October 22, 2012

The Nuts and Bolts of IPPS
By Selena Chavis
For The Record
Vol. 24 No. 19 P. 10

Industry experts weigh in on the upcoming policy and payment changes outlined in Medicare’s Final Rule for 2013.

Initial industry reaction to the final rule updating Medicare’s payment policies and rates under the Inpatient Prospective Payment System (IPPS) for fiscal year 2013 suggests that the detail was fairly predictable.

Changes were slight due to the Centers for Medicare & Medicaid Services’ (CMS) partial code freeze to limit ICD-9 changes in preparation for ICD-10. “With the code freeze in effect, we did not expect many surprises,” says Barry Libman, RHIA, CCS, CCS-P, a coding educator and consultant. “[However], what is new is both useful and meaningful.”

The rule, which was released in August, is designed to promote accurate payment of inpatient services, strengthen the hospital inpatient quality reporting program, finalize new policies for the hospital value-based purchasing program, and enact a framework for two new quality reporting programs that will apply to PPS-exempt cancer and psychiatric hospitals paid under the inpatient psychiatric facilities PPS.

For the most part, it has met those goals, says Judy Sturgeon, CCS, CCDS, clinical coding/reimbursement compliance manager at Harris County Hospital District in Houston, who points out a few notable details that will impact HIM. “The codes aren’t a big deal, but there’s a new hospital-acquired condition [HAC] that does raise significant issues for both correct coding and correct reporting,” she says.

According to the CMS, the new rule will increase the overall payment rate to general acute care hospitals by 2.8% and operating payments by 2.3% in fiscal year 2013. These figures represent a projected total Medicare spending increase of $2 billion on inpatient hospital services compared with 2012.

The Effects on Coding
While one new procedure code was added to the ICD-9-CM Volume 3 code set for fiscal year 2013, there were no new Medicare severity diagnosis-related group (MS-DRG) or diagnosis codes included in the final rule. While not included in the IPPS proposed rule issued in March, procedure code 00.95, Injection or infusion of glucarpidase, was added to reflect the administration of glucarpidase (Varaxaze) to treat cancer patients with toxic levels of methotrexate in their blood due to impaired renal function.

Because it is a new technology, the CMS determined that the procedure was not affected by the partial code freeze and assigned a new code to capture it under 00.9, Other procedures and interventions.

Although no new diagnosis or MS-DRG codes were added, Libman notes there are some significant changes to the list of complications and comorbidities (CCs) and major CCs (MCCs). Specifically, the CMS changed the classifications of some malnutrition codes to better reflect and capture severity. Previously, codes 263.0, Moderate malnutrition, and 263.1, Mild malnutrition, were subcategories without a CC or MCC designation.

For this reason, code 263.9, Unspecified protein-calorie malnutrition, was often used as a subcategory that qualified as a CC to increase the weight of the MS-DRG. Because the diagnosis terminology did not directly coincide with the available codes, denials became a problem, Libman explains. This led the CMS to upgrade both 263.0 and 263.1 to CC status to correct the problem. “263.0 and 263.1 were not useful previously,” Libman says. “Now they are both comorbid conditions.”

Also receiving an upgrade to comorbid status is 440.4, Chronic total occlusion of artery of the extremities. Libman points out that the statistical analysis made sense since “the labor involved in treating these conditions is rather costly.”

Diagnosis code 584.8, Acute kidney failure with other specified pathological lesion in kidney, received a downgrade for 2013 from an MCC to a CC.

Along with the CC and MCC changes, the addition of two HACs is a notable change for the coming fiscal year. These additions include the following:

• Surgical site infection following cardiac implantable electronic device, which will be identified by diagnosis codes 996.61 or 998.59, combined with any of the following procedure codes: 00.50 to 00.54, 37.80 to 37.83, 37.85 to 37.87, 37.94, 37.96, 37.98, 37.74 to 37.77, 37.79, or 37.89.

• Iatrogenic pneumothorax with venous catheterization, which is identified by diagnosis code 512.1, is reported with code 38.93, Venous catheter.

Sturgeon says there could be issues with properly coding the new 512.1 HAC. “There is not a code specific to iatrogenic pneumothorax that was caused by a venous catheter,” she points out, noting that the additions may be “critically flawed if the intent is to potentially reduce payment to the hospital whenever the codes 512.1 and 38.93 are reported on the same claim.”

Sturgeon offers the following examples to illustrate her point. In the first, a patient has a pleural biopsy and a subsequent iatrogenic pneumothorax. He also had a venous catheter placed for infusion of therapeutic IV medication, but the biopsy, not the catheter, caused the pneumothorax. In this case, she says the pneumothorax would be incorrectly reported as an HAC due to the venous catheter.

A potentially different issue exists in the following two examples:

• A patient has a central venous catheter placed by radiological guidance into the subclavian vein and develops an iatrogenic pneumothorax from the process. The code for this venous catheter is 38.97, not 38.93.

• A subclavian totally implanted vascular access catheter and device is placed in the patient, who develops an iatrogenic pneumothorax as a result. The code for this venous catheter is 86.07, not 38.93.

In these two examples, the pneumothorax would not be reported even though it is an HAC in both instances.

