News: CMS opens discussion on MS-DRG CC/MCC comprehensive analysis

Earlier this month, the CMS held a call to discuss the MS-DRG CC/MCC comprehensive analysis discussed in the fiscal year (FY) 2020 Inpatient Prospective Payment System (IPPS) proposed and final rules. The deadline for submitting comments on this is tomorrow, Friday, November 1. ACDIS’ regulatory committee is finalizing its comments and plans to submit them to CMS.

The call included a review of the method used to determine severity levels, as well as concluded with an open question and answer session between listeners and those representing CMS. According to CMS, “the aim of this call [was] to help the public formulate written comments on the current severity designations under consideration for FY 2021 rulemaking.”

To open the call, CMS Deputy Director for the Division of Acute Care Michelle Hudson said:

For the past few IPPS rulemaking cycles, we’ve discussed our ongoing efforts to perform a comprehensive severity level designation review for each diagnosis code that we refer to as our CC/MCC analysis. The goal was the build on the severity DRG work completed for FY 2008 that was subsequently converted to ICD-10, and to perform again a broad-based analysis of the severity levels within the MS-DRG system specific to ICD-10. The purpose is to increase DRG homogeneity, recognize the impact of varying severity levels on resource consumption and improve payment equity. This way we can better reflect the changes not only in the accuracy and completeness of the ICD-10 coding of the secondary diagnosis, but also in the characteristics of patients admitted to hospitals and the practice patterns within hospitals as well.

The FY 2020 proposed rule suggested a change in severity levels for just under 1,500 diagnosis codes. According to CMS, they received many comments requesting that the adoption of broad-based changes be delayed in order to provide additional time to evaluate those changes (including comments from ACDIS). After consideration of these comments, the final rule did not finalize any proposed changes.

“This allowed CMS to further examine potential changes to make sure they would appropriately reflect resource use based on the review of more recent data,” said Hudson.

Elizabeth McCullough, director of the Clinical and Economic Research Group at 3M Health Information Systems, explained the method used to determine severity levels within the final rule, using an “impact on resource” file made available by CMS as reference.

“Categorization of the diagnosis as either an MCC, a CC, or 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 an increased hospital resource use,” explained McCullough. Subgroups are broken down as follows:

• Subgroup 1: Patients with no other secondary diagnosis, or all secondary diagnosis codes are non-CC on the record
• Subgroup 2: Patients with at least one secondary diagnosis codes that is a CC, but no secondary diagnosis codes that are MCC
• Subgroup 3: Patients with one or more MCC secondary diagnosis code(s)

According to McCullough, CMS calculates a national average cost for each subgroup.

“The costs used in this report were computed using the same charge standardization approach used to compute cost computations in the MS-DRG relative weights,” she said. “This resulted in a set of expected cost values for each base MS-DRG for each of the three subgroups, which then an actual cost can be compared using indirect rate standardization techniques and incorporating the DRG for risk stratification in the comparison of the actual cost to the expected.”

After a thorough review of the method used to determine severity levels, the Q&A session was open to the public. Questions included how common resource utilization was accounted for, how the interactive effect of dropping certain codes as each subsequent code is evaluated was considered, and questions for consideration on aggregating family of codes across the family.

The call was finished with CMS reminding attendees the at the deadline for feedback regarding these proposed changes are due November 1. ACDIS encourages its members to review the proposals and send their comments/concerns to MSDRGclassificationchange@CMS.HHS.gov.

Editor’s note: A recording of this call as well as a transcript can be found on the official CMS website under section Special Open Door Forums with the date of October 8. A previous article about this call can be found on the ACDIS website.