytoma and paraganglioma tumors for whom
there are no other approved therapies and for those patients who have
failed available treatment options. In addition, the applicant used the
exploratory finding of decreased or discontinuation of anti-
hypertensive medications relative to baseline medications as evidence
that AZEDRA[supreg] has clinical benefit and positive impact on the
long-term effects of hypertension induced norepinephrine producing
malignant pheochromocytoma and paraganglioma tumors. We understand that
the applicant used antihypertensive medications as a proxy to assess
the long-term effects of hypertension such as renal, myocardial, and
cerebral end organ damage. The applicant reported that it studied 15 of
the original IB12 study's 21-patient cohort, and found 33 percent (n=5)
had decreased or discontinuation of antihypertensive medications during
the 12 months of follow-up. However, the applicant did not provide
additional data on the incidence of renal insufficiency/failure,
myocardial ischemic/infarction events, or transient ischemic attacks or
strokes. Therefore, it is unclear to us if these five patients also had
decreased urine metanephrines, changed their diet, lost significant
weight, or if other underlying comorbidities that influence
hypertension were resolved, making it difficult to understand the
significance of this exploratory finding.
    Regarding the applicant's assertion that the use of AZEDRA[supreg]
is safer and more effective than alternative therapies, we note that
the IB12 study was a dose-escalating study and did not compare current
therapies with the use of AZEDRA[supreg]. We also note the following:
(1) The average age of the 21 enrolled patients in the IB12 study was
50.4 years old (a range of 30 to 72 years old); (2) the gender
distribution was 61.9 percent (n=13) male and 38.1 percent (n=8)
female; and (3) 76.2 percent (n=16) were white, 14.3 percent (n=3) were
black or African American, and 9.5 percent (n=2) were Asian. We
[[Page 19288]]
agree with the study's conductor \21\ that the size of the study is a
limitation, and with a younger, predominately white, male patient
population, generalization of study results to a more diverse
population may be difficult. The applicant reported that one other
aspect of the patient population indicated that all 21 patients
received prior anti-cancer therapy for treatment of malignant
pheochromocytoma and paraganglioma tumors, which included the
following: 57.1 percent (n=12) received radiation therapy including
external beam radiation and conventional MIBG; 28.6 percent (n=6)
received cytotoxic chemotherapy (for example, CVD and other
chemotherapeutic agents); and 14.3 percent (n=3) received
Octreotide.\22\ Although this study's patient population illustrates a
population that has failed some of the currently available therapy
options, which may potentially support a finding of substantial
clinical improvement for those with no other treatment options, we are
unclear which patients benefited from treatment involving
AZEDRA[supreg], especially in view of the finding of a Fitzgerald, et
al. study cited earlier \23\ that concluded tissues previously
irradiated by EBRT were found to be unresponsive to subsequent
treatment with \131\I-MIBG radionuclide. It was not clear in the
application how previously EBRT-treated patients who failed EBRT fared
with the Response Evaluation Criteria in Solid Tumors (RECIST) scores,
biotumor marker results, and reduction in antihypertensive medications.
We also lacked information to draw the same correlation between
previously CVD-treated patients and their RECIST scores, biotumor
marker results, and reduction in antihypertensive medications.
---------------------------------------------------------------------------
    \21\ Noto, Richard B., et al., ``Phase 1 Study of High-Specific-
Activity I-131 MIBG for Metastatic and/or Recurrent Pheochromocytoma
or Paraganglioma (IB12 Phase 1 Study),'' J Clin Endocrinol Metab,
vol. 103(1), pp. 213-220.
    \22\ Ibid.
    \23\ Fitzgerald, P.A., Goldsby, R.E., Huberty, J.P., et al.,
``Malignant pheochromocytomas and paragangliomas: a phase II study
of therapy with high-dose 131I-metaiodobenzylguanidine (131I-
MIBG).'' Ann N Y Acad Sci, 2006, vol. 1073, pp. 465.
---------------------------------------------------------------------------
    The applicant asserted that the use of AZEDRA[supreg] reduces tumor
size and reduces the secretion of tumor biomarkers, thereby providing
important clinical benefits to patients. The IB12 study assessed the
overall best tumor response based on RECIST.\24\ Tumor biomarker
response was assessed as complete or partial response for serum
chromogranin A and total metanephrines in 80 percent and 64 percent of
patients, respectively. The applicant noted that both the overall best
tumor response based on RECIST and tumor biomarker response favorable
results are at doses higher than 500 mCi. We noticed that tumor burden
improvement, as measured by RECIST criteria, showed that none of the 21
patients achieved a complete response. In addition, although 4 patients
showed partial response, these 4 patients also experienced dose-
limiting toxicity with hematological events, and all 4 patients
received administered doses greater than 18.5 GBq (500 mCi). We also
note that, regardless of total administered activity (for example,
greater than or less than 18.5 GBq (500 mCi)), 61.9 percent (n=13) of
the 21 patients enrolled in the study had stable disease and 14.3
percent (n=2) of the 14 patients who received greater than administered
doses of 18.5 GBq (500 mCi) had progressive disease. Finally, we also
noticed that, for most tumor biomarkers, there were no dose
relationship trends. While we appreciate the applicant's contention
that there is no other FDA-approved drug therapy for patients who have
been diagnosed with \131\I-MIBG avid malignant and/or recurrent and/or
unresectable pheochromocytoma and paraganglioma tumors, we have
questions as to whether the overall tumor best response and overall
best tumor biomarker data results from the IB12 study support a finding
that the use of the AZEDRA[supreg] technology represents a substantial
clinical improvement.
---------------------------------------------------------------------------
    \24\ Therasse, P., Arbuck, S.G., Eisenhauer, J.W., Kaplan, R.S.,
Rubinsten, L., Verweij, J., Van Blabbeke, M., Van Oosterom, A.T.,
Christian, M.D., and Gwyther, S.G., ``New guidelines to evaluate the
response to treatment in solid tumors,'' J Natl Cancer Inst, 2000,
vol. 92(3), pp. 205-16. Available at: http://www.eortc.be/Services/Doc/RECIST.pdf.
---------------------------------------------------------------------------
    Finally, regarding the applicant's assertion that, based on the
IB12 study data, AZEDRA[supreg] provides a safe alternative therapy for
those patients who have failed other currently available treatment
therapies, we note that none of the patients experienced hypertensive
crisis, and that 76 percent (n=16) of the 21 patients enrolled in the
study experienced Grade III or IV adverse events. Although the
applicant indicated the adverse events were related to the study drug,
the applicant also noted that there was no statistically significant
difference between the greater than or less than 18.5 GBq administered
doses; both groups had adverse events rates greater than 75 percent.
Specifically, 5 of 7 patients (76 percent) who received less than or
equal to 18.5 GBq administered doses, and 11 of 14 patients (79
percent) who received greater than 18.5 GBq administered doses
experienced Grade III or IV adverse advents. The most common (greater
than or equal to 10 percent) Grade III and IV adverse events were
neutropenia, leukopenia, thrombocytopenia, nausea, and vomiting. We
also note that: (1) There were 5 deaths during the study that occurred
from approximately 2.5 months up to 22 months after treatment and there
was no detailed data regarding the 5 deaths, especially related to the
total activity received during the study; (2) there was no information
about which patients received prior radiation therapy with EBRT and/or
conventional MIBG relative to those who experienced Grade III or IV
adverse events; and (3) the total lifetime radiation dose was not
provided by the applicant. We are inviting public comments on whether
the safety data profile from the IB12 study supports a finding that the
use of AZEDRA[supreg] represents a substantial clinical improvement for
patients who received treatment with \131\I-MIBG for a diagnosis of
avid malignant and/or recurrent and/or unresectable pheochromocytoma
and paraganglioma tumors, given the risks for Grade III or IV adverse
events.
    The applicant provided study data results from the IB12B study
(MIP-IB12B), an open-label, prospective 5-year follow-up, single-arm,
multi-center, Phase II pivotal study to evaluate the safety and
efficacy of the use of AZEDRA[supreg] for the treatment of patients who
have been diagnosed with malignant and/or recurrent pheochromocytoma
and paraganglioma tumors to support the assertion of substantial
clinical improvement. The applicant reported that the IB12B's primary
endpoint is the proportion of patients with a reduction (including
discontinuation) of all anti-hypertensive medication by at least 50
percent for at least 6 months. Seventy-four patients who received at
least 1 dosimetric dose of AZEDRA[supreg] were evaluated for safety and
68 patients who received at least 1 therapeutic dose of AZEDRA[supreg],
each at 500 mCi (or 8 mCi/kg for patients weighing less than or equal
to 62.5 kg), were assessed for specific clinical outcomes. The
applicant asserted that results from this prospective study met the
primary endpoint (reduction or discontinuation of anti-hypertensive
medications), as well as demonstrated strong supportive evidence from
key secondary endpoints (overall tumor response, tumor biomarker
response, and overall survival rates) that confers important clinical
relevance to patients
[[Page 19289]]
who have been diagnosed with malignant pheochromocytoma and
paraganglioma tumors. The applicant also indicated that the use of
AZEDRA[supreg] was shown to be generally well tolerated at doses
administered at 8 mCi/kg. We note that the data results from the IB12B
study did not have a comparator arm, making it difficult to interpret
the clinical outcome data relative to other currently available
therapies.
    As discussed for the IB12 study, the applicant reported that
antihypertension treatment was a proxy for effectiveness of the use of
AZEDRA[supreg] on norepinephrine induced hypertension producing tumors.
In the IB12B study, 25 percent (17/68) of patients met the primary
endpoint of having a greater than 50 percent reduction in anti-
hypertensive agents for at least 6 months. The applicant further
indicated that an additional 16 patients showed a greater than 50
percent reduction in anti-hypertensive agents for less than 6 months,
and by pooling data results from these 33 patients the applicant
concluded that 49 percent (33/68) of patients achieved a greater than
50 percent reduction at any time during the study's 12-month follow-up
period. The study's primary endpoint data also revealed that 11 percent
of the 88 patients who received a therapeutic dose of AZEDRA[supreg]
experienced a worsening of preexisting hypertension defined as an
increase in systolic blood pressure to >=160 mmHg with an increase of
20 mmHg or an increase in diastolic blood pressure >= 00 mmHg with an
increase of 10 mmHg. All changes in blood pressure occurred within the
first 24 hours post infusion. The applicant further compared its data
results from the IB12B study regarding antihypertension medication and
the frequency of post-infusion hypertension with published studies on
MIBG and CVD therapy. The applicant noted a retrospective analysis of
CVD therapy of 52 patients who had been diagnosed with metastatic
pheochromocytoma and paraganglioma tumors that found only 15 percent of
CVD-treated patients achieved a 50-percent reduction in anti-
hypertensive agents. The applicant also compared its data results for
post-infusion hypertension with literature reporting on MIBG and found
14 and 19 percent (depending on the study) of patients receiving MIBG
experience hypertension within 24 hours of infusion. Comparatively, the
applicant stated that the use of AZEDRA[supreg] had no acute events of
hypertension following infusion. We are inviting public comments on
whether these data results regarding hypertension support a finding
that the use of the AZEDRA[supreg] technology represents a substantial
clinical improvement, and if anti-hypertensive medication reduction is
an adequate proxy for improvement in renal, cerebral, and myocardial
end organ damage.
    Regarding reduction in tumor burden (as defined by RECIST scores),
the applicant indicated that at the conclusion of the IB12B study's 12-
month follow-up period, 23.4 percent (n=15) of the 68 patients showed a
partial response, 68.8 percent (n=44) of the 68 patients achieved
stable disease, and 4.7 percent (n=3) of the 68 patients showed
progressive disease. None of the patients showed completed response.
The applicant maintained that achieving stable disease is important for
patients who have been treated for malignant pheochromocytoma and
paraganglioma tumors because this is a progressive disease without a
cure at this time. The applicant also indicated that literature shows
that stable disease is maintained in approximately 47 percent of
treatment na[iuml]ve patients who have been diagnosed with metastatic
pheochromocytoma and paraganglioma tumors at 1 year due to the indolent
nature of the disease.\25\ In the IB12B study, the data results equated
to 23 percent of patients achieving partial response and 69 percent of
patients achieving stable disease. According to the applicant, this
compares favorably to treatment with both conventional radiolabeled
MIBG and CVD chemotherapy.
---------------------------------------------------------------------------
    \25\ Hescot, S., Leboulleux, S., Amar, L., Vezzosi, D., Borget,
I., Bournaud-Salinas, C., de la Fouchardiere, C., Lib[eacute], R.,
Do Cao, C., Niccoli, P., Tabarin, A., ``One-year progression-free
survival of therapy-naive patients with malignant pheochromocytoma
and paraganglioma,'' The J Clin Endocrinol Metab, 2013, vol. 98(10),
pp. 4006-4012.
---------------------------------------------------------------------------
    The applicant stated that the data results demonstrated effective
tumor response rates. The applicant reported that the IB12 and IB12B
study data showed overall tumor response rates of 80 percent and 92
percent, respectively. In addition, the applicant contended that the
study data across both trials show that patients demonstrated improved
blood pressure control, reductions in tumor biomarker secretion, and
strong evidence in overall survival rates. The overall median time to
death from the first dose was 36.7 months in all treated patients.
Patients who received 2 therapeutic doses had an overall median
survival rate of 48.7 months, compared to 17.5 months for patients who
only received a single dose. We note that the IB12B study reported 12-
month Kaplan-Meier estimate of survival of 91 percent, while the drug
dosing study IB12 reported overall subject survival of 86 percent at 12
months, 62 percent at 24 months, 38 percent at 36 months, and 4.8
percent at 48 months. We also note that only 45 of 68 patients who
received at least 1 therapeutic dose completed the 12-month efficacy
phase.
    The applicant indicated that comparison of the IB12B study data
regarding overall survival rate with historical data is difficult due
to the differences in the retrospective nature of the published
clinical studies and heterogeneous patient characteristics, especially
when overall survival is calculated from the time of initial diagnosis.
We agree with the applicant regarding the difficulties in comparing the
results of the published clinical studies, and also believe that the
differences in these studies may make it more difficult to evaluate
whether the use of the AZEDRA[supreg] technology improves overall
survival rates relative to other therapies.
    We acknowledge the challenges with constructing robust clinical
studies due to the extremely rare occurrence of patients who have been
diagnosed with pheochromocytoma and paraganglioma tumors. However, we
are concerned that because the data for both of these studies is mainly
based upon retrospective studies and small, heterogeneous patient
cohorts, it is difficult to draw precise conclusions regarding
efficacy. Only very limited nonpublished data from two, single-arm,
noncomparative studies are available to evaluate the safety and
effectiveness of AZEDRA[supreg], leading to a comparison of outcomes
with historical controls.
    We are inviting public comments on whether the use of the
AZEDRA[supreg] technology meets the substantial clinical improvement
criterion, including with respect to the specific concerns we have
raised. We did not receive any written comments in response to the New
Technology Town Hall meeting notice published in the Federal Register
regarding the substantial clinical improvement criterion for
AZEDRA[supreg] or at the New Technology Town Hall meeting.
b. CABLIVI[supreg] (caplacizumab-yhdp)
    The Sanofi Company submitted an application for new technology add-
on payments for CABLIVI[supreg] (caplacizumab-yhdp) for FY 2020. The
applicant described CABLIVI[supreg] as a humanized bivalent nanobody
consisting of two identical building blocks joined by a tri alanine
linker, which is administered through intravenous and subcutaneous
[[Page 19290]]
injection to inhibit microclot formation in adult patients who have
been diagnosed with acquired thrombotic thrombocytopenic purpura
(aTTP). The applicant stated that aTTP is a life-threatening, immune-
mediated thrombotic microangiopathy characterized by severe
thrombocytopenia, hemolytic anemia, and organ ischemia with an
estimated 3 to 11 cases per million per year in the U.K. and
U.S.26 27 28 Further, the applicant stated that aTTP is an
ultra-orphan disease caused by inhibitory autoantibodies to von
Willebrand Factor-cleaving protease (vWFCP) also known as ``a
disintegrin and metalloprotease with thrombospondin type 1 motif,
member 13 (ADAMTS13),'' resulting in a severe deficiency in WFCP. The
applicant further explained that von Willebrand Factor (vWF) is a key
protein in hemostasis and is an adhesive, multimeric plasma
glycoprotein with a pivotal role in the recruitment of platelets to
sites of vascular injury. According to the applicant, more than 90
percent of circulating vWF is expressed by endothelial cells and
secreted into the systemic circulation as ultra-large von Willebrand
Factor (ULvWF) multimers. The applicant stated that decreased ADAMTS13
activity leads to an accumulation of ULvWF multimers, which bind to
platelets and induce platelet aggregation. According to the applicant,
the consumption of platelets in these microthrombi causes severe
thrombocytopenia, tissue ischemia and organ dysfunction (commonly
involving the brain, heart, and kidneys) and may result in acute
thromboembolic events such as stroke, myocardial infarction, venous
thrombosis, and early death. The applicant indicated that the
aforementioned tissue and organ damage resulting from the ischemia
leads to increased levels of lactate dehydrogenase (LDH), troponins,
and creatinine (organ damage markers) and that faster normalization of
these organ damage markers and platelet counts is believed to be linked
with faster resolution of the ongoing microthrombotic process and the
associated tissue ischemia. According to the applicant, in diagnoses of
aTTP there is no consensual, validated surrogate marker that defines
the subpopulation at greatest risk of death or significant morbidity.
Therefore, the applicant stated that all patients who have been
diagnosed with aTTP should be considered severe cases and treated in
order to prevent death and significant morbidity.
---------------------------------------------------------------------------
    \26\ Scully, M., et al., ``Regional UK TTP registry: correlation
with laboratory ADAMTS 13 analysis and clinical Features,'' Br. J.
Haematol., 2008, vol. 142(5), pp. 819-26.
    \27\ Reese, J.A., et al., ``Children and adults with thrombotic
thrombocytopenic purpura associated with severe, acquired Adamts13
deficiency: comparison of incidence, demographic and clinical
features,'' Pediatr. Blood Cancer, 2013, vol. 60(10), pp. 1676-82.
    \28\ Terrell, D.R., et al., ``The incidence of thrombotic
thrombocytopenic purpura-hemolytic uremic syndrome: all patients,
idiopathic patients, and patients with severe ADAMTS-13
deficiency,'' J. Thromb. Haemost., 2005, vol. 3(7), pp. 1432-6.
---------------------------------------------------------------------------
    The applicant explained that the two standard-of-care (SOC)
treatment options for a diagnosis of aTTP are plasma exchange (PE), in
which a patient's blood plasma is removed through apheresis and is
replaced with donor plasma, and immunosuppression (for example,
corticosteroids and increasingly also rituximab), which is often
administered as adjunct to plasma exchange in the treatment for a
diagnosis of aTTP.29 30 According to the applicant, despite
the current SOC treatment options, acute aTTP episodes are still
associated with a mortality rate of up to 20 percent, which generally
occurs within the first weeks of diagnosis. The applicant asserted
that, although the 20-percent mortality rate reflects substantial
improvement because of PE treatment, in spite of greater understanding
of disease pathogenesis and the use of newer immunosuppressants, the
mortality rate has not been further
improved.31 32 33 34 35 36 The applicant also noted that
another important limitation of the currently available therapies (PE
and immunosuppression) is the delayed onset of effect of days to weeks
of these therapies because such therapies do not directly address the
pathophysiological platelet aggregation that leads to the formation of
microthrombi, which is ultimately associated with death or with the
severe outcomes reported with diagnoses of aTTP. The applicant
explained that despite current treatment, exacerbation and relapse
occur and frequently lead to hospitalization and the need to restart
daily PE treatment and optimize immunosuppression. In addition, the
applicant noted that patients may experience exacerbations after
discontinuing plasma exchange treatment due to continuing formation of
microthrombi as a result of unresolved underlying autoimmune disease,
and patients remain at risk of thrombotic complications or early death
until the episode is completely resolved.\37\
---------------------------------------------------------------------------
    \29\ Scully, M., et al., ``Guidelines on the diagnosis and
management of thrombotic thrombocytopenic purpura and other
thrombotic microangiopathies,'' Br. J. Haematol., 2012, vol. 158(3),
pp. 323-35.
