Fixing Procedures Unrelated to Principal Diagnosis Grouping Logic in the 2024 IPPS Final Rule

The 2024 Inpatient Prospective Payment System (IPPS) Final Rule was issued in early August. It is a dense document, in excess of 2,000 pages, and its creators inform us what comments came in on the proposed rule, with their specific responses.

I am not sure it is crucial to post every comment and reaction. I think it just bloats the rule and make it harder to find the finalized decision. In fact, I emailed them and suggested that they highlight the final verdict in bold so that it is easier to locate in the document.

Last week, Laurie Johnson went over the changes in the 2024 Final Rule, and I had the pleasure of serving as color commentator during the IPPS Summit. It is available on demand, so feel free to register and see what you missed.

Today, however, I am going to present something I found very interesting in my perusal of the Final Rule – and I hope you find it interesting, too.

There are two sets of Medicare Severity Diagnosis-Related Groups, MS-DRGs, which capture procedures unrelated to the principal diagnosis (PDx). MS-DRGs 981-983 includes extensive operating-room (OR) procedures, and MS-DRGs 987-989 refer to non-extensive OR procedures, each being a three-way split DRG set. If a patient is in the hospital for severe exacerbation of heart failure and they develop appendicitis requiring appendectomy during the admission, their procedure is unrelated to their PDx of acute-on-chronic systolic heart failure. They would land in MS-DRG 981-983, depending on what their secondary diagnoses were.

However, there are times when a patient has a principal diagnosis that rationally leads to an operative procedure, clinically speaking, but the DRG logic triggers the unrelated characterization. Knowledgeable coders and administrators recognize when this mismatch seems unfounded and petition for reconsideration. My guess is that these issues arise either from an oversight with the original logic or from a new approach or procedure being discovered to be useful for that condition (which needs to be added to the logic).

Let me illustrate:

A patient has a vesicointestinal fistula, N32.1, which is an abnormal communication between the bowel and the bladder. The anatomy is such that it is usually the sigmoid colon involved, and sometimes in definitively addressing this operatively, that part of the bowel must be resected. 0DTN4ZZ, Resection of sigmoid colon, percutaneous approach, when performed on a patient with a PDx of N32.1, in Major Diagnostic Category (MDC) 11, Diseases and Disorders of the Kidney and Urinary Tract, was landing in an extensive procedure unrelated to the PDx MS-DRG. This did not make clinical sense. 0DTN0ZZ, Resection of sigmoid colon, open approach, was able to group to MS-DRGs 673-675, Other kidney and urinary tract procedures. It was either an oversight, or when the logic was assembled, percutaneous resection of the sigmoid colon wasn’t being done.

The solution was to add the ICD-10-PCS code 0DTN4ZZ, to MDC 11. Now, percutaneous resection of the sigmoid colon can legitimately land in MS-DRGs 673-675, Other kidney and urinary tract procedures, as well as be retained in MS-DRGs 329-331, Major small and large bowel procedures, and DRGs related to lymphoma, leukemia, other neoplasms, injuries, and multiple significant trauma.

Another example concerned open excision of muscle. The most common cause eliciting this procedure is gangrene, a condition in which body tissue dies from ischemia and muscle infarction, and it codes to I96, Gangrene, not elsewhere classified. This code has the non-essential modifiers of connective tissue and skin.

Gangrene as a PDx is housed in MDC 05, Diseases and Disorders of the Circulatory System. The open-approach excision of muscle was only able to match the principal diagnosis in MS-DRGs involving peripheral, cranial nerve, and other nervous system procedures; soft tissue procedures; other skin, subcutaneous tissue, and breast procedures; and OR procedures for injuries and multiple significant traumas. This caused a mismatch when gangrene of muscle resulted in an open excision of muscle, plopping the encounter into an extensive procedure unrelated to the PDx DRG. The Centers for Medicare & Medicaid Services (CMS) agreed that this was inappropriate, and that the debridement treatment was related to the diagnosis. The solution was to add MS-DRG 264 (in MDC 05), Other circulatory system OR procedures, to the list of allowable DRGs for I96.

Sometimes the mismatch results from a combination code located in an MDC that doesn’t correspond to the part of the combination triggering the procedure. If a patient has hypertension and heart disease or chronic kidney disease, they are assigned the combination code of hypertensive heart and/or chronic kidney disease, according to assumed linkage. These codes are in MDC 05 due to hypertension being a disorder of the circulatory system.

Ureteral dilation of the ureters with stents is most often done for obstruction (like from nephrolithiasis) in MDC 11, but if it is performed in MDC 05 to try to revive failing kidneys, it has been grouping into MS-DRG 987-989. CMS is again adding MS-DRG 264 to the permissible DRGs for dilation of right, left, or both ureters with stenting. I found it interesting that a commenter suggested instead moving the PDx to MDC 11, but CMS declined because they feared that this might result in other inadvertently unrelated OR procedure mismatches.

The last change involves occlusion of the splenic artery with the PDx of major laceration of the spleen, when it is in MDC 16, Diseases and Disorders of Blood, Blood Forming Organs and Immunologic Disorders, presumably in an isolated splenic injury scenario. This resulted in grouping to MS-DRGs 987-989. When comparing the data of costs and length of stay, CMS felt that MS-DRGs 799-801, Splenectomy, would be most suitable.

They also had to change the name of the MS-DRG set to reflect the change, and it will now be called “Splenic Procedures” (with MCC, with CC, and without CC/MCC). This demonstrates how CMS has to assess the total impact their changes will make – having to change the title.

Of course, there were many other fascinating changes in the 2024 IPPS Final Rule. Feel free to check out the IPPS Summit if you’d like to see the rest.

Programming note: Listen to Dr. Erica Remer every Tuesday when she cohosts Talk Ten Tuesdays with Chuck Buck, 10 Eastern.