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

Cited as:84 FR 19158
Court:Centers For Medicare & Medicaid Services
Publication Date:03 May 2019
Record Number:2019-08330
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
                -----------------------------------------------------------------------
                Centers for Medicare & Medicaid Services
                -----------------------------------------------------------------------
                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]]
                -----------------------------------------------------------------------
                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.
                -----------------------------------------------------------------------
                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
                [[Page 19163]]
                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
                [[Page 19164]]
                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
                [[Page 19165]]
                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.
                BILLING CODE 4120-01-P
                [[Page 19259]]
                [GRAPHIC] [TIFF OMITTED] TP03MY19.004
                [[Page 19260]]
                [GRAPHIC] [TIFF OMITTED] TP03MY19.005
                [[Page 19261]]
                [GRAPHIC] [TIFF OMITTED] TP03MY19.006
                [[Page 19262]]
                [GRAPHIC] [TIFF OMITTED] TP03MY19.007
                [[Page 19263]]
                [GRAPHIC] [TIFF OMITTED] TP03MY19.008
                [[Page 19264]]
                [GRAPHIC] [TIFF OMITTED] TP03MY19.009
                [[Page 19265]]
                [GRAPHIC] [TIFF OMITTED] TP03MY19.010
                [[Page 19266]]
                [GRAPHIC] [TIFF OMITTED] TP03MY19.011
                [[Page 19267]]
                [GRAPHIC] [TIFF OMITTED] TP03MY19.012
                [[Page 19268]]
                [GRAPHIC] [TIFF OMITTED] TP03MY19.013
                [[Page 19269]]
                [GRAPHIC] [TIFF OMITTED] TP03MY19.014
                [[Page 19270]]
                [GRAPHIC] [TIFF OMITTED] TP03MY19.015
                [[Page 19271]]
                [GRAPHIC] [TIFF OMITTED] TP03MY19.016
                BILLING CODE 4120-01-C
                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 Novemb