    \30\ George, J.N., ``Corticosteroids and rituximab as adjunctive
treatments for thrombotic thrombocytopenic Purpura,'' Am. J.
Hematol., 2012, vol. 87 Suppl 1, pp. S88-91.
    \31\ Form for Notification of a Compassionate Use Programme to
the Paul-Ehrlich-Institut.
    \32\ Benhamou, Y., et al., ``Cardiac troponin-I on diagnosis
predicts early death and refractoriness in acquired thrombotic
thrombocytopenic purpura. Experience of the French Thrombotic
Microangiopathies Reference Center,'' J. Thromb. Haemost., 2015,
vol. 13(2), pp. 293-302.
    \33\ Han, B., et al., ``Depression and cognitive impairment
following recovery from thrombotic thrombocytopenic purpura,'' Am.
J. of Hematol., 2015, vol. 90(8), pp. 709-14.
    \34\ Rajan, S.K., ``BMJ Best Practice; Thrombotic
thrombocyopenic purpura,'' May 27, 2016.
    \35\ Goel, R., et al., ``Prognostic risk-stratified score for
predicting mortality in hospitalized patients with thrombotic
thrombocytopenic purpura: nationally representative data from 2007
to 2012,'' Transfusion, 2016, vol. 56(6), pp. 1451-8.
    \36\ Rock, G.A., Shumak, K.H., Buskard, N.A., et al.,
``Comparison of plasma exchange with plasma infusion in the
treatment of thrombotic thrombocytopenic purpura. Canadian Apheresis
Study Group,'' N Engl J Med, 1991, vol. 325, pp. 393-397.
    \37\ Goel, R., et al., ``Prognostic risk-stratified score for
predicting mortality in hospitalized patients with thrombotic
thrombocytopenic purpura: nationally representative data from 2007
to 2012,'' Transfusion, 2016, vol. 56(6), pp. 1451-8.
---------------------------------------------------------------------------
    According to the information provided by the applicant,
CABLIVI[supreg] is administered as an adjunct to PE treatment and
immunosuppressive therapy immediately upon diagnosis of aTTP through a
bolus intraveneous injection for the first dose and subcutaneous
injection for all subsequent doses. The recommended treatment regimen
and dosage of CABLIVI[supreg] consists of administering 10 mg on the
first day of treatment via intravenous injection prior to the standard
plasma exchange treatment. After completion of PE treatment on the
first day, a 10 mg subcutaneous injection is administered. After the
first day, and for the rest of the plasma exchange treatment period, a
daily 10 mg subcutaneous injection is administered following each day's
PE treatment. After the PE treatment period is completed, a daily 10 mg
subcutaneous injection is administered for 30 days. If the underlying
immunological disease (aTTP) is not resolved, the treatment period
should be extended beyond 30 days and be accompanied by optimization of
immunosuppression (another SOC treatment option, in addition to PE
treatment). According to the applicant and as discussed later, the use
of CABLIVI[supreg] produces faster normalization of platelet count
response compared to that of SOC treatment options alone. The applicant
indicated that this contributes to a decrease in the
[[Page 19291]]
length of the SOC treatment period with respect to the number of days
of PE treatment, the mean length of intensive care unit stays, and the
mean length of hospitalizations.
    With respect to the newness criterion, CABLIVI[supreg] received FDA
approval on February 6, 2019, for the treatment of adult patients who
have been diagnosed with aTTP, in combination with plasma exchange and
immunosuppressive therapy. According to information provided by the
applicant, CABLIVI[supreg] was previously granted Fast Track and Orphan
Drug designations in the United States for the treatment of aTTP by the
FDA and Orphan Drug designation in Europe for the treatment of aTTP.
Currently, there are no ICD-10-PCS procedure codes to uniquely identify
procedures involving CABLIVI[supreg]. We note that the applicant
submitted a request for approval for a unique ICD-10-PCS procedure code
for the administration of CABLIVI[supreg] beginning in FY 2020.
    As discussed above, 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 regard to the first criterion, whether a product uses the same
or a similar mechanism of action to achieve a therapeutic outcome,
according to the applicant, CABLIVI[supreg] is a first-in-class therapy
with an innovative mechanism of action. The applicant explained that
CABLIVI[supreg] binds to the A1 domain of vWF and specifically inhibits
the interaction between vWF and platelets. Furthermore, the applicant
indicated that in patients who have been diagnosed with aTTP,
proteolysis of ULvWF multimers by ADAMTS13 is impaired due to the
presence of inhibiting or clearing anti-ADAMTS13 auto-antibodies,
resulting in the persistence of the constitutively active A1 domain
and, as a consequence, platelets spontaneously bind to ULvWF and
generate microvascular blood clots in high shear blood vessels. The
applicant noted that CABLIVI[supreg] is able to interact with vWF in
both its active (that is, ULvWF multimers or normal multimers activated
through immobilization or shear stress) and inactive forms (that is,
multimers prior to conformational change of the A1 domain), thereby
immediately blocking the interaction of vWF with the platelet receptor
(GPIb-IX-V) and further preventing spontaneous interaction of ULvWF
with platelets that would lead to platelet microthrombi formation in
the microvasculature, local schemia and platelet consumption. The
applicant highlighted that this immediate platelet-protective effect
differentiates CABLIVI[supreg] from slower-acting therapies, such as PE
and immunosuppressants, which need days to exert their effect. The
applicant explained that PE acts by removing ULvWF and the circulating
auto-antibodies against ADAMTS13, thereby replenishing blood levels of
ADAMTS13, while immunosuppressants aim to stop or reduce the formation
of auto-antibodies against ADAMTS13.
    With respect to the second criterion, whether a product is assigned
to the same or a different MS-DRG, the applicant believed that
potential cases representing patients who may be eligible for treatment
involving CABLIVI[supreg] would be assigned to the same MS- DRGs as
cases representing patients who receive SOC treatment for a diagnosis
of aTTP. As explained below in the discussion of the cost criterion,
the applicant believed that potential cases representing patients who
may be eligible for treatment involving CABLIVI[supreg] would be
assigned to MS-DRGs that contain cases representing patients who were
diagnosed with aTTP and received therapeutic PE procedures during
hospitalization.
    With respect to the third criterion, whether the new use of the
technology involves the treatment of the same or similar type of
disease and the same or similar patient population, according to the
applicant, there are no other specific therapies approved for the
treatment of patients diagnosed with aTTP. As stated earlier, according
to the applicant, patients who have been diagnosed with aTTP have two
currently available SOC treatment options: PE, in which a patient's
blood plasma is removed through apheresis and is replaced with donor
plasma, and immunosuppression (for example, corticosteroids and
increasingly rituximab), which is administered as an adjunct to PE in
the treatment of aTTP. The applicant further explained that
immunosuppression consisting of glucocorticoids is often administered
as adjunct to PE in the initial treatment of a diagnosis of
aTTP,38 39 but their use is based on historical evidence
that some patients with limited symptoms might respond to
corticosteroids alone.40 41 The applicant noted that there
have been no studies specifically comparing treatment involving the
combination of PE with corticosteroids, versus PE alone; that they are
not specifically approved for the treatment of a diagnosis of aTTP, and
that other immunosuppressive agents used to treat a diagnosis of aTTP,
such as rituximab, have not been studied in properly controlled,
double-blind studies. The applicant also noted that rituximab, aside
from not being licensed for the treatment of a diagnosis of aTTP, is
not fully effective during the first 2 weeks of treatment, with a
reported delay of onset of its effect that may extend up to 27 days,
with at least 3 to 7 days needed to achieve adequate B-cell depletion
(given the B-cells may also contain ADAMTS13 antibodies), and even
longer to restore ADAMTS13 activity levels.42 43
---------------------------------------------------------------------------
    \38\ Scully, M., et al., ``Guidelines on the diagnosis and
management of thrombotic thrombocytopenic purpura and other
thrombotic microangiopathies,'' Br. J. Haematol., 2012, vol. 158(3),
pp. 323-35.
    \39\ George, J.N., ``Corticosteroids and rituximab as adjunctive
treatments for thrombotic thrombocytopenic Purpura,'' Am. J.
Hematol., 2012, vol. 87 Suppl 1, pp. S88-91.
    \40\ Bell, W.R., et al., ``Improved survival in thrombotic
thrombocytopenic purpura-hemolytic uremic Syndrome. Clinical
experience in 108 patients,'' N. Engl. J. Med., 1991, vol. 325(6),
pp. 398-403.
    \41\ Phillips, E.H., et al., ``The role of ADAMTS-13 activity
and complement mutational analysis in differentiating acute
thrombotic microangiopathies,'' J. Thromb. Haemost., 2016, vol.
14(1), pp. 175-85.
    \42\ Coppo, P., ``Management of thrombotic thrombocytopenic
purpura,'' Transfus Clin Biol., Sep 2017, vol. 24(3), pp. 148-153.
    \43\ Froissart, A., et al., ``Rituximab in autoimmune thrombotic
thrombocytopenic purpura: A success story,'' Eur. J. Intern. Med.,
2015, vol. 26(9), pp. 659-65.
---------------------------------------------------------------------------
    Based on the applicant's statements as summarized above, the
applicant believes that CABLIVI[supreg] provides a new treatment option
for patients who have been diagnosed with aTTP. However, it is not
clear that CABLIVI[supreg] would involve the treatment of a different
type of disease or a different patient population. As stated earlier,
according to the applicant, patients who have been diagnosed with aTTP
have two SOC treatment options for a diagnosis of aTTP: PE, in which a
patient's blood plasma is removed through apheresis and is replaced
with donor plasma, and immunosuppression (for example, corticosteroids
and increasingly also rituximab), which is administered as an adjunct
to PE in the initial treatment for a diagnosis of aTTP. Therefore, it
appears that CABLIVI[supreg] is used to treat the same or similar type
of disease (a diagnosis of aTTP) and a similar patient population as
currently available treatment options.
    We are inviting public comments on whether CABLIVI[supreg] is
substantially similar to other technologies and whether CABLIVI[supreg]
meets the newness criterion.
[[Page 19292]]
    With regard to the cost criterion, the applicant conducted the
following analysis to demonstrate that the technology meets the cost
criterion. In order to identify the range of MS-DRGs that cases
representing potential patients who may be eligible for treatment using
CABLIVI[supreg] may map to, the applicant identified all MS-DRGs for
patients who had been hospitalized for a diagnosis of aTTP.
Specifically, the applicant searched the FY 2017 MedPAR file for
Medicare fee-for-service inpatient hospital claims submitted between
October 1, 2016 and September 30, 2017, and identified potential cases
by ICD-10-CM diagnosis code M31.1 (Thrombotic microangiopathy) and ICD-
10-PCS procedure codes 6A550Z3 (Pheresis of plasma, single) and 6A551Z3
(Pheresis of plasma, multiple). The applicant noted that it excluded
cases with an ICD-10-CM diagnosis code of D59.3 (Hemolytic-uremic
syndrome).
    This resulted in 360 cases spanning 61 MS-DRGs, with approximately
67.2 percent of all potential cases mapping to the following 5 MS-DRGs:
------------------------------------------------------------------------
               MS-DRG                            MS-DRG title
------------------------------------------------------------------------
MS-DRG 545..........................  Connective Tissue Disorders with
                                       MCC.
MS-DRG 546..........................  Connective Tissue Disorders
                                       without CC.
MS-DRG 547..........................  Connective Tissue Disorders
                                       without CC/MCC.
MS-DRG 682..........................  Renal Failure with MCC.
MS-DRG 698..........................  Other Kidney and Urinary Tract
                                       Diagnoses with MCC.
------------------------------------------------------------------------
    Using the 242 identified cases that mapped to the top 5 MS-DRGs
above, the average case-weighted unstandardized charge per case was
$188,765. The applicant then standardized the charges and then removed
historic charges for items that are expected to be avoided for patients
who receive treatment involving CABLIVI[supreg]. The applicant
determined that 31 percent of historical routine bed charges, 65
percent of historical ICU charges, and 38 percent of historical blood
administration charges (which includes charges for therapeutic PE)
would be reduced because of the use of CABLIVI[supreg], based on the
findings from the Phase III clinical study HERCULES. The applicant
indicated it used the FY 2017 MedPAR file to determine the appropriate
amount of charges to remove. The applicant then inflated the adjusted
standardized charges by 8.864 percent utilizing the 2-year inflation
factor published by CMS in the FY 2019 IPPS/LTCH PPS final rule to
adjust the outlier threshold (83 FR 41722). (We note that this figure
was revised in the FY 2019 IPPS/LTCH PPS final rule correction notice.
The corrected final 2-year inflation factor is 1.08986 (83 FR 49844).
We further note that even when using the corrected final rule values to
inflate the charges, the average case-weighted standardized charge per
case exceeded the average case-weighted threshold amount.) The
applicant explained that the anticipated price for CABLIVI[supreg]'s
indication for the treatment of patients who have been diagnosed with
aTTP, in combination with plasma exchange and immunosuppressive
therapy, has yet to be determined and, therefore, no charges for
CABLIVI[supreg] were added in the analysis. Based on the FY 2019 IPPS/
LTCH PPS final rule correction notice data file thresholds for FY 2020,
the applicant determined the average case-weighted threshold amount was
$49,904. The final inflated average case-weighted standardized charge
per case was $145,543. Because the final inflated average case-weighted
standardized charge per case exceeds the average case-weighted
threshold amount, the applicant maintained that the technology meets
the cost criterion. We are inviting public comments on whether
CABLIVI[supreg] meets the cost criterion.
    With respect to the substantial clinical improvement criterion, the
applicant asserted that it believes that CABLIVI[supreg] represents a
substantial clinical improvement compared to the use of currently
available treatments (PE and immunosuppressants) because it: (1)
Significantly reduces time to platelet count response, which is
consistent with the halting of platelet consumption in microthrombi;
(2) significantly reduces the number of patients with aTTP-related
death, recurrence of aTTP-related episodes, or a major thromboembolic
event; (3) reduces mortality; (4) reduces the proportion of patients
with recurrence of aTTP diagnoses; (5) reduces the proportion of
patients who develop refractory disease; (6) reduces the number of days
of PE; (7) reduces the mean length of intensive care unit stay and the
mean length of hospitalization; and (8) shows a trend of more rapid
normalization of organ damage markers. The applicant provided further
detail regarding these assertions, referencing the results of Phase II
and Phase III studies and an integrated efficacy analysis of both
studies.
    The applicant reported that the Phase II study was a randomized,
single-blind, placebo controlled study entitled ALX-0681-2.1/10 (TITAN)
that examined the efficacy and safety of the use of CABLIVI[supreg]
compared to a placebo, with the primary endpoint being achievement of a
statistically significant reduction in time to platelet count response.
Seventy-five patients, 66 of which were white, (19 to 72 years old,
with a mean of 41.6 years old; 44 women and 31 men) with an episode of
aTTP were randomized 1:1 to receive either CABLIVI[supreg] (n=36) or
placebo (n=39), in addition to daily PE.\44\ Patients received their
first dose of CABLIVI[supreg] administered through intravenous
injection prior to the first PE, followed by daily doses administered
subcutaneously after each PE. After discontinuing PE, daily doses of
CABLIVI[supreg] administered through subcutaneous injection were
continued for 30 days. The median treatment duration with
CABLIVI[supreg] was 36 days.
---------------------------------------------------------------------------
    \44\ Peyvandi, F., Scully, M., Kremer Hovinga, J.A., Cataland,
S., Kn[ouml]bl, P., Wu, H., Artoni, A., Westwood, J.P., Mansouri
Taleghani, M., Jilma, B., Callewaert, F., Ulrichts, H., Duby, C.,
Tersago, D., TITAN Investigators, ``Caplacizumab for Acquired
Thrombotic Thrombocytopenic Purpura,'' N Engl J Med., February 11,
2016, vol. 374(6), pp. 511-22. PMID: 26863353.
---------------------------------------------------------------------------
    According to the applicant, significantly more patients in the
treatment arm met the primary endpoint [95 percent Confidence Interval
(CI) (3.78, 1.28)]. The applicant indicated that the time to platelet
count response improvement constitutes a significant substantial
clinical improvement because it demonstrated that patients treated with
CABLIVI[supreg] were 2.2 times more likely to achieve an acceptable
time to platelet count response than patients receiving treatment with
the placebo. Additionally, the applicant noted that exacerbation of
aTTP occurred in fewer patients who were treated with CABLIVI[supreg]
(8.3 percent) than placebo (28.2 percent). During the 1-month follow-up
period, 8 relapses (defined as a recurrence more than 30 days after
discontinuing PE) occurred in the CABLIVI[supreg] group with 7 of the
relapses occurring within 10 days of
[[Page 19293]]
discontinuing the study drug. In all seven of the relapses, ADAMTS13
activity was still severely suppressed at the end of the treatment
period, evidence of ongoing underlying immunological disease and
indicating an imminent risk of another relapse. The applicant explained
that according to post-hoc analyses, the group of patients who were
treated with CABLIVI[supreg] compared to placebo showed a decrease in
the percentage of patients with refractory disease (0 percent versus
10.8 percent), a reduction in the number of days of PE (7.7 days versus
11.7 days) and a trend to more rapid normalization of organ damage
markers (lactate dehydrogenase, cardiac troponin I and serum
creatinine). Finally, the applicant noted that there were no deaths in
the group of patients who were treated with CABLIVI[supreg]. However, 2
of the 39 placebo-treated patients (5.1 percent) died.
    The applicant explained that the Phase III study was a randomized,
double-blind, placebo controlled study entitled ALX0681-C301 (HERCULES)
that examined the efficacy and safety of the use of CABLIVI[supreg]
compared to a placebo, with the primary endpoint being achievement of a
statistically significant reduction in time to platelet count response.
One hundred forty-five patients (18 to 79 years old, with a mean of 46
years old, 100 women and 45 men), with an episode of aTTP were
randomized 1:1 to receive either CABLIVI[supreg] (n=72) or placebo
(n=73) in addition to daily PE and immunosuppression.\45\ The applicant
explained that patients received a single 10 mg CABLIVI[supreg]
intravenous injection or placebo prior to the first PE, followed by a
daily CABLIVI[supreg] 10 mg subcutaneous injection or placebo after
completion of PE, for the duration of the daily PE treatment period and
for 30 days thereafter. According to the applicant, if at the end of
this treatment period (daily PE treatment period and 30 days after)
there was evidence of persistent underlying immunological disease
activity (indicative of an imminent risk for recurrence), treatment
could be extended weekly for a maximum of 4 weeks, together with
optimization of immunosuppression. The applicant indicated that
patients who experienced a recurrence while undergoing study drug
treatment were switched to open-label CABLIVI[supreg] and they were
again treated for the duration of daily PE treatment and for 30 days
thereafter. If at the end of this treatment period (daily PE treatment
period and 30 days after) there was evidence of ongoing underlying
immunological disease, open-label treatment with CABLIVI[supreg] could
be extended weekly for a maximum of 4 weeks, together with optimization
of immunosuppression. Patients were followed for 28 days after
discontinuation of treatment. Upon recurrence during the follow-up
period (that is, after all study drug treatment had been discontinued),
there was no re-initiation of the study drug because recurrence at this
point was treated according to the SOC. The median treatment duration
with CABLIVI[supreg] in the double-blind period was 35 days.