“Are coders expected to code incorrectly in order to correctly capture the HAC?” Sturgeon asks. “Or do the Uniform Hospital Discharge Data Set guidelines and official coding guidelines outrank the new HAC criteria?”

In its rationale for including the new HAC condition iatrogenic pneumothorax with venous catheterization, the CMS acknowledges that the condition was considered in a proposed fiscal year 2009 rule but was not finalized due to lack of consensus regarding its preventability. Upon continued review, it was noted that “there [are] widely recognized guidelines that address the prevention of iatrogenic pneumothorax with venous catheterization, and we believe that iatrogenic pneumothorax in the context of venous catheterization is reasonably preventable through application of these evidence-based guidelines.”

For these conditions, as well as others already listed on the HAC list, inpatient facilities will not receive higher MS-DRG payments. In the final rule, the CMS projects total savings from all HACs will be $24 million in fiscal year 2013.

In addition to the new HACs, specificity also was added to the existing vascular catheter-associated infection HAC category through the additions of 999.32, Bloodstream infection due to central catheter, and 999.33, Local infection due to central venous catheter.

“I was also glad to see that the HAC list—which included the condition infection due to central venous catheter, 999.31—has been expanded to include the relatively new 999.32 and 999.33,” Sturgeon says. “Coding requires that the more specific code be used when documentation supports the added specificity, so CMS must have expected to lose money, so to speak, when the generic infection code acquired the two new options for reporting.”

Sturgeon adds that examples of these new codes could include bacteremia or sepsis due to the central venous catheter for 999.32 and cellulitis or an abscess at the site due to the central venous catheter for 999.33.

According to Libman, a positive change was made to the grouping logic of principal diagnosis code 487.0, Influenza with pneumonia, from a set of simple pneumonia MS-DRGs to a group that represents a more severe form of the condition. Based on requests and comments, these classifications were moved from 193, 194, and 195 to the higher-level MS-DRGs 177, 178, and 179. “That was a reasonable proposal and CMS quickly agreed,” he says.

Based on comments to the proposed rule that indicated procedure code 96.72, Continuous invasive mechanical ventilation for 96 consecutive hours or more, was not being used correctly, the CMS changed the Medicare code editor to include an edit when the length of stay (LOS) is reported at less than three days. “Medicare was seeing a lot of use of 96.72 where the LOS was not three days or more,” Libman says. “96.72 is to be used for LOS of more than three days.”

Inpatient Quality Reporting
As part of the IPPS final rule, the CMS reduced the number of quality measures included in the hospital inpatient quality reporting program from 72 to 59 for the fiscal year 2015 payment determination and then raised it to 60 for fiscal year 2016. The CMS indicates that the rationale behind the change is “intended to reduce burden on hospitals, create a more streamlined measure set and improve care through increased focus on perinatal care, surgical complications for hip and knee replacement procedures, readmission, and care transition.”

An update to the fiscal year 2014 program requirements also was included, reducing the annual random sample from 800 hospitals to 400 due to the fact that 99% of sampled hospitals reported accurate data in the most recent year.

Sturgeon believes there is nothing in the final rule regarding quality reporting that is expected to critically impact coding. While that may be the case, she emphasizes that, in a general sense, quality reporting programs do have a significant effect on productivity due to an increase in information requests.

“Here is a consistent concern: the push to get the charts coded quickly so that quality reporting can be timely and complete incentivizes the coding department to shove productivity over accuracy,” she says. “The downstream effects of that are significant. If the hurry to complete the coding reduces querying for ambiguous or conflicting documentation—and waiting for all of the charges to be submitted—the facility could lose money from undercoded charts, increase compliance risk when the result is overcoding, and lose money should late charges not get billed timely and have an impact on outlier payments.”

Value-Based Purchasing
Numerous policies related to value-based purchasing were outlined in the final rule with the aim of “better health care, better health in the entire population and lower costs through improvement,” according to the CMS.

Adjustments to hospital payments will begin in 2013 based on performance against outlined quality measures. The rule establishes the following:

• when hospitals will receive total performance scores;

• the application of the 1% reduction to base-operating DRG amounts for fiscal year 2013 discharges; and

• the institution of value-based incentive payments beginning this January with respect to discharges occurring during the fiscal year.

Also finalized were several policies for the 2015 value-based purchasing program, including the following:

• grouping and scoring measures in four domains: clinical process of care, patient experience of care, outcome, and efficiency;

• new measures, including two new outcome measures related to central line-associated bloodstream infections and patient safety;

• one new efficiency measure (Medicare spending per beneficiary);

• applicable minimum numbers of cases and measures for the expanded outcome domain and the new efficiency domain;

• finalized performance standards, including achievement thresholds and benchmarks for all measures as well as “floors” for all eight hospital consumer assessment of healthcare providers and systems dimensions; and

• domain weighting for hospital performance scores.

Other Considerations
Although somewhat tedious and long, Libman encourages HIM professionals to read the final rule published in the federal register. “There is a very interesting summary on present on admission and HAC reporting,” he says. “It’s really an eye-opening set of tables.”

— Selena Chavis is a Florida-based freelance journalist whose writing appears regularly in various trade and consumer publications covering everything from corporate and managerial topics to healthcare and travel.