---------------------------------------------------------------------------
    \45\ Scully, M., et al., ``Treatment of Acquired Thrombotic
Thrombocytopenic Purpura with Caplacizumab,'' N. Engl. J. Med., (In
Press).
---------------------------------------------------------------------------
    According to the applicant, patients in the treatment arm were more
likely to achieve platelet count response at any given time point,
compared to the placebo [95 percent CI (1.1, 2.2)]. The applicant
believed that this constitutes a significant substantial clinical
improvement because patients who were treated with CABLIVI[supreg] were
1.55 times more likely to achieve platelet count response at any given
time point, compared to placebo. The applicant also indicated that,
compared to placebo, treatment with CABLIVI[supreg] resulted in a 74
percent reduction in the number of patients with aTTP-related death,
recurrence of aTTP diagnosis, or a major thromboembolic event, during
the study drug treatment period (p60 61 62 (3)
gastric signet ring adenocarcinoma; (4) pancreatic cancer; and (5)
other abdominal malignancies. There were 13 patients associated with
these 4 case series.
---------------------------------------------------------------------------
    \59\ Seneviratne, D., McLaughlin, C., Todor, D., Kaplan, B.,
Fields, E., ``The CivaSheet: The new frontier of intraoperative
radiation therapy or a pricier alternative to LDR brachytherapy?,''
Advances in Radiation Oncology, 2018, vol. 3, pp. 87-91.
    \60\ Zhen, H., Turian, J.V., Sen, N., et al.,''Initial clinical
experience using a novel Pd-103 surface applicator for the treatment
of retroperitoneal and abdominal wall malignancies,'' Advances in
Radiation Oncology, 2018, vol. 3, pp. 216-220.
    \61\ Howell, K.J., Meyer, J.E., Rivard, M.J., et al., ``Initial
Clinical Experience with Directional LDR Brachytherapy for
Retroperitoneal Sarcoma,'' submitted Int J of Rad Onc Biol Phys,
2018.
    \62\ Turian, J.V., ``Emerging Technologies for IORT:
Unidirectional Planar Brachytherapy Sources,'' Presented at AAPM
2017 Annual Meeting.
---------------------------------------------------------------------------
    Seneviratne, et al.'s case series report documented experience with
the use of the CivaSheet[supreg] device in a 78 year old male patient
who had been diagnosed with axillary squamous cell carcinoma. According
to the case series report, prior to surgery a dose of 58 Gy, prescribed
to the 95 percent isodose line (5 percent), was delivered
in 2 Gy fractions with 3-dimensional conformal EBRT with concurrent
weekly administration of cisplatin 40 mg/m2 at an outside facility.
Magnetic resonance imaging scans obtained 3 months post-treatment
revealed that the mass had decreased in size to 3.8 cm x 2.5 cm x 3.9
cm, but maintained encasement of the axillary artery, axillary vein,
and several inferior branches of the brachial plexus. Concerns with
regard to increased toxicity to the axillary structures discouraged
further EBRT, and the CivaSheet[supreg] device was implanted
immediately post tumor resection. Given that microscopic disease within
formerly irradiated tissue was being treated, a prescription dose of 20
Gy at 5 mm from the surface of the mesh was considered adequate because
of its delivery of a biologically effective dose (BED)-10 of 39.8 Gy
and equivalent dose (EQD)-2 of 33.2 Gy to the tumor bed, while limiting
the D2cc for the brachial plexus to a BED3 of 27.9 Gy and EQD2 of 16.7
Gy, based on post implant analysis. According to the Seneviratne, et
al. analysis, this approach allowed for a significantly limited dose to
be delivered to the brachial plexus. A composite dose constraint of
D2cc of 75 Gy was selected on the basis of recent data showing elevated
clinical brachial plexopathy rates beyond this threshold. This
constraint was met with an estimated composite EQD2 of 74.7 Gy, which,
according to the applicant, would not have been obtainable with EBRT to
a tumor bed EQD2 of greater than or equal to 30 Gy. The patient was
discharged on the same day with instructions on wound care and
radiation safety. According to the applicant, the incision healed well,
with no signs of infection, seroma, or lymphadenopathy during monthly
follow-up visits. At the 8-month follow-up visit, the patient was
documented to only have minor shoulder pain. Seneviratne, et al., also
discussed their views on the advantages of the use of
[[Page 19298]]
the CivaSheet[supreg] device, which include its bio-absorbability, ease
of visualization with imaging, potential for intra-operative
customization, ability to complement various treatment approaches
including EBRT and surgical resection, and ease of implantation with
minimal training.
    To further substantiate its assertions of a reduced rate of device-
related complications regarding the CivaSheet[supreg] device, the
applicant stated that its malleability is likely to be particularly
useful in treating irregularly shaped surgical cavities, such as those
created after breast lumpectomies or pelvic side wall resections.
According to the applicant, the CivaSheet[supreg] device also overcomes
several shortcomings observed even among those LDR mesh devices that
use the same isotope. According to the applicant, as the vicryl sutures
of traditional LDR mesh devices bend and curve around irregular
surfaces during placement, the spacing and orientation of the
radioactive seeds may be altered, leading to unpredictable variations
in isodose geometry. The applicant stated that, in contrast, the
polymer encapsulation of the Pd-103 Civa seeds before embedding within
the membrane allows the sources to maintain their orientation in space
and deliver radiation in accordance with the predetermined geometry.
According to the applicant, additionally, unlike older LDR mesh devices
that run the risk of source dispersion after mesh degradation, the
polymer encapsulation allows the seeds to maintain their placement even
as the membrane is absorbed over time. In this same case study,
Seneviratne, et al., stated that a 3-month post implantation imaging of
the CivaSheet[supreg] device demonstrated that the radioactive source
geometry had remained stable since the initial implantation.
    The applicant also provided Howell, et al.'s case series results of
six patients diagnosed with recurrent retroperitoneal sarcoma who had
been treated with the use of the CivaSheet[supreg] device to support
its claims of reduced rate of toxicity and improved local control.
Similar to the Seneviratne, et al. case series report, Howell, et al.'s
case series' report also noted concerns regarding prior EBRT, costs
associated with intra-operative radiation therapy both for the patient
and the hospital, and concerns of at-risk surrounding anatomic
structures. Given these concerns, Howell, et al.'s case series report
also investigated LDR brachytherapy using CivaSheet[supreg]. Amongst
the six patients observed, five patients had diagnoses of recurrent
disease in the retroperitoneum or pelvic side wall; one patient had a
diagnosis of locally-advanced leiomyosarcoma with no previous
treatment. Regarding prior treatment, two patients had prior EBRT at
first diagnosis. Four patients received neoadjuvant EBRT prior to
surgery in addition to treatment involving CivaSheet[supreg]
brachytherapy. The LDR brachytherapy dose was determined using
radiobiological calculations of biological effective dose (BED) based
on the linear-quadratic model and EQD2 values. An LDR brachytherapy
dose of 20 to 60 Gy (36 Gy mean) was administered, corresponding to BED
values of 15 to 53 Gy (29 Gy mean) and EQD2 values of 12 to 43 Gy (23
Gy mean). Because the goal was to provide a conformal radiation boost
for an additional 15 to 20 Gy EQD2, the prescribed absorbed doses were
considered appropriate. All patients were followed by CT scan to assess
implant migration, observed radiation-related toxicities, and evidence
for local recurrence between 2.5 weeks and 3 months. No evidence of
implant migration or radiation-related toxicities was found. Based on
these results, the study concluded that LDR directional brachytherapy
delivered a targeted dose distribution that was successfully used to
treat retroperitoneal sarcoma, and that the utilized device is an
important option for the treatment of patients who have been diagnosed
with retroperitoneal sarcoma having close/positive surgical margins
and/or in combination with EBRT to optimize local control.
    Two other case series, by Zhen, H. et al.,\63\ and Turian, et
al.,\64\ were submitted by the applicant to support the assertion of
reduced rate of device-related complications. Both case series assessed
the use of LDR brachytherapy using the CivaSheet[supreg] device in the
tumor bed given the same clinical challenges outlined in case series
observed and investigated in the Seneviratne, et al., and Howell, et
al. analyses in patients previously treated with chemoradiation
protocols and in patients who had been diagnosed with recurrent tumors
close to important functional tissues. Both case series assessed LDR
brachytherapy using the CivaSheet[supreg] device in the treatment of
different cancers like retroperitoneal sarcomas, pancreatic cancers,
and gastric singnet ring adenocarcinoma or other abdominal carcinomas.
Both case series followed the patients with CT imaging sometime between
2.5 weeks and 86 weeks. Both case series' study concluded that LDR
brachytherapy with the use of the CivaSheet[supreg] device was a
feasible alternative treatment modality for the cancers treated in each
case series. According to Zhen, et al., an advantage of using the
CivaSheet[supreg] device is that the CivaDot sheets can be easily cut
to any size and shape at the time of implant. The author further stated
that the CivaDot sheet is malleable and can conform to curved surfaces.
This device characteristic, according to the author, gives the
physician more flexibility to treat tumor beds with irregular shapes
and surface curvatures compared with electron beam cylindrical
applicators, thereby reducing the rate of device-related complications.
However, the analysis by Zhen, et al. also indicated that a limitation
in dosimetric evaluation using CT imaging is related to the inability
to identify the orientation of the individual CivaDot mainly because of
limited resolution and metal artifact caused by the gold plating.
CivaDot orientation is inferred from the fact that all dots are
embedded in a membrane that is sutured to the tumor bed and because the
post-implant CT scan shows the shape of the CivaSheet[supreg] seeds
being maintained. Also, Zhen, et al. noted that surgical clips could be
mistakenly identified as CivaDots. The analysis by Zhen, et al.
recommended that the use of surgical clips should be minimized.
---------------------------------------------------------------------------
    \63\ Zhen, H., Turian, J.V., Sen, N., et al.,''Initial clinical
experience using a novel Pd-103 surface applicator for the treatment
of retroperitoneal and abdominal wall malignancies'', Advances in
Radiation Oncology, 2018, vol. 3, pp. 216-220.
    \64\ Turian, J.V., ``Emerging Technologies for IORT:
Unidirectional Planar Brachytherapy Sources,'' Presented at AAPM
2017 Annual Meeting.
---------------------------------------------------------------------------
    With regard to the reduced rate of toxicity, the applicant provided
a clinical case series by Howell, et al.\65\ to show that shielding
healthy tissues while irradiating the tumor bed after surgical
resection was achieved by providing a conformal radiotherapy, a novel
Pd-103 low-dose rate (LDR) brachytherapy device. Methods and materials
of the case include the following: The LDR brachytherapy device was
considered for patients who had been diagnosed with recurrent
retroperitoneal sarcoma, had received prior radiotherapy to the area,
and/or had anatomy concerning for high-risk margins predicted for
recurrence after resection. The case series included the clinical
conclusions for five patients who had been diagnosed with recurrent
disease in the retroperitoneum or pelvic side wall, one patient who had
been diagnosed with locally-advanced leiomyosarcoma with no previous
treatment, two patients who had prior
[[Page 19299]]
EBRT at first diagnosis, and four patients who received neoadjuvant
EBRT prior to surgery in combination with brachytherapy. The LDR
brachytherapy dose was determined using radiobiological calculations of
biological effective dose (BED) based on the linear-quadratic model and
EQD2 values. An LDR brachytherapy dose of 20 to 60 Gy (36 Gy mean) was
administered, corresponding to BED values of 15 to 53 Gy (29 Gy mean)
and EQD2 values of 12 to 43 Gy (23 Gy mean). Because the goal was to
provide a conformal radiation boost for an additional 15 to 20 Gy EQD2,
the prescribed absorbed doses were considered appropriate. According to
the applicant, results showed that radiation was delivered to the at-
risk tissues with minimal irradiation of adjacent healthy structures or
structures occupying the surgical cavity after tumor resection.
According to the applicant, clinical outcomes indicated feasibility for
surgical implantation and promising results in comparison to current
standards-of-care. The device did not migrate over the course of
follow-up and there were no observed radiation-related toxicities.
---------------------------------------------------------------------------
    \65\ Howell, K.J., Meyer, J.E.,Rivard, M.J. et al., ``Initial
Clinical Experiences with Directional LDR Brachytherapy for
Retroperitoneal Sarcomo, submitted to Int J of Rad Onc Biol Phys,
2018.
---------------------------------------------------------------------------
    The Howell, et al. clinical case series concluded that LDR
directional brachytherapy delivered a targeted dose distribution that
was successfully used to treat retroperitoneal sarcoma and that the
utilized device is an important option for the treatment of patients
who have been diagnosed with retroperitoneal sarcoma having close/
positive surgical margins and/or in combination with EBRT to optimize
local control.
    The applicant also cited three additional case series to support
their assertions of reduced rate of device-related complications and
reduced rate of radiation toxicity. The first is on file at CivaTech in
which they indicated that more than 60 patients, since 2015, had
CivaSheet[supreg] implanted with no reported device-related toxicity in
patients previously treated with maximal EBRT. No other details were
provided by the applicant. The second case series by Taunk, et al.\66\
assessed the use of CivaSheet[supreg] in three patients who had been
diagnosed with colorectal adenocarcinoma who had undergone prior
induction chemotherapy and neoadjuvant chemoradiation.
CivaSheet[supreg] was placed in the tumor bed and patients were
followed with CT imaging to assess implant migration, 30- and 90-day
radiation toxicity and local recurrence. One patient was deemed not a
feasible candidate because the CivaSheet[supreg] could not be uniformly
opposed to the sacrum due to the degree of concavity. The other two
patients underwent successful CivaSheet[supreg] implantation, and at 30
days showed stability of the device and no apparent toxicity. In the
final additional case series from Rivard, et al.,\67\ a single patient
who had been diagnosed with pelvic side wall cancer (type not
indicated) was implanted with CivaSheet[supreg] and the
CivaSheet[supreg] dose distributions were compared to those of
conventional low-dose rate, low-energy photon-emitting brachytherapy
seeds (that is, palladium 103, Iodine-125, and Cesium-131). According
to the applicant, results suggest gold-shielding CivaDots attenuate
radiation for directional brachytherapy and CivaSheet[supreg] provides
a therapeutic target dose, while substantially minimizing critical
structure doses. In this specific case study, the applicant stated that
the use of CivaSheet[supreg] showed decreased radiation to adjacent
organs, such as the bowel and the bladder.
---------------------------------------------------------------------------
    \66\ Taunk, N.K., Cohen, G., Taggar, A.S., et al., ``Preliminary
Clinical Experience from a Phase I Feasibility Study of a Novel
Permanent Unidirectional Intraoperative Brachytherapy Device,'' ABS
2017 Annual Meeting.
    \67\ Rivard, M.J., ``Low-energy brachytherapy sources for pelvic
sidewall treatment,'' Presented at ABS 2016 Annual Meeting.
---------------------------------------------------------------------------
    With regard to decreasing the number of future hospital visits, the
applicant provided a poster presentation presented at the American
Brachytherapy Society 2017 Annual Meeting. The purpose of this study
was to investigate the feasibility of using intra-operative directional
brachytherapy for the treatment of squamous cell carcinoma of the
oropharynx. The study included a single patient who had received a
prior course of external beam radiation therapy of 70 Gy in 2015. Due
to positive margins near the carotid after the resection, and the
increased risk of additional external radiation, brachytherapy was
considered as a treatment option. CivaSheet[supreg] was used for the
implant. The Pd-103 sources were spaced 8 mm apart on a rectangular
grid. Unidirectional dose was achieved by a 0.05 mm thick gold disk-
shaped foil on the reverse side of each source. A dose of 120 Gy at 5
mm depth was prescribed. After the resection, the entire polymer sheet
was placed on the treatment area to determine the needed dimensions.
The CivaSheet[supreg] device was then removed and cut to size with
scissors leaving 26 Pd-103 sources remaining. The surgeon used 3.0
vicryl sutures for attachment in a concave shape over the carotid
artery, where there was a positive margin. The gold foil was positioned
to protect the neck flap and closure. The surgical team completed the
procedure and the patient recovered without any complications.
    Results of the study showed that the sources remained in position
in a concave array pattern. Due to the dose fall-off of Pd-103, the
calculated dose to critical structures was minimized. Because the
surgical implant of the CivaDot sheet proceeded as expected with no
complications and the post-implant plan indicated that the
CivaSheet[supreg] remained in position with the radioactive side
contacting the treatment area, the applicant asserts that future
hospital visits will be decreased because the patient will not return
for EBRT.
    With regard to decreases in the rate of subsequent therapeutic
interventions, the applicant stated that the standard-of-care for most
patients undergoing surgery is typically preceded or followed by a form
of external beam radiation therapy. A typical course of intensity
modulated radiation therapy (IMRT) is 25 to 30 fractions (separate
treatments) delivered over the course of 3 to 6 weeks. The applicant
stated that, for some patients, CivaSheet[supreg] will be the only form
of radiation therapy they will receive. CivaSheet[supreg] is implanted
in one procedure and radiation is locally delivered over the course of
several weeks, while the sources provide a continuous dose and later
decay. The device is not removed and no additional follow-up visits are
required for the patient to receive therapeutic intervention. According
to the applicant, use of CivaSheet[supreg] can avoid the time and
expense of dozens of radiation therapy visits over the course of
several weeks as compared to EBRT. The applicant further stated that
the published clinical data provided with its application \68\ shows
that the use of CivaSheet[supreg] is an effective and safe
combinational treatment to external beam radiation therapy. According
to the applicant, radiation oncologists can use CivaSheet[supreg] to
increase the dose of radiation that can be delivered to a tumor margin,
without increasing toxicity and that this may reduce the odds that a
patient experiences cancer recurrence.69 70 71 The applicant
also
[[Page 19300]]
asserted that the targeted radiation approach has demonstrated no toxic
effects for patients. The applicant further stated that other forms of
radiation have a known rate of complications and toxicity that result
in the need for additional therapies and interventions (for example,
topical creams for skin reddening, and medicine for pain). The
applicant indicated that there has been no change in concomitant
medications prescribed because of the use of the CivaSheet[supreg]
implant either on or off trial. The applicant did not link these claims
to any of the studies provided with its application. In addition, the
applicant asserts that, of the case studies they provided, there have
been no instances of therapeutic interventions to resolve an issue that
was induced by the use of the CivaSheet[supreg] device to deliver
radiation.72 73 74
---------------------------------------------------------------------------
    \68\ Taunk, N.K., Cohen, G., Taggar, A.S., et al., ``Preliminary
Clinical Experience from a Phase I Feasibility Study of a Novel
Permanent Unidirectional Intraoperative Brachytherapy Device,'' ABS
2017 Annual Meeting.
    \69\ Rivard, Mark J., ``Low energy brachytherapy sources for
pelvic sidewall treatment,'' abstract presented at the ABS 2016
Annual Meeting.
    \70\ Yoo, S.S., Todor, D.A., Myers, J.M., Kaplan, B.J., Fields,
E.C., ``Widening the therapeutic window using an implantable, uni-
directional LDR brachytherapy sheet as a boost in pancreatic
cancer,'' ASTRO 2018 Annual Meeting San Antonio, TX.
    \71\ Howell, K.J., Meyer, J.E., Rivard, M.J., et al., ``Initial
Clinical Experience with Directional LDR Brachytherapy for
Retroperitoneal Sarcoma,'' submitted Int J of Rad Onc Biol Phys,
2018.
    \72\ Ibid.
    \73\ Rivard, Mark J., ``Low energy brachytherapy sources for
pelvic sidewall treatment,'' abstract presented at the ABS 2016
Annual Meeting.
    \74\ Yoo, S.S., Todor, D.A., Myers, J.M., Kaplan, B.J., Fields,
E.C., ``Widening the therapeutic window using an implantable, uni-
directional LDR brachytherapy sheet as a boost in pancreatic
cancer,'' ASTRO 2018 Annual Meeting San Antonio, TX.
---------------------------------------------------------------------------
    With regard to improvement in back pain and appetite (compared to
baseline) in pancreatic cancer patients, the applicant asserted that
patients answered standardized, international questionnaire EORTC QLQ-
C30 and PANC26 and that these results are on file at CivaTech. The
applicant provided the baseline, 70 days post-operative and 98 days
postoperative patient responses to ``Have you ever had back pain?''
Baseline response: 1.5; 70 days post-operative response: 1.0 and 98
days post-operative response: 1.0. The applicant also provided
baseline, 70 days post-operative and 98 days post-operative patient
responses to ``Were you restricted in the amounts of food you could eat
as a result of your disease or treatment?'' Baseline response: 2.5; 70
days postoperative response: 1.0 and 98 days postoperative response:
1.0. (Response Values: 1.0 = ``Not at all''; 2.0 = ``A little''; 3.0 =
``Quite a bit''; 4.0 = ``Very much'').
    With regard to improved local control for pancreatic cancer
patients, the applicant provided the results of a dosimetric study
entitled, ``Widening the Therapeutic Window Using an Implantable, Uni-
directional LDR Brachytherapy Sheet as a Boost in Pancreatic Cancer
Case Series,'' a poster presented at the ASTRO 2018 Annual Meeting.
According to background information in the applicant's poster,
pancreatic patients often undergo neoadjuvant chemotherapy and
chemoradiation in preparation for surgical resection of the tumor. In
addition, oftentimes after neoadjuvant therapy there are inflammatory
changes that, unfortunately, hinder pre-operative imaging and create
the potential for unreliable determination of tumor resection.
Accompanying the potentially unreliable determination of tumor
resectability are patient concerns when positive retroperitoneal
margins have close proximity to major vasculature. The applicant noted
that additional EBRT boost, initiated post operatively, is an option,
but difficult given bowel constraints and the difficulty in identifying
the area at highest risk. Given these constraints associated with
treating pancreatic cancers, the purpose of this study was to
demonstrate the ability of the LDR brachytherapy CivaSheet[supreg]
device to deliver a focal high-dose boost, targeted to the area at
highest risk in patients who received neoadjuvant chemoradiation. This
dosimetric case series consisted of four patients who had been
diagnosed with borderline resectable pancreatic cancer who received
neoadjuvant FOLFIRINOX followed by gemcitabine-based
chemoradiotherapy (chemoRT) to 50.4 Gy in 28 fractions with dose
prescribed to the gross tumor plus a 1 cm margin. According to the
poster provided by the applicant, after neoadjuvant therapy, the
multidisciplinary team was concerned for close or positive margin
resection. Using the CivaSheet[supreg] device, a 38 Gy EQD2 dose to 5
mm depth was implanted in these patients and a total dose of 88.4 Gy
was delivered to the targeted tissue. Post-operatively, patients had a
CT scan to identify the tumor bed contour, as well as the contour of
surrounding at-risk organs; the small bowel (SB) was contoured as the
bowel bag and included the entire peritoneal cavity. Following the CT
scan, brachytherapy plans, as well as EBRT boost plans, were created
for each patient. A dose-volume histogram (DVH) from initial 3D
treatment plans for all patients showed the SB volume receiving 45 Gy
(V45) was a median of 78.2 cc (range 61.7-107.1 ccs) and maximum bowel
doses were a median of 53.2 Gy, range 53.1-53.6 Gy. According to the
applicant, the V45 for SB should be less than 195 cc, with a maximum of
less than or equal to 58 Gy to prevent SB obstruction, fistula and
perforation. According to the applicant, with the CivaSheet[supreg]
device, the boost dose was dramatically increased while SB exposure was
marginal at about 1/10th of the prescription dose. For the target, the
CivaSheet[supreg] delivered the prescription dose to 5 mm depth with a
large inhomogeneous dose throughout the tumor bed with the minimum dose
of 38 Gy. Dosimetric comparison of a CivaSheet[supreg] tumor bed boost
and a Stereotactic Body Radiation Therapy (SBRT) tumor bed boost to the
SB was 9.6 Gy compared to 24 Gy for external beam plan. According to
the applicant, the conclusions from this case series are that applying
a brachytherapy uni-directional source to the area at highest risk can
serve to improve the therapeutic index by improving the local control
and minimizing toxicities in pancreatic cancer patients after
neoadjuvant therapy.
    With regard to whether CivaSheet[supreg] represents a substantial
clinical improvement relative to other brachytherapy technologies
currently available, we are concerned that all of the supporting data
appear to be feasibility studies substantiating the use of the
CivaSheet[supreg] in different cancers and difficult anatomic
locations. We also are concerned that there do not appear to be any
comparisons to other current treatments, nor any long-term follow-up
with comparisons to currently available therapies. We are inviting
public comments on whether CivaSheet[supreg] meets the substantial
clinical improvement criterion.
    We did not receive any written comments in response to the New
Technology Town Hall meeting notice published in the Federal Register
regarding the substantial clinical improvement criterion for the
CivaSheet[supreg] or at the New Technology Town Hall meeting.
d. CONTEPOTM (Fosfomycin for Injection)
    Nabriva Therapeutics U.S., Inc. submitted an application for new
technology add-on payments for CONTEPOTM for FY 2020.
CONTEPOTM is intended to treat complicated urinary tract
infections (cUTIs) caused by multi-drug resistant (MDR) pathogens in
hospitalized patients. CONTEPOTM has not yet received FDA
approval. The FDA has accepted the applicant's New Drug Application
(NDA) using its Priority Review expedited program.
    Complicated urinary tract infections are characterized by chills,
rigors, or fever (temperature of greater than or equal to 38.0 [deg]C);
elevated white blood cell count (greater than 10,000/mm\3\), or
[[Page 19301]]
left shift (greater than 15 percent immature PMNs); nausea or vomiting;
dysuria, increased urinary frequency, or urinary urgency; and lower
abdominal pain or pelvic pain. A related condition, acute
pyelonephritis (AP), is characterized by chills, rigors, or fever
(temperature of greater than or equal to 38.0 [deg]C); elevated white
blood cell count (greater than 10,000/mm\3\), or left shift (greater
than 15 percent immature PMNs); nausea or vomiting; dysuria, increased
urinary frequency, or urinary urgency; flank pain; and costo-vertebral
angle tenderness on physical examination. Risk factors for infection
with drug-resistant organisms do not, on their own, indicate a
cUTI.\75\ The applicant stated that CONTEPOTM would offer a
new potential first-line treatment for patients with cUTIs suspected to
be caused by MDR pathogens in the United States.
---------------------------------------------------------------------------
    \75\ Hooton, T. and Kalpana, G., 2018, ``Acute complicated
urinary tract infection (including pyelonephritis) in adults,'' In
A. Bloom (Ed.), UpToDate. Available at: https://www.uptodate.com/contents/acute-complicated-urinary-tract-infectionincluding-pyelonephritis-in-adults.
---------------------------------------------------------------------------
    The applicant stated that CONTEPOTM is an epoxide
intravenous antibiotic that eradicates bacteria by inhibiting the
bacteria's ability to form cell walls, which are critical for a cell's
survival and growth. The applicant asserted that CONTEPOTM
offers a broad spectrum of bactericidal Gram-negative and Gram-positive
activity, including activity against Extended-spectrum [beta]-lactamase
(ESBL)-producing Enterobacteriaceae, as well as other contemporary MDR
organisms.
    The applicant noted that there are currently no ICD-10-PCS
procedure codes that could be used to uniquely identify the use of
CONTEPOTM. However, the applicant stated that potential
cases representing patients who may be eligible to receive treatment
through the administration of CONTEPOTM could be identified
with ICD-10-PCS codes 3E03329 (Introduction of Other Anti-infective
into Peripheral Vein, Percutaneous Approach) or 3E04329 (Introduction
of Other Anti-infective into Central Vein, Percutaneous Approach). The
applicant has submitted a request for approval for a new ICD-10-PCS
procedure code to uniquely identify CONTEPOTM administration
in FY 2020.
    The applicant has recommended that CONTEPOTM be
administered as follows: 6 g every 8 hours by intravenous (IV) infusion
over 1 hour for up to 14 days for patients 18 years of age or older,
with an estimated creatinine clearance (CrCl) greater than or equal to
50 mL/min. Dosage adjustment is required for patients whose creatinine
clearance is 50 mL/min or less.
    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 regard to the first criterion, whether the product uses a
similar mechanism of action, the applicant stated that
CONTEPOTM's mechanism of action differentiates it from other
approved injectable antibiotics. The applicant reports that
CONTEPOTM, as an injectable epoxide and sole antibiotic
class member, inhibits an early step in peptidoglycan biosynthesis by
covalently binding to MurA, an enzyme that catalyzes the first
committed critical step in a bacteria's ability to form a cell wall
and, therefore, the cell's survival and growth. The applicant indicated
that CONTEPOTM's mechanism of action is unique in comparison
to all other injectable antibiotics by working at a different and
earlier stage of cell wall synthesis inhibition, such that the cell
wall lacks suitable integrity and the bacteria die quickly. The
applicant further stated that because of this unique mechanism of
action, CONTEPOTM lacks cross resistance with other existing
classes of intravenous antibiotics.
    With respect to the second criterion, whether the product is
assigned to the same or a different MS-DRG, the applicant asserted that
patients who may be eligible to receive treatment involving
CONTEPOTM include hospitalized patients who have been
diagnosed with a cUTI. The applicant noted that the relevant existing
ICD-10-PCS procedure codes (3E3329 and 3E04329) map to many existing
MS-DRGs. The applicant lists the most common of these MS-DRGs as MS-DRG
871 (Septicemia or Severe Sepsis without MV >96 Hours with MCC); MS-DRG
690 (Kidney and Urinary Tract Infections without MCC); MS-DRG 698
(Other Kidney and Urinary Tract Diagnoses with MCC); MS-DRG 872
(Septicemia or Severe Sepsis without MV >96 hours without MCC); MS-DRG
689 (Kidney and Urinary Tract Infections with MCC); MS-DRG 699 (Other
Kidney and Urinary Tract Diagnoses with CC); MS-DRG (683 Renal Failure
with CC); MS-DRG 682 (Renal Failure with MCC); MS-DRG 853 (Infectious
and Parasitic Diseases with O.R. Procedure with MCC); and MS-DRG 291
(Heart Failure and Shock with MCC). Cases involving the use of
CONTEPOTM would likely be assigned to the same MS-DRGs to
which cases involving treatment with comparator drugs are assigned.
    With respect to the third criterion, whether the use of the
technology involves the treatment of the same or similar type of
disease and the same or similar patient population, the applicant
asserted that the use of CONTEPOTM would treat a different
patient population than existing and currently available treatment
options. While many drugs treat the broad population of patients who
have been diagnosed with cUTIs, the applicant asserts that increasing
rates of Enterobacteriaceae resistance to fluoroquinolones and ESBLs
have limited both classes use as first-line therapies among inpatients
with infections caused by suspected or confirmed MDR pathogens. The
applicant cited a study, which estimates the prevalence of drug
resistance among uropathogens isolated from hospitalized patients in
the United States. According to the study, there is a more than a two-
fold increase in ESBL-producing E. coli (from 3.3 percent to 8
percent), ESBL-producing K. pneumoniae (from 9.1 percent to 18.6
percent), and CRE (from 0 percent to 2.3 percent) causing UTIs in the
period between 2000 and 2009.\76\ The applicant further asserts that
the use of CONTEPOTM will also treat a different diseased
patient population than the currently available therapies. According to
the applicant, CONTEPOTM's unique mechanism of action
amongst injectable antibiotics and novel class allows the use of
CONTEPOTM to reach different and expanded patient
populations, particularly those patients who have been diagnosed with a
cUTI that may have pathogens resistant or suspected resistance to ESBL
and CRE, or fluoroquinolone resistance. Further, the applicant stated
that CONTEPOTM's stewardship value to clinicians is as a
carbapenem-sparing potential therapy that may result in real world
reductions in CRE resistance, further sparing a last-line of defense
for critically ill patient populations, which due to unique resistance
profiles, the applicant asserts constitute a different population than
is currently treated.
---------------------------------------------------------------------------
    \76\ Shorr, A.F., Zilberberg, M.D., Micek, S.T., Kollef, M.H.,
``Prediction of Infection Due to Antibiotic-Resistant Bacteria by
Select Risk Factors for Health Care-Associated Pneumonia,'' Arch
Intern Med, 2008, vol. 168(20), pp. 2205-10.
---------------------------------------------------------------------------
    Based on the applicant's statements as summarized above, the
applicant believes that CONTEPOTM is not substantially
similar to any existing intravenous antibiotic treatment. However, we
are concerned with respect to the first criterion as to whether the
mechanism of action described by the
[[Page 19302]]
applicant is unique to CONTEPOTM or whether it may be
similar to other drugs that inhibit cell wall development, including
penicillins, cephalosporins, and carbapenems. With respect to the
second criterion, we believe that potential cases involving the use of
CONTEPOTM would be assigned to the same MS-DRGs as cases
involving comparator antibiotics. Finally, with respect to the third
criterion, we are concerned whether CONTEPOTM treats a
unique patient population, as the applicant asserts. While the variety
of antibiotic resistance patterns certainly warrants a varied
armamentarium for clinicians, there are many existing antimicrobials
that are approved to generally treat cUTIs and MDR pathogens. We are
concerned as to whether hospitalized patients who have been diagnosed
with cUTIs, including those with MDR pathogens, would constitute a
unique patient population, given that there are existing treatment
options for these patients. This concern as to whether the technology
may be considered to treat a new patient population seems particularly
relevant for an antibiotic due to the evolving nature of global
bacterial resistance patterns, and, specifically, the applicant's
assertion that the use of CONTEPOTM would be a new tool in
the growing battle against MDR bacteria infections. We are inviting
public comments on whether CONTEPOTM is substantially
similar to any existing technologies and whether it meets the newness
criterion, including with respect to the concerns we have raised.
    With regard to the cost criterion, the applicant used the FY 2017
MedPAR Limited Data Set (LDS) to assess the MS-DRGs to which potential
cases representing hospitalized patients who may be eligible for
treatment involving CONTEPOTM would most likely be mapped.
According to the applicant, CONTEPOTM is anticipated to be
indicated for the treatment of hospitalized patients who have been
diagnosed with cUTIs. The applicant identified 199 ICD-10-CM diagnosis
code combinations that identify hospitalized patients who have been
diagnosed with a cUTI. Searching the FY 2017 MedPAR data file for these
ICD-10-CM diagnosis codes resulted in a total of 508,821 potential
cases that span 559 unique MS-DRGs, 510 of which contained more than 10
cases. The applicant excluded MS-DRGs with minimal volume (that is, 10
cases or less) from the cohort of the analysis (a total of 201 cases
and 49 MS-DRGs), and this resulted in a total of 508,620 cases across
461 MS-DRGs.
    Using 100 percent of the potential cases (508,620), the applicant
determined an average case-weighted unstandardized charge per case of
$59,009. The applicant standardized the charges for each case and
inflated each case's charges by applying the FY 2019 IPPS/LTCH PPS
final rule outlier charge inflation factor of 1.08864 (83 FR 41722).
(We note that the 2-year inflation factor was revised in the FY 2019
IPPS/LTCH PPS final rule correction notice to 1.08986 (83 FR 49844).
However, we further note that even when using the corrected final rule
values to inflate the charges, the average case-weighted standardized
charge per case for each scenario exceeded the average case-weighted
threshold amount.) The applicant examined associated charges per MS-DRG
and removed charges for potential antibiotics that may be replaced by
the use of CONTEPOTM. Specifically, the applicant identified
5 antibiotics currently used for the treatment of patients who have
been diagnosed with a cUTI and calculated the cost of each of these
drugs for administration over a 14-day inpatient hospitalization.
Because patients who have been diagnosed with a cUTI would typically
only be treated with one of these antibiotics at a time, the applicant
estimated an average of the 14-day cost for the 5 antibiotics. The
applicant then took this cost and converted it to a charge by dividing
the costs by the national average CCR of 0.191 for drugs from the FY
2019 IPPS/LTCH PPS final rule (83 FR 41273). The applicant calculated
an average case-weighted standardized charge per case of $71,333 using
the percent distribution of MS-DRGs as case-weights. Based on this
analysis, the applicant determined that the final inflated average
case-weighted standardized charge per case for CONTEPOTM
exceeded the average case-weighted threshold amount of $52,203 by
$19,130.
    Because of the large number of cases included in this cost
analysis, the applicant conducted sensitivity analyses. In these
analyses, the applicant repeated the cost analysis above using only the
top 75 percent of cases, the top 20 MS-DRGs, and the top 10 MS-DRGs. In
these three additional sensitivity analyses, the final inflated average
case-weighted standardized charge per case for CONTEPOTM
exceeded the average case-weighted threshold amount by $14,949,
$14,230, and $13,620, respectively. We are inviting public comments on
whether CONTEPOTM meets the cost criterion.
    With regard to the substantial clinical improvement criterion, the
applicant asserted that the results from the CONTEPOTM
clinical trial clearly establish that CONTEPOTM represents a
substantial clinical improvement in the treatment of antibiotic
resistant infections as compared to currently available treatments.
Specifically, the applicant asserted that the use of
CONTEPOTM offers a treatment option for a patient population
unresponsive to, or ineligible for, currently available treatments, and
the use of CONTEPOTM significantly improves clinical
outcomes for this patient population compared to currently available
treatments. The applicants cited the ZEUS Study, a multi-center,
randomized, parallel-group, double-blind Phase II/III trial of 464
patients designed to evaluate safety, tolerability, efficacy and
pharmacokinetics of the use of CONTEPOTM in the treatment of
hospitalized adults who have been diagnosed with a cUTI or AP at 92
global sites in 16 countries. Hospitalized adults who have been
diagnosed with suspected or microbiologically confirmed cUTI/AP were
randomized 1:1 to receive treatment with either CONTEPOTM or
piperacillin-tazobactam (PIP-TAZ) for a fixed 7-day course (no oral
switch); patients who had been diagnosed with concomitant bacteremia
could receive up to 14 days. Diagnosis was based on pyuria and cUTI or
AP with at least two of the following signs and symptoms: Chills,
rigors, or warmth associated with fever, nausea or vomiting, dysuria,
lower abdominal pain or pelvic pain, or acute flank pain. Patients who
had been diagnosed with a cUTI had at least one of the following: Use
of intermittent or indwelling bladder catheterization, functional or
anatomical abnormality of urogenital tract, complete or partial
obstructive uropathy, azotemia or chronic urinary retention in men.
Baseline urine culture specimen was obtained within 48 hours prior to
randomization. Indwelling bladder catheters were required to be removed
or replaced, unless considered unsafe or contraindicated, before or
within 24 hours after randomization.
    The applicant stated that the primary endpoint of the ZEUS Study
was to demonstrate that CONTEPOTM was non-inferior to PIP-
TAZ in overall success based on clinical cure (complete resolution or
significant improvement of signs and symptoms such that no further
antimicrobial therapy is warranted) and microbiologic eradication
(baseline pathogen was reduced to 77 78 The
applicant also reported that the study had two secondary endpoints.
Secondary objectives were to compare: (1) Clinical cure rates in the
two treatment groups in the MITT, m-MITT, Clinical Evaluable (CE), and
Microbiologic Evaluable (ME) populations at TOC, and (2)
microbiological eradication rates in m-MITT and ME populations at TOC.
---------------------------------------------------------------------------
    \77\ Eckburg, et al., ``Phenotypic Antibiotic Resistance in
ZEUS: Multi-center, Randomized, Double-Blind Phase II/III Study of
ZTI-01 versus Piperacillin-Tazobactam (P-T) in the Treatment of
Patients with Complicated Urinary Tract Infections (cUTI) including
Acute Pyelonephritis (AP) Poster,'' 2017.
    \78\ Kaye, et al., ``Intravenous Fosfomycin (ZTI-01) for the
Treatment of Complicated Urinary Tract Infections (cUTI) including
Acute Pyelonephritis (AP): Results from a Multi-center, Randomized,
Double-Blind Phase II/III Study in Hospitalized Adults (ZEUS),''
2017.
---------------------------------------------------------------------------
    The applicant also included evidence from a post-hoc study wherein
all pathogens isolated from patients who had a baseline and TOC
pathogen underwent blinded, post-hoc, pulsed-field gel electrophoresis
(PFGE) molecular typing analysis. Microbiologic outcome was also
defined utilizing the PFGE results, whereby microbiologic persistence
required the same genus and species of baseline and post-baseline
pathogens, as well as PFGE-confirmed genetic identity.
    The applicant stated that the ZEUS Study met its primary objective
of showing non-inferiority of CONTEPOTM compared to PIP-TAZ
with overall success rates (that is, clinical cure and microbiological
eradication of baseline pathogen) of 64.7 percent (119/184
CONTEPOTM patients) versus 54.5 percent (97/178 PIP-TAZ
patients) in the m-MITT population at TOC (treatment difference 10.2
percent, 95 percent CI: -0.4, 20.8). We note that, based on the 95
percent confidence interval reported at the primary endpoint,
CONTEPOTM's success rates were not found to be different
from PIP-TAZ in a statistically significant manner. The applicant
reports that the identity and frequency of pathogens recovered at
baseline from patients in the ZEUS Study were similar in both the
CONTEPOTM and PIP-TAZ treatment groups. The most common
pathogens identified were Enterobacteriaceae, identified in 96.2
percent of the CONTEPOTM patients and 94.9 percent of the
PIP-TAZ patients, including E. coli, identified in 72.3 percent of the
CONTEPOTM patients and 74.7 percent of the PIP-TAZ patients;
K. pneumoniae, identified in 14.7 percent of the CONTEPOTM
patients and 14.0 percent of the PIP-TAZ patients; Enterobacter cloacae
species complex, identified in 4.9 percent of the CONTEPOTM
patients and 1.7 percent of the PIP-TAZ patients; and Proteus
mirabilis, identified in 4.9 percent of the CONTEPOTM
patients and 2.8 percent of the PIP-TAZ patients. Gram-negative aerobes
other than Enterobacteriaceae included Pseudomonas aeruginosa, which
was identified in 4.3 percent of the CONTEPOTM patients and
5.1 percent of the PIP-TAZ patients, and Acinetobacter baumannii-
calcoaceticus species complex, identified in 1.1 percent of the
CONTEPOTM patients and none of the PIP-TAZ patients. The
applicant indicated that these pathogens are representative of the
pathogens that have been recovered in other studies of patients who
have been diagnosed with a cUTI or AP.
    In terms of secondary endpoints, the applicant stated that clinical
cure rates were greater than 90 percent in both treatment groups at TOC
in the MITT, m-MITT, CE, and ME analysis groups. In addition to the
findings discussed above, with the post-hoc analysis adjusting for PFGE
results in both treatment arms, CONTEPOTM demonstrated a
10.5 percent treatment difference compared to PIP-TAZ with a
microbiological response rate of 70.7 percent versus 60.1 percent,
respectively, in the m-MITT population at TOC (95 percent CI: 0.2,
20.8). The applicant indicated that by specifying the genus and species
of the bacteria present at the start of treatment, the post-hoc PFGE
analysis shows that when measuring microbiological eradication rates
CONTEPOTM demonstrated a positive difference significant at
the 95 percent confidence level.\79\
---------------------------------------------------------------------------
    \79\ Skarinsky, et al., ``Per Pathogen Outcomes from the ZEUS
study, a Multi-center, Randomized, Double-Blind Phase II/III Study
of ZTI-01 (fosfomycin for injection) versus Piperacillin-Tazobactam
(P-T) in the Treatment of Patients with Complicated Urinary Tract
Infections (cUTI) including Acute Pyelonephritis (AP),'' 2017.
---------------------------------------------------------------------------
    With respect to safety, the applicant reports that in the ZEUS
Study a total of 42.1 percent of the CONTEPOTM patients and
32.0 percent of the PIP-TAZ patients experienced at least one
treatment-emergent adverse event, or TEAE. Most TEAEs were mild or
moderate in severity, and severe TEAEs were uncommon (2.1 percent of
the CONTEPOTM patients and 1.7 percent of the PIP-TAZ
patients). The most common TEAEs in both treatment groups were
transient, asymptomatic laboratory abnormalities and gastrointestinal
events. Treatment-emergent serious adverse events, or SAEs, were
uncommon in both treatment groups. There were no deaths in the study
and one SAE in each treatment group was deemed related to the study
drug (hypokalemia in a CONTEPOTM patient and renal
impairment in a PIP-TAZ patient), leading to study drug discontinuation
in the PIP-TAZ patient. Study drug discontinuations due to TEAEs were
infrequent and similar between treatment groups (3.0 percent of
CONTEPOTM patients and 2.6 percent of PIP-TAZ patients). The
applicant further stated that the most common laboratory abnormality
TEAEs were increases in the levels of alanine aminotransferase (8.6
percent of CONTEPOTM patients and 2.6 percent of PIP-TAZ
patients) and aspartate transaminase (7.3 percent of
CONTEPOTM patients and 2.6 percent of PIP-TAZ patients).
None of the aminotransferase elevations were symptomatic or treatment-
limiting, and none of the patients met the criteria for Hy's Law (a
method of assessing a patient's risk of fatal drug-induced liver
injury). Outside of the United States, elevated liver aminotransferases
are listed among undesirable effects in labeling for the use of IV
fosfomycin. Finally, the applicant stated that hypokalemia occurred in
71 of the 232 (30.6 percent) CONTEPOTM patients and 29 of
the 230 (12.6 percent) PIP-TAZ patients. Most decreases in potassium
levels were mild to moderate in severity. Shifts in potassium levels
from normal at baseline to hypokalemia, as determined by worst post-
baseline hypokalemia values, were more frequent in the patients in the
CONTEPOTM group than the patients in the PIP-TAZ group for
mild (17.7 percent compared to 11.3 percent), moderate (11.2 percent
compared to 0.9 percent), and severe (1.7 percent compared to 0.4
percent) categories of hypokalemia. Hypokalemia was deemed a TEAE in
6.4 percent of the patients receiving CONTEPOTM and 1.3
percent of the patients receiving PIP-TAZ, and all cases were transient
and asymptomatic. The applicant noted that post-baseline QT intervals
calculated using Fridericia's formula, or QTcF, of greater than 450 to
less than
[[Page 19304]]
or equal to 480 msec (baseline QTcF of less than or equal to 450 msec)
occurred at a higher frequency in CONTEPOTM patients (7.3
percent) compared to PIP-TAZ patients (2.5 percent). In the
CONTEPOTM arm, these results appear to be associated with
the hypokalemia associated with the salt load of the IV formulation.
Only 1 patient in the PIP-TAZ group had a baseline QTcF of less than or
equal to 500 msec and a post-baseline QTcF of greater than 500 msec.
    In addition to the assertions of clinical improvement based on its
pivotal study, the applicant stated that CONTEPO\TM\ provides a broad
spectrum of in vitro activity against a variety of clinically important
MDR Gram-negative pathogens, including ESBL-producing
Enterobacteriaceae, CRE, and Gram-positive pathogens, including
methicillin-resistant Staphylococcus aureus, or MRSA, and vancomycin-
resistant enterococci.80 81 82 83 The applicant also
believes that CONTEPO\TM\, due to its unique mechanism of action, has
demonstrated synergistic or additive activity in in vitro studies when
used in combination with other antibiotic classes in preclinical
studies.84 85 86 The applicant further stated that the use
of CONTEPO\TM\ has the potential to spare the use of carbapenems and
other last-line therapies and, thereby, has the potential to reduce the
development of resistance to existing antibiotic classes.\87\
Additionally, the applicant believes that the use of CONTEPO\TM\ has
the potential to reduce patients' hospital lengths of stay and patient
morbidity due to the ability to provide early appropriate therapy in
patients who have been diagnosed with suspected or confirmed MDR
pathogens.88 89 The applicant also stated that the submitted
literature provides cases wherein the use of CONTEPO\TM\ could provide
an important treatment option for patients who have been diagnosed with
infections caused by pathogens resistant to all other available IV
antibiotics.90 91 Finally, the applicant asserted that the
use of CONTEPO\TM\ has immunomodulating activities that potentially may
improve outcomes for serious infections,\92\ and may protect against
gentamicin induced nephrotoxicity.\93\
---------------------------------------------------------------------------
    \80\ Flamm, R., et al., ``Activity of fosfomycin when tested
against US contemporary bacterial isolates,'' Diagnostic
Microbiology and Infectious Disease, 2018.
    \81\ Mendes, R.E., et al., ``Molecular Characterization of
Clinical Trial Isolates Exhibiting Increased MIC Results during
Fosfomycin (ZTI-01) Treatment in a Phase II/III Clinical Trial for
Complicated Urinary Tract Infections (ZEUS),'' 2018.
    \82\ Rhomberg, P., et al., ``Evaluation of Fosfomycin Activity
When Combined with Selected Antimicrobial Agents and Tested against
Bacterial Isolates Using Checkerboard Methods,'' 2017.
    \83\ Falagas, M., et al., ``Antimicrobial susceptibility of
multidrug-resistant (MDR) and extensively drug-resistant (XDR)
Enterobacteriaceae isolates to fosfomycin,'' International Journal
of Antimicrobial Agents, 2010.
    \84\ Flamm, R., et al., ``Time Kill Analyses of Concerning Gram-
Negative Bacteria with Fosfomycin Alone and in Combination with
Select Antimicrobial Agents,'' 2017.
    \85\ Avery & Nicolau, ``In Vitro Synergy of Fosfomycin and
Parenteral Antimicrobials Against Carbapenem-Nonsusceptible
Pseudomonas aeruginosa,'' 2018.
    \86\ Albiero, J., et al., ``Pharmacodynamic Evaluation of the
Potential Clinical Utility of Fosfomycin and Meropenem in
Combination Therapy against KPC-2-Producing Klebsiella pneumonia,''
Antimicrobial Agents and Chemotherapy, 2016.
    \87\ Hayden, M.K. & Won, S.Y., ``Carbapenem-Sparing Therapy for
Extended-Spectrum [beta]-Lactamase-Producing E coli and Klebsiella
pneumoniae Bloodstream Infection,'' JAMA, 2018.
    \88\ Mocarski, et al., ``Economic Burden Associated with Key
Gram-negative Pathogens among Patients with Complicated Urinary
Tract Infections across US Hospitals,'' 2014.
    \89\ Lodise, et al., ``Carbapenem-resistant Enterobacteriaceae
(CRE) or Delayed Appropriate Therapy (DAT)--Does One Affect Outcomes
More Than the Other Among Patients With Serious Infections Due to
Enterobacteriaceae?,'' 2017.
    \90\ Chen, L., et al., ``Pan-Resistant New Delhi Metallo-Beta-
Lactamase-Producing Klebsiella pneumonia--Washoe County, Nevada,
2016,'' 2017.
    \91\ Rios, P., et al., ``Extensively drug-resistant (XDR)
Pseudomonas aeruginosa identified in Lima, Peru co-expressing a VIM-
2 metallo-blactamase, OXA-1 b-lactamase and GES-1 extended-spectrum
b-lactamase,'' JMM Case Reports, 2018.
    \92\ Zeitlinger, et al., ``Immunomodulatory effects of
fosfomycin in an endotoxin model in human blood.'' Journal of
Antimicrobial Chemotherapy, 2007.
    \93\ Yanagida, et al., ``Protective effect of fosfomycin on
gentamicin-induced lipid peroxidation of rat renal tissue,'' Chem
Biol Interact, 2004.
---------------------------------------------------------------------------
    We have several concerns regarding whether CONTEPO\TM\ meets the
substantial clinical improvement criterion. First, we are concerned
that we are unable to identify if any of the patients enrolled in the
ZEUS Study were from the United States. As we have noted in previous
rulemaking (83 FR 41309), given the geographic variability of
antibiotic resistance, we are unsure to what extent results from
studies utilizing an international cohort of patients generate
inferences that are applicable to the U.S. context and, in particular,
to the Medicare-eligible population.
    Second, we are unsure if PIP-TAZ is the only proper comparator for
CONTEPO\TM\, or if other treatments should have been considered as
well. There are a number of additional antimicrobials with similar
indications that are available for patients who have been diagnosed
with cUTIs. Such treatments might include meropenem-vaborbactam or
plazomicin. Prior studies include a meta-analysis of 10 studies (7
randomized) comparing the clinical efficacy of IV fosfomycin against
other antibiotics including sulbenicillin, sulbactam/cefoperazone,
cefotaxime, fosfomycin/colistin, and minocycline/cefuzonam. This meta-
analysis did not observe a difference in clinical efficacy between
fosfomycin and respective comparators (odds ratio (OR) 1.44, 95 percent
CI (0.96, 2.15)) irrespective of monotherapy (OR 1.41, 95 percent CI
(0.83, 2.39)) or combination therapy (OR 1.48, 95 percent CI (0.81,
2.71.)). The same results were obtained when studies with poor quality
were excluded (OR 1.45, 95 percent CI (0.94, 2.24)).\94\
---------------------------------------------------------------------------
    \94\ Grabien, et al., ``Intravenous fosfomycin--Back to the
Future; Systematic Review and Meta-analysis of the Clinical
Literature,'' Clinical Microbiology and Infection, 2017.
---------------------------------------------------------------------------
    Third, we have two methodological concerns regarding the
applicant's assertions based on the ZEUS Study. There does not appear
to be any statistical comparison of the patients in each arm in terms
of demographics and, therefore, it is difficult to assess whether the
two intervention arms are balanced as the applicant inferred. We
acknowledge that use of a double-blinded, randomized study design
(which was used in the ZEUS Study) should minimize bias and control for
unmeasured variables between treatment arms. However, we are concerned
about a lack of detail on the different dropout rates of patients
within each arm of the ZEUS Study, including data on causes and
treatment of patients that dropped out and any bias that might
introduce. We also are concerned that the ZEUS Study did not
demonstrate a superior clinical outcome with statistical significance
in its primary endpoint. Rather, the applicant is asserting the
technology represents a substantial clinical improvement on the basis
of meeting a secondary endpoint, the cure rates based on additional
PFGE analysis. In addition, we are concerned that the use of m-MITT,
rather than ITT, may have biased the results upwards by focusing on a
subset of the treatment group, rather than the entire random
sample.\95\
---------------------------------------------------------------------------
    \95\ Beckett, R.D., Loeser, K.C., Bowman, K.R., Towne, T.G.,
``Intention-to-treat and transparency of related practices in
randomized, controlled trials of anti-infectives,'' BMC Med Res
Methodol, 2016, vol. 16(1), pp. 106, Published August 24, 2016,
doi:10.1186/s12874-016-0215-2.
---------------------------------------------------------------------------
    Finally, we are concerned that many of the assertions the applicant
has made regarding the efficacy of CONTEPOTM on MDR gram-
negative pathogens and broader public health benefits come from in
vitro studies or may be speculative in nature. It may be helpful
[[Page 19305]]
to have further evidence, particularly prospectively collected and
tested clinical data, to support the assertions that the use of
CONTEPOTM reduces hospital lengths of stay and patient
morbidity, and enhances antibiotic stewardship.
    We are inviting public comments on whether CONTEPOTM
meets the substantial clinical improvement criterion.
    Below we summarize and respond to a written public comment received
in response to the New Technology Town Hall meeting notice published in
the Federal Register regarding the substantial clinical improvement
criterion for CONTEPOTM.
    Comment: In response to a question presented at the New Technology
Town Hall meeting, the applicant explained why the post-hoc reanalysis
of the primary endpoint (overall success, a composite of clinical cure
and microbiologic eradication) from the ZEUS Study using pulse-field
gel electrophoresis, which the applicant asserted demonstrated a
statistically significant difference between CONTEPOTM and
PIP-TAZ, is clinically important. The applicant stated that the post-
hoc analysis was able to differentiate the patients who had eradication
of the identified and treated baseline pathogen from those patients who
developed or were likely to develop another infection from a newly
acquired pathogen (different strain) following the ~2-week period
between the end of IV therapy and the test-of-cure evaluation. However,
the applicant indicated that there are many reasons why patients may
acquire another pathogen and/or develop new infections after completing
IV therapy, including indwelling urinary catheters or instrumentation
(for example, nephrostomy tubes, ureteric stents, etc.) or anatomical
abnormalities. The applicant stated that because of these confounding
factors, the PFGE reanalysis allowed for the differentiation of the
true persistence of the same pathogen that was present at baseline from
a different pathogen that might look the same, but was clearly
genetically distinct.
    Response: We appreciate the applicant's further explanation of the
PFGE analysis. We will take this information into consideration when
deciding whether to approve new technology add-on payments for
CONTEPOTM.
e. DuraGraft[supreg] Vascular Conduit Solution
    Somahlution, Inc. submitted an application for new technology add-
on payments for DuraGraft[supreg] for FY 2020. (We note that the
applicant previously submitted applications for new technology add-on
payments for DuraGraft[supreg] for FY 2018 and FY 2019, which were
withdrawn.) According to the applicant, DuraGraft[supreg] is designed
to protect the endothelium of the vein graft by mitigating ischemic
reperfusion injury (IRI), the basis of vein graft disease (VGD) and
vein graft failure (VGF), both of which are intimately linked to graft
and patient outcomes.\96\ \97\ \98\ According to the applicant,
specific VGD and VGF clinical outcomes affected by the use of
DuraGraft[supreg] include reductions in myocardial infarction (MI),
repeat revascularization and major adverse cardiovascular events
(MACE). The applicant stated that DuraGraft[supreg] is a preservation
solution, not a storage solution, used during standard graft handling,
flushing, and bathing steps.
---------------------------------------------------------------------------
    \96\ Salvadori, M., Rosso, G., and Bertoni, E., ``Update on
Ischemia-reperfusion Injury in Kidney Transplantation: Pathogenesis
and Treatment,'' World Transplant, June 24, 2015, vol. 5(2), pp. 52-
67.
    \97\ Osgood, M.J., Hocking, K.M., Voskresensky, I.V., et al.,
``Surgical vein graft preparation promotes cellular dysfunction,
oxidative stress, and intimal hyperplasia in human saphenous vein,''
J Vasc Surg, 2014, vol. 60, pp. 202-211.
    \98\ Shuhaiber, J.H., Evans, A.N., Massad, M.G., and Geha, A.S.,
``Mechanisms and Future Directions for Prevention of Vein Graft
Failure in Coronary Bypass Surgery,'' European Journal of Cardio-
Thoracic Surgery, vol. 22, Issue 3, September 1, 2002, pp. 387-396.
---------------------------------------------------------------------------
    The applicant indicated that vein graft endothelial damage is the
principal mediator of VGD following grafting in bypass surgeries.\99\
\100\ According to the applicant, the endothelium can be destroyed or
damaged intraoperatively through the acute physical stress of
harvesting, storage, and handling, and through more insidious processes
such as those associated with ischemic injury, metabolic stress and
oxidative damage. The applicant also noted that vein graft solutions
can independently damage the endothelium during the harvesting and
storage stages prior to vein grafting. The applicant also referred to
more recent information to depict that damage associated with the use
of graft storage solutions has the highest correlation with the
development of 12-month VGF following coronary artery bypass grafting
(CABG).\101\ More specifically regarding vein graft solutions, the
applicant asserted that there are two processes associated with current
vein graft solutions that lead to IRI and ultimately VGD: (1) Current
vein graft solutions cause ``solution damage;'' and (2) current vein
graft solutions do not protect against IRI, the basis for VGD.\102\
\103\ \104\ \105\ \106\ \107\ \108\ According to the applicant, current
vein graft solutions are used to flush and store vascular grafts during
the ex vivo ischemic interval of the surgical procedure. However, these
solutions do not protect the graft from ischemia reperfusion injury and
have no preservation ability. Further, the applicant asserted that some
of the solutions are incompatible with graft tissue resulting in
ischemic damage that is compounded by ``solution damage''.\109\ \110\
\111\
---------------------------------------------------------------------------
    \99\ Harskamp, R.E., Alexander, J.H., Schulte, P.J., Brophy,
C.M., Mack, M.J., Peterson, E.D., Williams, J.B., Gibson, C.M.,
Califf, R.M., Kouchoukos, N.T., Harrington, R.A., Ferguson, Jr.,
T.B., Lopes, R.D., ``Vein Graft Preservation Solutions, Patency, and
Outcomes After Coronary Artery Bypass Graft Surgery Follow-up From
PREVENT IV Randomized Clinical Trial,'' JAMA Surg., 2014, vol.
149(8), pp. 798-805.
    \100\ Testa, L., Bedogni, F., ``Treatment of Saphenous Vein
Graft Disease: Never Ending Story of the Eternal Return,'' Res
Cardiovasc Med., 2014, vol. 3(3), e21092.
    \101\ Ibid.
    \102\ Shinjo, H., et al., ``Effect of irrigation solutions for
arthroscopic surgery on intraarticular tissue: comparison in human
meniscus-derived primary cell culture between lactate Ringer's
solution and saline solution,'' Journal of Orthopaedic Research,
2002, vol. 20, pp. 1305-1310.
    \103\ Breborowicz, A. and Oreopoulos, D.G., ``Is normal saline
harmful to the peritoneum?'', Perit Dial Int., 2005 Apr; 25 Suppl
4:S67-70.
    \104\ Pusztaszeri, M.P., Seelentag, Walter, Bosman, F.T.,
``Immunohistochemical Expression of Endothelial Markers CD31, CD34,
von Willebrand Factor, and Fli-1 in Normal Human Tissues,'' Journal
of Histochemistry & Cytochemistry, 2006, vol. 54(4), pp. 385-395.
    \105\ Polubinska, A., et al., ``Normal Saline induces oxidative
stress in peritoneal mesoyhelial cells,'' Journel of Pediatric
Surgery, 2008, vol. 43, pp. 1821-1826.
    \106\ Sengupta, S., Prabhat, K., Gupta, V., Vij, H., Vij, R.,
Sharma, V., ``Artefacts Produced by Normal Saline When Used as a
Holding Solution for Biopsy Tissues in Transit,'' J. Maxillofac.
Oral Surg., (Apr-June 2014), vol. 13(2), pp. 148-151.
    \107\ Wilbring, M., Tugtekin, S.M., Zatschler, B., Ebner, A.,
Reichenspurner, H., Matschke, K., Deussen, A., ``Even short-time
storage in physiological saline solution impairs endothelial
vascular function of saphenous vein grafts,'' Eur J Cardiothorac
Surg., 2011 Oct, vol. 40(4), pp. 811-815.
    \108\ Weiss, D.R., et al., ``Extensive deendothelialization and
thrombogenicity in routinely prepared vein grafts for coronary
bypass operations: facts and remedy,'' Int J Clin Exp Med, 2009,
vol. 2, pp. 95-113.
    \109\ Weiss, D.R., et al., ``Extensive deendothelialization and
thrombogenicity in routinely prepared vein grafts for coronary
bypass operations: facts and remedy,'' Int J Clin Exp Med, 2009,
vol. 2, pp. 95-113.
    \110\ Ibid.
    \111\ Thatte, H.S., Biswas, K.S., Najjar, S.F., Birjiniuk, V.,
Crittenden, M.D., Michel, T., and Khuri, S.F., ``Multi-Photon
Microscopic valuation of Saphenous Vein Endothelium and Its
Preservation With a New Solution, GALA,'' Annals Thoracic Surgery,
2003, vol. 75, pp. 1145-52.
---------------------------------------------------------------------------
    The applicant explained that there are two mechanisms leading to
VGD: (1) Endothelial damage associated with the
[[Page 19306]]
harvesting and storage processes; and (2) VGD pathophysiological
changes that occur in damaged vein grafts following reperfusion at the
time of graft anastomosis. According to the applicant, these changes
are apparent within minutes to hours of grafting and are manifested as
endothelial dysfunction, death and/or denudation and include pro-
inflammatory, pro-thrombogenic and aberrant proliferative changes
within the graft. The applicant further characterized these changes as
initial endothelial reperfusion phase responses, which set in motion a
damage-response domino-like effect thereby perpetuating a cycle of
prolonged reperfusion phase injury with subsequent VGD.
    The applicant further noted that endothelial dysfunction and
inflammation results not only in the diminished ability of the graft to
respond appropriately to new blood flow patterns, but also may thwart
positive adaptive vein graft remodeling. According to the applicant,
this is because proper vein graft remodeling is dependent upon a
functional endothelial response to shear stress that involves the
production of remodeling factors by the endothelium including nitro
vasodilators, prostaglandins, lipoxyoxygenases, hyperpolarizing factors
and other growth factors.\112\ Therefore, damaged, missing and/or
dysfunctional endothelial cells prevent graft adaption, which makes the
graft susceptible to shear mediated endothelial damage. The applicant
explained that the collective damage results in intimal hyperplasia or
graft wall thickening that is the basis for atheroma development,
stenosis and subsequent lumen narrowing leading to the end state of
VGD, VGF.\113\ The applicant also noted that the pathologic changes
leading to VGD, occlusion and loss of vasomotor function, are well
documented.\114\ \115\ \116\ \117\ \118\ \119\ \120\ Presenting an
intact functional endothelial layer at the time of grafting is,
therefore, critical to protecting the graft and its associated
endothelium from damage that occurs post-grafting, in turn conferring
protection against graft failure.\121\ The applicant stated that given
the low success rate of VGF intervention after surgery (for example,
percutaneous coronary intervention and saphenous vein graft
intervention \122\), addressing graft endothelial protection at the
time of surgery is critical.
---------------------------------------------------------------------------
    \112\ Owens, C.D., ``Adaptive changes in autogenous vein grafts
for arterial reconstruction: Clinical Implications,'' J Vasc Surg.,
2010 March; vol. 51(3), pp. 736-746.
    \113\ Murphy, G.J. and Angelini, G.D., ``Insights into the
pathogenesis of vein graft disease: lessons from intravascular
ultrasound,'' Cardiovascular Ultrasound, 2004, 2:8.
    \114\ Verrier, E.D., Boyle, E.M., ``Endothelial cell injury in
cardiovascular surgery: an overview,'' AnnThorac Surg, 1996, vol.
64, pp. S2-S8.
    \115\ Harskamp, R.E., Lopes, R.D., Baisden, C.E., et al.,
``Saphenous vein graft failure after coronary artery bypass surgery:
pathophysiology, management, and future directions,'' Ann Surg.,
2013 May, vol. 257(5), pp. 824-33.
    \116\ Sellke, F.W., Boyle, E.M., Verrier, E.D., ``The
pathophysiology of vasomotor dysfunction,'' Ann Thorac Surg, 1996,
vol. 64, pp. S9-S15.
    \117\ Motwani, J.G., Topol, E.J., ``Aortocoronary saphenous vein
graft disease: pathogenesis, predisposition and prevention,''
Circulation, 1998, vol. 97(9), pp. 916-31.
    \118\ Mills, N.L., Everson, C.T., ``Vein graft failure,'' Curr
Opin Cardiol, 1995, vol. 10, pp. 562-8.
    \119\ Davies, M.G., Hagen, P.O., ``Pathophysiology of vein graft
failure: a review,'' Eur J Vasc Endovasc Surg, 1995, vol. 9, pp. 7-
18.
    \120\ Edmunds, L.H., ``Techniques of myocardial
revascularization. In: Edmunds LH, ed. Cardiac surgery in the
adult,'' New York: McGraw-Hill, 1997, pp. 481-534.
    \121\ Kim FY, Marhefka G, Ruggiero NJ, et al. Saphenous vein
graft disease: review of pathophysiology, prevention, and treatment.
Cardiol Rev, 2013;21(2):101-9.
    \122\ Testa, L., Bedogni, F., ``Treatment of Saphenous Vein
Graft Disease: Never Ending Story of the Eternal Return,'' Res
Cardiovasc Med., 2014, vol. 3(3), e21092.
---------------------------------------------------------------------------
    With respect to the newness criterion, DuraGraft[supreg] has not
received FDA approval as of the time of the development of this
proposed rule. The applicant indicated that it anticipates FDA approval
of its premarket application by July 1, 2019. The applicant also
indicated that ICD-10-PCS code XY0VX83 (Extracorporeal introduction of
endothelial damage inhibitor to vein graft, New Technology Group 3)
would identify procedures involving the use of the DuraGraft[supreg]
technology.
    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, therefore, not be
considered ``new'' for purposes of new technology add-on payments.
    With regard to the first criterion, whether a product uses the same
or similar mechanism of action to achieve a therapeutic outcome,
according to the applicant, there are currently no other treatment
options available with the same mechanism of action as that of
DuraGraft[supreg]. According to the applicant, the currently available
vein graft solutions, which consist of saline, buffered saline, blood,
and electrolyte solutions, are not preservation solutions but
``storage'' solutions that do not protect the graft vascular
endothelium nor mitigate IRI, the basis of VGD.\123\ \124\ \125\ \126\
The applicant stated that these solutions are used merely to keep
grafts wet from the time they are harvested until the time they are
used in CABG. According to the applicant, exposure of saphenous vein
grafts to these solutions has been shown to cause significant damage to
the graft within minutes.\127\ \128\ \129\ \130\
---------------------------------------------------------------------------
    \123\ Salvadori, M., Rosso, G., and Bertoni, E., ``Update on
Ischemia-reperfusion Injury in Kidney Transplantation: Pathogenesis
and Treatment,'' World Transplant, June 24, 2015, vol. 5(2), pp. 52-
67.
    \124\ Lee, J.C. and Christie, J.D., ``Primary Graft
Dysfunction,'' Proc Am Thorac Soc., 2009, vol. 6, pp 39-46.
    \125\ Osgood, M.J., Hocking, K.M., Voskresensky, I.V., et al.,
``Surgical vein graft preparation promotes cellular dysfunction,
oxidative stress, and intimal hyperplasia in human saphenous vein,''
J Vasc Surg, 2014, vol. 60, pp. 202-211.
    \126\ Shuhaiber, J.H., Evans, A.N., Massad, M.G., and Geha,
A.S., ``Mechanisms and Future Directions for Prevention of Vein
Graft Failure in Coronary Bypass Surgery,'' European Journal of
Cardio-Thoracic Surgery, vol. 22, Issue 3, September 1, 2002, pp.
387-396.
    \127\ Weiss, D.R., et al., ``Extensive deendothelialization and
thrombogenicity in routinely prepared vein grafts for coronary
bypass operations: facts and remedy,'' Int J Clin Exp Med, 2009,
vol. 2, pp. 95-113.
    \128\ Wilbring, M., Tugtekin, S.M., Zatschler, B., Ebner, A.,
Reichenspurner, H., Matschke, K., Deussen, A., ``Even short-time
storage in physiological saline solution impairs endothelial
vascular function of saphenous vein grafts,'' Eur J Cardiothorac
Surg., 2011 Oct, vol. 40(4), pp. 811-815.
    \129\ Tsakok, M., Montgomery-Taylor, S. and Tsakok, T.,
``Storage of saphenous vein grafts prior to coronary artery bypass
grafting: is autologous whole blood more effective than saline in
preserving graft function?'' Inter Cardiovasc Thorac Surg, 2012,
vol. 15, pp. 720-25.
    \130\ Thatte, H.S., Biswas, K.S., Najjar S.F., Birjiniuk, V.,
Crittenden, M.D., Michel, T., and Khuri, S.F., ``Multi-Photon
Microscopic valuation of Saphenous Vein Endothelium and Its
Preservation With a New Solution, GALA.'' Annals Thoracic Surgery,
2003, vol. 75, pp. 1145-52.
---------------------------------------------------------------------------
    The applicant explained that DuraGraft[supreg] is a formulated
``preservation'' solution that can be used during handling, flushing,
and bathing steps without changing standard surgical practice.
According to the applicant, the handling step includes using an
atraumatic surgical technique, avoiding over pressurization and
checking for leakage, excessive handling and distortion. The applicant
further noted that vascular segments (that become vascular grafts) are
comprised of a number of different cell types that function together in
an integrated manner post-grafting and, therefore, protection of all
cell types during graft flushing and storage is critical for
maintenance of graft viability and normal graft functioning.
    The applicant indicated that DuraGraft[supreg] separates itself
from current vein graft solutions through its unique
[[Page 19307]]
composition of ingredients, a physiologic saline solution that combines
free radical scavengers and antioxidants (glutathione, ascorbic acid)
and nitric oxide synthase substrate (L-arginine), as discussed later in
this section. According to a summary of ex vivo performance data and
studies provided by the applicant, the use of DuraGraft[supreg] has
been shown to preserve vascular graft viability, as well as graft
functional and structural integrity during ex vivo storage and
flushing.\131\ \132\ \133\ The applicant noted that these studies
evaluated graft cellular viability and structural integrity and
assessed molecular and biochemical markers of normal endothelial
functioning. Specifically, endothelial and smooth muscle cells were
assessed.
---------------------------------------------------------------------------
    \131\ Thatte, H.S., Biswas, K.S., Najjar S.F., Birjiniuk, V.,
Crittenden, M.D., Michel, T., and Khuri, S.F., ``Multi-Photon
Microscopic valuation of Saphenous Vein Endothelium and Its
Preservation With a New Solution, GALA.'' Annals Thoracic Surgery,
2003, vol. 75, pp. 1145-52.
    \132\ Hussaini, B.E., Lu, X.G., Wolfe, A., Thatte, H.S.,
``Evaluation of Endoscopic Vein extraction on Structural and
Functional Viability of Saphenous Vein Endothelium,'' J Cardothorac
Surg, 2011, vol. 6, pp. 82-89.
    \133\ Rousou, L.J., Taylor, K.B., Lu, X.G., et al., ``Saphenous
vein conduits harvested by endoscopic technique exhibit structural
and functional damage,'' Ann Thorac Surg, 2009, vol. 87, pp. 62-70.
---------------------------------------------------------------------------
    All veins used in these studies were collected from patients
undergoing cardiac bypass surgery at the Boston VA or Saint Joseph's
Hospital of Atlanta. Veins were harvested using the ``Open Saphenous
Vein Harvest'' (OSVH) technique.\134\ \135\ \136\ Segments of the
collected veins not being used for the bypass surgery were used for the
performance bench studies.
---------------------------------------------------------------------------
    \134\ Ibid.
    \135\ Hussaini, B.E., Lu, X.G., Wolfe, A., Thatte, H.S.,
``Evaluation of Endoscopic Vein extraction on Structural and
Functional Viability of Saphenous Vein Endothelium,'' J Cardothorac
Surg, 2011, vol. 6, vol. 82-89.
    \136\ Thatte, H.S., Biswas, K.S., Najjar, S.F., Birjiniuk, V.,
Crittenden, M.D., Michel, T., and Khuri, S.F., ``Multi-Photon
Microscopic valuation of Saphenous Vein Endothelium and Its
Preservation With a New Solution, GALA.'' Annals Thoracic Surgery,
2003, vol. 75, pp. 1145-52.
---------------------------------------------------------------------------
    According to the applicant, viability studies conducted in
conjunction with multi-photon microscopy demonstrated a protective
effect from the use of DuraGraft[supreg] on vascular endothelial
viability and graft structural integrity for storage times of up to 5
hours at room temperature (21 [deg]C).\137\ The applicant also stated
that, conversely, vascular segments were not able to be maintained in a
viable condition when stored for as short a time as 15 minutes in
standard-of-care solutions consistent with what has been published by
others. According to the applicant, DuraGraft[supreg] demonstrated its
ability to preserve the viability, structure and function of
endothelium in radial and internal mammary arteries, as well as
saphenous veins for extended periods.\138\
---------------------------------------------------------------------------
    \137\ Ibid.
    \138\ Ibid.
---------------------------------------------------------------------------
    According to the information submitted by the applicant, the
ingredients found in DuraGraft[supreg] play a primary role in
DuraGraft[supreg] exhibiting a different mechanism of action from other
solutions that are commonly used to treat the same disease process and
patient population. According to the study cited by the applicant, the
rapid loss of endothelial cell structural and functional integrity in
saphenous veins stored in standard storage solutions can be avoided by
incorporating a physiologic saline solution that combines free radical
scavengers and antioxidants (glutathione, ascorbic acid) and nitric
oxide synthase substrate (L-arginine) providing a favorable environment
and cellular support during ex vivo storage.\139\ The same study also
indicated that these three ingredients were chosen because of their
putative effect on endothelial cell function and that their use may act
synergistically to enhance the cell preservation properties of the
solution. The authors of the study asserted that glutathione increases
L-arginine transport in endothelial cells and may lead to the formation
of biologically active S-nitrosoglutathione and to the stimulation of
endothelial nitric oxide synthase (eNOS) activity, nitric oxide
generation, and coronary vasodilatation. According to the authors,
ascorbic acid also increases eNOS activity by preserving endothelium-
derived nitric oxide bioactivity by possibly scavenging superoxide
anions and preventing oxidative destruction of tetrahydrobiopterin, an
eNOS cofactor. Furthermore, according to the study, the presence of
ascorbic acid in a physiologic saline solution may prevent the
oxidation of this eNOS cofactor during vessel storage and help maintain
eNOS function and nitric oxide generation in vascular endothelium. The
study authors also noted that ascorbic acid, by its reducing property,
may assist sustained long-term release of nitric oxide from these
compounds in vessels preserved in a physiologic saline solution and,
therefore, help maintain the patency and tone of the vessels during
storage. Additionally, according to the authors of the study, ascorbic
acid mediated reversal of endothelial dysfunction, reduced platelet
activation and leukocyte adhesion, inhibited smooth muscle cell
proliferation and lipid peroxidation, and increased prostacyclin
production which have been demonstrated in numerous cardiovascular
pathologies. Finally, the authors stated that L-arginine is a known
substrate of nitric oxide synthase and has been shown to decrease
neutrophil-endothelial cell interactions in inflamed vessels.\140\
---------------------------------------------------------------------------
    \139\ Thatte, H.S., Biswas, K.S., Najjar, S.F., Birjiniuk, V.,
Crittenden, M.D., Michel, T., and Khuri, S.F., ``Multi-Photon
Microscopic valuation of Saphenous Vein Endothelium and Its
Preservation With a New Solution, GALA.'' Annals Thoracic Surgery,
2003, vol. 75, pp. 1145-52.
    \140\ Ibid.
---------------------------------------------------------------------------
    Regarding the second criterion, whether a product is assigned to
the same or different MS-DRG, according to the applicant, cases
involving patients who may be eligible to receive treatment involving
DuraGraft[supreg] would be assigned to the same MS-DRGs as patients who
received treatment involving heparinized blood, saline, and electrolyte
solutions.
    Regarding the third criterion, whether the new use of the
technology involves the treatment of the same or similar type of
disease and the same or similar patient population, the applicant
indicated that heparinized blood, saline and electrolyte solutions
involve treatment of the same disease process and the same patient
population as DuraGraft[supreg].
    Based on the applicant's statements presented above, we are
concerned that the mechanism of action of DuraGraft[supreg] may be the
same or similar to other vein graft storage solutions. Specifically, we
are concerned that current solutions used in vein graft surgical
procedures may be similar to DuraGraft[supreg] in composition and
treatment indication and, therefore, have the same or similar mechanism
of action. We are inviting public comments on whether the
DuraGraft[supreg] meets the newness criterion.
    With regard to the cost criterion, the applicant conducted the
following analysis to demonstrate that the technology meets the cost
criterion. In order to identify the range of MS-DRGs that cases
representing potential patients who may be eligible for treatment using
DuraGraft[supreg] may map to, the applicant identified all MS-DRGs for
patients who underwent CABG. Specifically, the applicant searched the
FY 2017 MedPAR file for Medicare fee-for-service inpatient hospital
claims submitted between October 1, 2016 and September 30, 2017, and
identified potential cases that may be eligible for treatment using
DuraGraft[supreg] by the following ICD-10-PCS procedure codes:
[[Page 19308]]
------------------------------------------------------------------------
ICD-10-PCS  procedure code                Code description
------------------------------------------------------------------------
021009W...................  Bypass coronary artery, one artery from
                             aorta with autologous venous tissue, open
                             approach.
02100AW...................  Bypass coronary artery, one artery from
                             aorta with autologous arterial tissue, open
                             approach.
021049W...................  Bypass coronary artery, one artery from
                             aorta with autologous venous tissue,
                             percutaneous endoscopic approach.
02104AW...................  Bypass coronary artery, one artery from
                             aorta with autologous arterial tissue,
                             percutaneous endoscopic approach.
021109W...................  Bypass coronary artery, two arteries from
                             aorta with autologous venous tissue, open
                             approach.
02110AW...................  Bypass coronary artery, two arteries from
                             aorta with autologous arterial tissue, open
                             approach.
021149W...................  Bypass coronary artery, two arteries from
                             aorta with autologous venous tissue,
                             percutaneous endoscopic approach.
02114AW...................  Bypass coronary artery, two arteries from
                             aorta with autologous arterial tissue,
                             percutaneous endoscopic approach.
021209W...................  Bypass coronary artery, three arteries from
                             aorta with autologous venous tissue, open
                             approach.
02120AW...................  Bypass coronary artery, three arteries from
                             aorta with autologous arterial tissue, open
                             approach.
021249W...................  Bypass coronary artery, three arteries from
                             aorta with autologous venous tissue,
                             percutaneous endoscopic approach.
02124AW...................  Bypass coronary artery, three arteries from
                             aorta with autologous arterial tissue,
                             percutaneous endoscopic approach.
021309W...................  Bypass coronary artery, four or more
                             arteries from aorta with autologous venous
                             tissue, open approach.
02130AW...................  Bypass coronary artery, four or more
                             arteries from aorta with autologous
                             arterial tissue, open approach.
021349W...................  Bypass coronary artery, four or more
                             arteries from aorta with autologous venous
                             tissue, percutaneous endoscopic approach.
02134AW...................  Bypass coronary artery, four or more
                             arteries from aorta with autologous
                             arterial tissue, percutaneous endoscopic
                             approach.
------------------------------------------------------------------------
    This resulted in potential eligible cases spanning 100 MS-DRGs,
with approximately 93 percent of all of these potential cases, 66,553,
mapping to the following 10 MS-DRGs:
------------------------------------------------------------------------
          MS-DRG                            MS-DRG title
------------------------------------------------------------------------
MS-DRG 003................  Extracorporeal Membrane Oxygenation (ECMO)
                             or Tracheostomy with Mechanical Ventilation
                             >96 Hours or Principal Diagnosis Except
                             Face, Mouth & Neck with Major Operating
                             Room Procedure.
MS-DRG 216................  Cardiac Valve and Other Major Cardiothoracic
                             Procedures with Cardiac Catheterization
                             with MCC.
MS-DRG 219................  Cardiac Valve and Other Major Cardiothoracic
                             Procedures without Cardiac Catheterization
                             with MCC.
MS-DRG 220................  Cardiac Valve and Other Major Cardiothoracic
                             Procedures without Cardiac Catheterization
                             with CC.
MS-DRG 228................  Other Cardiothoracic Procedures with MCC.
MS-DRG 229................  Other Cardiothoracic Procedures without CC.
MS-DRG 233................  Coronary Bypass with Cardiac Catheterization
                             with MCC.
MS-DRG 234................  Coronary Bypass with Cardiac Catheterization
                             without MCC.
MS-DRG 235................  Coronary Bypass without Cardiac
                             Catheterization with MCC.
MS-DRG 236................  Coronary Bypass without Cardiac
                             Catheterization without MCC.
------------------------------------------------------------------------
    Using the 66,553 identified cases, the average case-weighted
unstandardized charge per case was $212,885. The applicant then
standardized the charges. The applicant did not remove charges for any
current treatment because the applicant indicated that there are no
other current treatment options available. The applicant noted that it
did not provide an inflation factor to project future charges. The
applicant added $2,751 in charges for the costs of the
DuraGraft[supreg] technology. This charge was created by assuming the
DuraGraft[supreg] technology will cost $850 per unit as estimated by
the applicant, and by applying the national average CCR for implantable
devices of 0.309 from the FY 2019 IPPS/LTCH PPS final rule (83 FR
41273) to the cost of the device. According to the applicant, no
further charges or related charges were added. Based on the FY 2019
IPPS/LTCH PPS final rule correction notice data file thresholds, the
average case-weighted threshold amount was $172,965. The final average
case-weighted standardized charge per case was $195,799. Because the
final average case-weighted standardized charge per case exceeds the
average case-weighted threshold amount, the applicant maintained that
the technology meets the cost criterion. We are inviting public
comments on whether DuraGraft[supreg] meets the cost criterion.
    With respect to the substantial clinical improvement criterion, the
applicant asserted that the use of DuraGraft[supreg] significantly
reduces clinical complications, such as MI, repeat revascularization
and MACE, associated with VGF following CABG surgery. The applicant
cited the following studies and report, each of which is summarized
below, to substantiate its assertions regarding substantial clinical
improvement: (1) Project of Ex-vivo Vein Graft Engineering via
Transfection (PREVENT IV) Subanalysis; (2) European Retrospective Pilot
Study (unpublished); (3) U.S. Department of Veterans Affairs (USDVA)
Hospital Retrospective Study; and (4) the SWEDEHEART 2016 Annual
Report.
    PREVENT IV is a prospective study that enrolled 3,000 patients and
included protocol driven angiograms at 12 months post-CABG, as opposed
to clinically-driven angiograms to evaluate the true incidence of VGF
following CABG surgery where standard-of-care solutions were used.\141\
Harskamp, et al. conducted subanalyses of the study data and found from
dozens of factors evaluated for impact on the development of 12-month
VGF (VGF was defined as a stenosis of the vein graft diameter of 75
percent or greater) that exposure to solutions used in PREVENT IV
(saline, blood, or buffered saline) for intra-operative graft wetting
and storage have the largest correlation with the development of
VGF.142 143
[[Page 19309]]
According to the applicant, short-term exposure of free vascular grafts
to these solutions is routine in CABG operations, where 10 minutes to 3
hours may elapse between the vein harvest and
reperfusion.144 145 According to Harskamp, et al., the
results of the PREVENT IV study showed that the majority of patients
had grafts preserved in saline, 1,339 patients (44.4 percent), followed
by 971 patients (32.2 percent) with grafts preserved in blood, and 507
patients (16.8 percent) with grafts preserved in buffered saline. One-
year VGF rates were much lower in the patients who were treated in the
buffered saline group than in the patients who were treated in the
saline group (patient-level odds ratio [OR], 0.59 [95 percent CI, 0.45-
0.78; P147 148 149 150
---------------------------------------------------------------------------
    \141\ Alexander, J.H., Hafley, G., Harrington, R.A., et al.,
``Efficacy and safety of Edifoligide, an E2F Transcription Factor
Decoy, for Prevention of Vein Graft Failure Following Coronary
Artery Bypass Graft Surgery: PREVENT IV: A Randomized Controlled
Trial,'' JAMA, 2005, vol. 294, pp. 2446-54.
    \142\ Harskamp, R.E., Alexander, J.H., Schulte, P.J., Brophy,
C.M., Mack, M.J., Peterson, E.D., Williams, J.B., Gibson, C.M.,
Califf, R.M., Kouchoukos, N.T., Harrington, R.A., Ferguson, Jr.,
T.B., Lopes, R.D., ``Vein Graft Preservation Solutions, Patency, and
Outcomes After Coronary Artery Bypass Graft Surgery Follow-up From
PREVENT IV Randomized Clinical Trial,'' JAMA Surg., 2014, vol.
149(8), pp. 798-805.
    \143\ Hess, C.N., Lopes, R.D., Gibson, C.M., et al., ``Saphenous
vein graft failure after coronary artery bypass surgery: insights
from PREVENT IV,'' Circulation, 2014 Oct 21, vol. 130(17), pp. 1445-
51.
    \144\ Motwani, J.G., Topol, E.J., ``Aortocoronary saphenous vein
graft disease: pathogenesis, predisposition and prevention,''
Circulation, 1998, vol. 97(9), pp. 916-31.
    \145\ Mills, N.L., Everson, C.T., ``Vein graft failure,'' Curr
Opin Cardiol, 1995, vol. 10, pp. 562-8.
    \146\ Harskamp, R.E., Alexander, J.H., Schulte, P.J., Brophy,
C.M., Mack, M.J., Peterson, E.D., Williams, J.B., Gibson, C.M.,
Califf, R.M., Kouchoukos, N.T., Harrington, R.A., Ferguson, Jr.,
T.B., Lopes, R.D., ``Vein Graft Preservation Solutions, Patency, and
Outcomes After Coronary Artery Bypass Graft Surgery Follow-up From
PREVENT IV Randomized Clinical Trial,'' JAMA Surg., 2014, vol.
149(8), pp. 798-805.
    \147\ Ibid.
    \148\ Weiss, D.R., et al., ``Extensive deendothelialization and
thrombogenicity in routinely prepared vein grafts for coronary
bypass operations: facts and remedy,'' Int J Clin Exp Med, 2009;
vol. 2, pp. 95-113.
    \149\ Wilbring, M., Tugtekin, S.M., Zatschler, B., Ebner, A.,
Reichenspurner, H., Matschke, K., Deussen, A., ``Even short-time
storage in physiological saline solution impairs endothelial
vascular function of saphenous vein grafts,'' Eur J Cardiothorac
Surg., 2011 Oct, vol. 40(4), pp. 811-815.
    \150\ Thatte, H.S., Biswas, K.S., Najjar, S.F., Birjiniuk, V.,
Crittenden, M.D., Michel, T., and Khuri, S.F., ``Multi-Photon
Microscopic valuation of Saphenous Vein Endothelium and Its
Preservation With a New Solution, GALA.'' Annals Thoracic Surgery,
2003, vol. 75, pp. 1145-52.
---------------------------------------------------------------------------
    In order to assess clinical outcomes associated with the use of
DuraGraft[supreg], the applicant opted to use readily available
databases associated with two hospitals that had noncommercial access
to the product through hospital pharmacies and, therefore, had real
world use of DuraGraft[supreg] treatment. The two retrospective cohort
studies, the European Retrospective Pilot Study and the USDVA Hospital
Retrospective Study, used these data bases to evaluate the
effectiveness and safety of the use of DuraGraft[supreg] during CABG
surgical procedures for post-CABG clinical complications associated
with VGF, including MI, repeat revascularization and MACE.
    The European Retrospective Pilot Study (which was a feasibility
study) was a retrospective study conducted to assess the safety and
efficacy of DuraGraft[supreg] treatment on both short (less than 30
days) and long-term (greater than or equal to 30 days and up to 5
years) clinical outcomes. This study became the basis for the design of
a larger retrospective study conducted at the USDVA Hospital, discussed
below. The feasibility study is unpublished.
    The European Retrospective Pilot study is a single-center clinical
study of CABG patients to evaluate the potential benefits of
DuraGraft[supreg] treatment as compared to a no-treatment control group
(saline). The investigator, who prepared the analysis, remained blinded
to individual patient data. A total of 630 patients who underwent
elective and isolated CABG surgery with at least one saphenous vein
graft between January 2002 and December 2008 were included. Eligibility
criteria were: (1) Patients with first-time CABG surgery in which at
least one vein graft was used; and (2) patients with in-situ internal
mammary artery (IMA) graft(s) only (no saphenous vein or free arterial
grafts). The single patient exclusion criteria were concomitant valve
surgery and/or aortic aneurysm repair. The institutional review board
of the University Health Alliance (UHA) approved the protocol, and
patients gave written informed consent for their follow-up. The no-
treatment control group (saline) included 375 patients who underwent
CABG surgery from January 2002 to May 2005, and the DuraGraft[supreg]
treatment group included 255 patients who underwent CABG surgery from
June 2005 to December 2008. During long-term follow-up, 5 patients were
lost to follow-up, and 10 patients died before the 30-day follow-up.
Therefore, a total of 247 patients from the DuraGraft[supreg] treatment
group (97 percent) and 368 patients from the no-treatment control group
(saline) (98 percent) were available for the long-term analysis.
Patients undergoing CABG surgery whose vascular grafts were treated
intra-operatively with DuraGraft[supreg] demonstrated no statistically
significant differences in MACE within the first 30 days following CABG
surgery. According to the applicant, these data suggest that
DuraGraft[supreg] treatment is at least as safe as the standard-of-care
used in CABG surgeries. Long-term outcomes between the two groups were
not statistically different. However, also according to the applicant,
a consistent numerical trend toward improved clinical outcomes for the
DuraGraft[supreg] treatment group compared to the no-treatment control
(saline) group was clearly identified. Although statistically
insignificant, there was a consistent reduction observed in the rates
for multiple endpoints such as all-cause death, MI, MACE, and
revascularization. This study found reductions in DuraGraft[supreg]-
treated grafts relative to saline for revascularization (57 percent),
MI (70 percent), MACE (37 percent), and all-cause death (23 percent)
compared to standard-of-care (heparinized saline/blood) through 5 years
follow-up. According to the applicant, based on the small sample size
for this evaluation of less than 630 patients and the known frequencies
of these events following CABG surgeries, statistical differences were
not expected. A subsequent post-hoc analysis also was performed by the
researchers at CHU Angers to evaluate whether any long-term clinical
variables (such as dual antiplatelet therapy, beta-blockers,
angiotensin receptor-blockers, statins, diabetes, lifestyle and other
factors) had any impact on the clinical outcomes of the study. The
conclusions of the post-hoc analyses were that the assessed long-term
clinical variables did not impact the clinical study outcomes.
    The second study, the USDVA Hospital Retrospective Study, was an
unpublished, independent PI initiated, single-center, multi-surgeon,
retrospective, comparative (DuraGraft[supreg] vs. Saline) clinical
trial, which was conducted to assess the safety and impact of
DuraGraft[supreg] treatment on both short and long-term clinical
outcomes in patients who underwent isolated CABG surgery with saphenous
vein grafts (SVGs) at the Boston (West Roxbury) VA
[[Page 19310]]
Medical Center between 1996 and 2004. From 1996 through 1999,
DuraGraft[supreg] treatment was not available and heparinized saline
was routinely used to wet and store grafts. From 2001 through 2004, the
Boston VA Medical Center began exclusively using DuraGraft[supreg],
which was prepared by the hospital's pharmacy. The applicant
highlighted that 2000 data was omitted from this analysis by the PI due
to the transition into the use of DuraGraft[supreg] and the uncertainty
of whether DuraGraft[supreg] or heparinized saline was used in CABG
patients during the transition period. Short-term clinical outcomes
were defined as perioperative and early post-operative events occurring
within the first 30 days after CABG including perioperative MI,
prolonged ventilation time (greater than 48 hours), prolonged time in a
coma (greater than 24 hours), renal failure, and death. Long-term
clinical outcomes were defined as events occurring greater than 30 days
after CABG including the need for repeat revascularization (that is,
repeat CABG or percutaneous coronary intervention [PCI]), non-fatal
acute MI (NFMI), all-cause death, and a composite of these MACE. The
primary study outcome was repeat revascularization, and the secondary
outcomes included MACE, NFMI, and all cause death.
    According to the applicant, although the study represents the non-
contemporaneous use of saline and DuraGraft[supreg], the potential
effect of ``time of CABG'' on outcomes was minimized in large part by
the fact that this was a single-center study in which the same surgeons
performed surgeries throughout the timeframe of this study.
Additionally, the applicant explained that published evidence
(including evidence collected from the same center) indicates that
outcomes from CABG surgery such as mortality, MI, and repeat
revascularization have not changed significantly between the time of
this study and the present day, suggesting that surgical and medical
improvements, differences in patient selection, and other factors which
may have occurred over the timeframe of the study likely had little
influence over the study results and, therefore, the statistically
significant differences that were observed are due to ``study article''
effect.151 152 153
---------------------------------------------------------------------------
    \151\ Goldman, S., Zadina, K., Mortiz, T., et al., ``Long-term
patency of saphenous vein and left internal mammary grafts after
coronary artery bypass surgery: results from a Department of
Veterans Affairs Cooperative Study,'' J Am Coll Cardiol, 2004, vol.
44, pp. 2149-2156.
    \152\ Granger, D.N. and Kvietys, P.R., ``Reperfusion Injury and
Reactive Oxygen Species: The Evolution of a Concept.'' Redox Biol.
2015 Dec; 6: 524-551. Published online 2015 Oct 8. doi: 10.1016/
j.redox.2015.08.020.
    \153\ Guibert, E.E., Petrenko, A.Y., Balaban, C.L., Somov, A.Y.,
Rodriguez, J.V., and Fuller, B.J., ``Organ Preservation: Current
Concepts and New Strategies for the Next Decade,'' Transfus Med
Hemother, 2011, vol. 38, pp. 125-142.
---------------------------------------------------------------------------
    Data were extracted from a total of 2,436 patients who underwent a
CABG procedure with at least 1 SVG from 1996 through 1999 (saline
control n=1,400 patients) and 2001 through 2004 (DuraGraft[supreg]
treatment n=1,036 patients). Patients were excluded from the study if
they had a prior history of CABG, had no use of SVG, or underwent
additional procedures during the CABG surgery.
    Review of patient characteristics between the two treatment arms
found the median age for the control group was 66 years old and 67
years old for the DuraGraft[supreg] treatment group. Mean follow-up in
the control treatment group was 9.95.6 years and 8.54.2 years for the DuraGraft[supreg] treatment group.
    Short-term clinical outcomes showed frequencies for individual
outcomes were low, at less than 5 percent for both treatment groups.
However, according to the applicant, there was a statistically
significant 77 percent reduction of perioperative MI in the
DuraGraft[supreg] group compared to the saline group, which may have
indicated a potential short-term benefit related to preserving the
endothelium.
    Long-term clinical outcomes for patients treated with
DuraGraft[supreg] compared to saline showed DuraGraft[supreg] patients
with significantly lower risk of repeat revascularization (primary
endpoint), non-fatal MI, and MACE outcomes. According to the applicant,
the frequency of repeat revascularization was significantly lower after
DuraGraft[supreg] treatment starting at 1,000 days onwards with a
statistically significant adjusted 35 percent risk reduction.
Additionally, the applicant noted that the use of DuraGraft[supreg] was
associated with significantly lower risk for non-fatal MI beginning at
30 days post CABG with an adjusted risk reduction of 36 percent
(HR:0.687; 95 percent CI: 0.499, 0.815; p=0.0003). This effect was even
more profound at 1,000 days onward, with a statistically significant
risk reduction of up to 45 percent. Finally, the applicant noted that
the occurrence of MACE was significantly reduced after
DuraGraft[supreg] treatment, with an adjusted risk reduction of 19
percent starting at 1,000 days after CABG. Both crude and inverse
probability weighting (IPW) adjusted models for these long-term
outcomes were summarized. Long-term mortality was comparable between
treatment groups: neither the crude nor IPW-adjusted model showed a
significant association between DuraGraft[supreg] exposure and time to
death, either beginning 30 days or 1,000 days after initial CABG
surgery. According to the applicant, this study supports not only
safety, but also improved long-term clinical outcomes in
DuraGraft[supreg]-treated CABG patients.
    According to the applicant, the data collected from this
statistically-powered USDVA Hospital Retrospective Study are consistent
with data collected in the European Retrospective Pilot Study in which
trend toward reductions of MI, repeat revascularization, and MACE were
observed in the DuraGraft[supreg] treatment group, lending confidence
that the observed trends in this study, as well as the European
Retrospective Pilot Study, represent real differences associated with
DuraGraft[supreg] use.
    The applicant also referenced data from the SWEDEHEART 2016 Annual
Report, a report on data extracted from the Swedish Cardiac Surgery
Registry, to assess whether changes in the surgical procedure and post-
op medications over the timeline of the USDVA Hospital Retrospective
Study could have impacted the clinical outcomes. The applicant believed
that these mortality data, which overlapped with the timeframe of the
USDVA Hospital Retrospective Study, would provide an indication of
whether such changes in the CABG procedure occurred over the relevant
time period.
    The applicant stated that the SWEDEHEART 2016 Annual Report was
published in 2017 and documented a fairly constant mortality rate
between 1995 and 2005 (we refer readers to the table below), which
overlapped the timeframe of the USDVA Hospital Retrospective Study
(1996 through 2004). The applicant noted that the data from the
SWEDEHEART 2016 Annual Report was extracted from the Swedish Cardiac
Surgery Registry, which collects data from all centers that are
performing, or have been performing, cardiac surgery in Sweden since
1992 and maintains 100 percent of the data covering the number of adult
cardiac surgery procedures. The applicant indicated that mortality data
are derived from the Swedish national population registry and,
therefore, are considered 100 percent complete and accurate. The
applicant noted that the 30-day mortality rate between 1996 and 2004
(the timeframe of the USDVA Hospital Retrospective Study) remained
fairly constant, even with CABG procedures performed by several
different hospitals and surgeons. According to the applicant, these
data indicate that
[[Page 19311]]
changes in the CABG procedure itself over the USDVA Hospital
Retrospective Study time period were not significant enough to impact
post-op mortality.
30-Day Mortality Rate (%) Between 1995 and 2005 Based on SWEDEHEART 2016
                              Annual Report
------------------------------------------------------------------------
                                                              30-day
                  Year                     Isolated CABD  mortality rate
                                              volume            (%)
------------------------------------------------------------------------
1995....................................           6,001             1.9
1996....................................           6,283             2.2
1997....................................           5,076             1.7
1998....................................           5,797               2
1999....................................           5,504             1.9
2000....................................           5,478             2.2
2001....................................           5,696             1.8
2002....................................           5,645             1.9
2003....................................           5,245             1.9
2004....................................           4,868               2
2005....................................           4,264             1.7
------------------------------------------------------------------------
    According to the applicant, the European Retrospective Pilot Study
and the USDVA Hospital Study demonstrated an association of reduced
risk of non-fatal MI, repeat revascularization, and MACE with
DuraGraft[supreg] treatment. However, we have a number of concerns
relating to whether these results support a finding of substantial
clinical improvement. We note that these studies are unpublished and
consist of a retrospective design, which may contribute to potential
sources of error such as confounding and bias. Moreover, the studies do
not account for other variables that may affect vein integrity such as
method of vein harvest, vein distention pressure, and controlling for
the use of glycoprotein (GP) IIb/IIIa inhibitors.154 155
---------------------------------------------------------------------------
    \154\ King, S., Short, M., Harmon, C., ``Glycoprotein IIb/IIIa
inhibitors: the resurgence of tirofiban,'' Vascul Pharmacol, 2016
March; vol. 78, pp. 10-16.
    \155\ Harskamp, R.E., Hoedemaker, N., Newby, L.K., Woudstra, P.,
Grundeken, M.J., Beijk, M.A., Piek, J.J., Tijssen, J.G., Mehta,
R.H., de Winter, R.J., ``Procedural and clinical outcomes after use
of the glycoprotein IIb/IIIa inhibitor abciximab for saphenous vein
graft interventions,'' Cardiovasc Revasc Med, 2016 Jan-Feb, vol.
17(1), pp. 19-23. Epub 2015 Oct 31. PMID: 26626961.
---------------------------------------------------------------------------
    With regard to the European Retrospective Pilot study,
specifically, we are concerned that there are no defined primary and
secondary long-term outcomes, no statistical plans to incorporate
adjustments for multiple comparisons, and no power calculations for the
expected differences in endpoints that would be biologically important.
Furthermore, we are concerned that saline was used as the control, as
opposed to buffered saline, which at the time was considered to be more
effective than saline and, therefore, may have been a more optimal
comparator.\156\ We also are concerned that certain information was not
available, including mean follow-up, patient-years follow-up and loss-
to-follow-up. Finally, the study did not appear to convey any
statistical differences for any of the short-term or long-term
endpoints.
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    \156\ Williams, J.B., Harskamp, R.E., Bose, S., Lawson, J.H.,
Alexander, J.H., Smith, P.K., Lopes, R.D., ``The Preservation and
Handling of Vein Grafts in Current Surgical Practice: Findings of a
Survey Among Cardiovascular Surgeons of Top-Ranked US Hospitals,''
JAMA Surg, 2015 Jul, vol. 150(7), pp. 681-3. PMID: 25970819.
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    With regard to the USDVA Hospital Retrospective Study, we note that
this study used heparinized saline as the comparator rather than
buffered saline. According to a survey published in 2015 of 90 major
U.S. medical centers, 40 percent were using buffered saline.\157\ Also,
we are concerned that the study population was limited to USDVA
hospital patients and was overwhelmingly white (95 percent) males (99
percent), due to the demographics available through the USDVA hospital
data source. We are concerned that this may affect the completeness of
the study and raise questions as to whether the data and results are
generalizable to other patient groups, to include, as acknowledged by
the applicant, nonveterans, women, and other racial/ethnic groups. We
also note that patients in the heparinized saline arm appeared to have
more comorbidities, more vein grafts, fewer arterial grafts and more
time on cardiopulmonary bypass as compared to the DuraGraft[supreg]
treatment arm suggesting there may have been differences in the health
of the patients in the two treatment arms prior to participation in the
study. Without more context explaining the cause of each of these
characteristics it may be difficult to substantiate the validity of the
study results. We also believe that it would have been helpful to
include coronary imaging studies with the results of the USDVA Hospital
Retrospective Study to correlate MI and revascularizations with vein
grafts. Without data from such studies, it is more difficult to
associate the solutions with the repeat revascularization outcomes.
---------------------------------------------------------------------------
    \157\ Ibid.
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    Furthermore, in the FY 2019 IPPS/LTCH PPS proposed rule (83 FR
20308) we noted our concern regarding the timeframe differences in the
saline and DuraGraft[supreg] arms in the USDVA Hospital Retrospective
Study. As discussed earlier in this section, the applicant expressed
that, although the USDVA Hospital Retrospective Study represents the
non-contemporaneous use of saline and DuraGraft[supreg], the potential
effect of ``time of CABG'' on outcomes was minimized in large part by
the fact that this was a single-center study in which the same surgeons
performed surgeries throughout the timeframe of this study. The
applicant also expressed that outcomes from CABG surgery such as
mortality, MI, and repeat revascularization have not changed
significantly between the time of the USDVA Hospital Retrospective
Study and the present day, suggesting that surgical and medical
improvements that may have occurred over the timeframe of the study
likely had little influence over the study results and, therefore, the
statistically significant differences that were observed are due to
``study article'' effect.158 159 160 We appreciate the
[[Page 19312]]
applicant identifying and speaking to this concern, as it was raised by
CMS in the FY 2019 IPPS/LTCH PPS proposed rule. However, we remain
concerned that the timeframe differences between the saline and
DuraGraft[supreg] arms in the USDVA Hospital Retrospective Study were
not accounted for in the analysis of the retrospective data taken from
the study.
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    \158\ Goldman, S., Zadina, K., Mortiz, T., et al., ``Long-term
patency of saphenous vein and left internal mammary grafts after
coronary artery bypass surgery: results from a Department of
Veterans Affairs Cooperative Study,'' J Am Coll Cardiol, 2004, vol.
44, pp. 2149-2156.
    \159\ Granger, D.N. and Kvietys, P.R., ``Reperfusion Injury and
Reactive Oxygen Species: The Evolution of a Concept,'' Redox Biol,
2015 Dec, vol. 6, pp. 524-551. Published online 2015 Oct 8. doi:
10.1016/j.redox.2015.08.020.
    \160\ Guibert, E.E., Petrenko, A.Y., Balaban, C.L., Somov, A.Y.,
Rodriguez, J.V., and Fuller, B.J., ``Organ Preservation: Current
Concepts and New Strategies for the Next Decade,'' Transfus Med
Hemother, 2011, vol. 38, pp. 125-142.
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    Additionally, although the applicant provided an explanation about
how to match patients via propensity scores, we are concerned that the
statistical plan did not include adjustments for multiple comparisons
nor did it include power calculations for the expected differences in
endpoints that would be biologically important.
    The applicant also provided information from the USDVA Hospital
Retrospective Study that suggested there are a significant number of
MACE-type events in the first 3 years after CABG. However, much of the
long-term data for the control group was missing, in particular, data
related to the first 30 to 999 days post-CABG. Finally, regarding the
secondary long-term-outcome of MACE, we are concerned the study did not
appear to include coronary cardiac mortality, non-coronary cardiac
mortality, and other cardiac morbidity within the definition of MACE.
    Also, as discussed above, the applicant referenced data from the
SWEDEHEART 2016 Annual Report, which noted a decline in the number of
CABG procedures (by approximately \1/3\) between 1996 and 2005. It is
unclear what contributed to the decline in CABG procedures during this
time period, particularly because, as the applicant indicated,
mortality rates remained fairly constant throughout this timeframe. We
believe the decline in the number of CABG procedures may also reflect
time-related differences in surgical management.
    We are inviting public comments on whether DuraGraft[supreg] meets
the substantial clinical improvement criterion. We did not receive any
written comments in response to the New Technology Town Hall meeting
notice published in the Federal Register regarding the substantial
clinical improvement criterion for DuraGraft[supreg] or at the New
Technology Town Hall meeting.
f. EluviaTM Drug-Eluting Vascular Stent System
    Boston Scientific Corporation submitted an application for new
technology add-on payments for the EluviaTM Drug-Eluting
Vascular Stent System for FY 2020. EluviaTM, a drug-eluting
stent for the treatment of lesions in the femoropopliteal arteries,
received FDA premarket approval (PMA) on September 18, 2018.
    According to the applicant, the EluviaTM system is a
sustained-release drug-eluting stent indicated for improving luminal
diameter in the treatment of peripheral artery disease (PAD) with
symptomatic de novo or restenotic lesions in the native superficial
femoral artery (SFA) and or proximal popliteal artery (PPA) with
reference vessel diameters (RVD) ranging from 4.0 to 6.0 mm and total
lesion lengths up to 190 mm.
    The applicant stated that PAD is a circulatory condition in which
narrowed arteries reduce blood flow to the limbs, usually in the legs.
Symptoms of PAD may include lower extremity pain due to varying degrees
of ischemia, claudication which is characterized by pain induced by
exercise and relieved with rest. According to the applicant, risk
factors for PAD include individuals who are age 70 years old and older;
individuals who are between the ages of 50 years old and 69 years old
with a history of smoking or diabetes; individuals who are between the
ages of 40 years old and 49 years old with diabetes and at least one
other risk factor for atherosclerosis; leg symptoms suggestive of
claudication with exertion, or ischemic pain at rest; abnormal lower
extremity pulse examination; known atherosclerosis at other sites (for
example, coronary, carotid, renal artery disease); smoking;
hypertension, hyperlipidemia, and homocysteinemia.\161\ PAD is
primarily caused by atherosclerosis--the buildup of fatty plaque in the
arteries. PAD can occur in any blood vessel, but it is more common in
the legs than the arms. Approximately 8.5 million people in the United
States have PAD, including 12 to 20 percent of individuals who are age
60 years old and older.\162\
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    \161\ Neschis, David G. & MD, Golden, M., ``Clinical features
and diagnosis of lower extremity peripheral artery disease.''
Available at: https://www.uptodate.com/contents/clinical-features-and-diagnosis-of-lower-extremity-peripheral-artery-disease.
    \162\ Centers for Disease Control and Prevention, ``Peripheral
Arterial Disease (PAD) Fact Sheet,'' 2018, Retrieved from https://www.cdc.gov/DHDSP/data_statistics/fact_sheets/fs_PAD.htm.
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    A diagnosis of PAD is established with the measurement of an ankle-
brachial index (ABI) less than or equal to 0.9. The ABI is a comparison
of the resting systolic blood pressure at the ankle to the higher
systolic brachial pressure. Duplex ultrasonography is commonly used, in
conjunction with the ABI, to identify the location and severity of
arterial obstruction.\163\
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    \163\ Berger, J. & Davies, M., ``Overview of lower extremity
peripheral artery disease,'' Retrieved October 29, 2018, from
https://www.uptodate.com/contents/overview-of-lower-extremity-peripheral-artery-disease.
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    Management of the disease is aimed at improving symptoms, improving
functional capacity, and preventing amputations and death. Management
of patients who have been diagnosed with lower extremity PAD may
include medical therapies to reduce the risk for future cardiovascular
events related to atherosclerosis, such as myocardial infarction,
stroke, and peripheral arterial thrombosis. Such therapies may include
antiplatelet therapy, smoking cessation, lipid-lowering therapy, and
treatment of diabetes and hypertension. For patients with significant
or disabling symptoms unresponsive to lifestyle adjustment and
pharmacologic therapy, intervention (percutaneous, surgical) may be
needed. Surgical intervention includes angioplasty, a procedure in
which a balloon-tip catheter is inserted into the artery and inflated
to dilate the narrowed artery lumen. The balloon is then deflated and
removed with the catheter. For patients with limb-threatening ischemia
(for example, pain while at rest and or ulceration), revascularization
is a priority to reestablish arterial blood flow. According to the
applicant, treatment of the SFA is problematic due to multiple issues
including high rate of restenosis and significant forces of
compression.
    The applicant describes EluviaTM Drug-Eluting Vascular
Stent System as a sustained-release drug-eluting self-expanding, nickel
titanium alloy (nitinol) mesh stent used to reestablish blood flow to
stenotic arteries. According to the applicant, the EluviaTM
stent is coated with the drug paclitaxel, which helps prevent the
artery from restenosis. The applicant stated that EluviaTM's
polymer-based drug delivery system is uniquely designed to sustain the
release of paclitaxel beyond 1 year to match the restenotic process in
the SFA. According to the applicant, the EluviaTM Stent
System is comprised of: (1) The implantable endoprosthesis; and (2) the
stent delivery system (SDS). On both the proximal and distal ends of
the stent, radiopaque markers made of tantalum increase visibility of
the stent to aid in placement. The tri-axial designed delivery system
consists of an outer shaft to stabilize the stent delivery system, a
middle shaft to protect and constrain the stent, and an inner shaft to
provide a guide wire lumen. The delivery system is compatible with
[[Page 19313]]
0.035 in (0.89 mm) guide wires. The EluviaTM stent is
available in a variety of diameters and lengths. The delivery system is
offered in 2 working lengths (75 cm and 130 cm).
    As discussed previously, if a technology meets all three of the
substantial similarity criteria, it would be considered substantially
similar to an existing technology and would, therefore, not be
considered ``new'' for purposes of new technology add-on payments.
    With regard to the first criterion, whether a product uses the same
or a similar mechanism of action to achieve a therapeutic outcome,
according to the applicant, EluviaTM uses a unique mechanism
of action which has not been utilized by previously available medical
devices for treating stenotic lesions in the SFA. The applicant
asserted that the EluviaTM Drug-Eluting Vascular Stent
System is a device/drug combination product composed of an implantable
stent, combined with a polybutyl methacrylate (PBMA) primer layer, a
paclitaxel/polyvinylidene difluoride (PVDF) polymer, and a stent
delivery system. According to the applicant, the polymer carries and
protects the drug before and during the procedure and ensures that the
drug is released into the tissue in a controlled, sustained manner to
prevent restenosis of the vessel. According to the applicant, the
EluviaTM system continues to deliver paclitaxel to combat
restenosis for 12 to 15 months, which involves a novel and distinct
mechanism of action different than other drug-coated balloons or drug-
coated stents that only deliver the drug to the artery for about 2
months. According to the applicant, the PBMA polymer is clinically
proven to permit the sustained release of paclitaxel to achieve a
therapeutic outcome. We note that, the applicant submitted a request
for consideration for approval at the March 2019 ICD-10 Coordination
and Maintenance Committee Meeting for a unique ICD-10-PCS procedure
code to describe procedures which use the EluviaTM stent
system.
    With regard to the second criterion, whether a technology is
assigned to the same or a different MS-DRG, the applicant asserted that
patients who may be eligible for treatment using the
EluviaTM system include hospitalized patients who have been
diagnosed with PAD. According to the applicant, these potential cases
may map to multiple MS-DRGs, the most likely being MS-DRGs 252 (Other
Vascular Procedures With MCC), 253 (Other Vascular Procedures With CC)
and 254 (Other Vascular Procedures Without CC/MCC). Potential cases
representing patients who may be eligible for treatment using the
EluviaTM system would be assigned to the same MS-DRGs as
cases representing hospitalized patients who have been diagnosed with
PAD and treated with currently available technologies.
    With regard to the third criterion, whether the new use of the
technology involves the treatment of the same or similar type of
disease and the same or similar patient population when compared to an
existing technology, according to the applicant, clinical conditions
that may require use of the EluviaTM stent system include
treatment of the same patient population as cases identified with a
variety of diagnosis codes from the ICD-10-CM category I70
(Atherosclerosis) as listed in the table below:
------------------------------------------------------------------------
      ICD-10-CM  diagnosis code                Code description
------------------------------------------------------------------------
I70.201.............................  Unspecified atherosclerosis of
                                       native arteries of extremities,
                                       right leg.
I70.202.............................  Unspecified atherosclerosis of
                                       native arteries of extremities,
                                       left leg.
I70.203.............................  Unspecified atherosclerosis of
                                       native arteries of extremities,
                                       bilateral legs.
I70.208.............................  Unspecified atherosclerosis of
                                       native arteries of extremities,
                                       other extremity.
I70.209.............................  Unspecified atherosclerosis of
                                       native arteries of extremities,
                                       unspecified extremity.
I70.211.............................  Atherosclerosis of native arteries
                                       of extremities with intermittent
                                       claudication, right leg.
I70.212.............................  Atherosclerosis of native arteries
                                       of extremities with intermittent
                                       claudication, left leg.
I70.213.............................  Atherosclerosis of native arteries