CMS’ 2017 IPPS final rule released
CMS released the fiscal year (FY) 2017 IPPS final rule August 2, and ICD-10-CM/PCS code changes and the addition of the Medicare Outpatient Observation Notice (MOON) both had starring roles. CMS also made changes to several quality initiatives and reversed the agency’s 0.2% payment reduction instituted along with the 2-midnight rule first implemented in the FY 2014 rule.
"Most coders have been hearing about the magnitudes of new codes being added to the ICD-10-CM and ICD-10-PCS code sets, and the final rule does not disappoint," says Shannon McCall, RHIA, CCS, CCS-P, CPC, CPC-I, CEMC, CRC, CCDS, director of HIM and coding for HCPro, a division of BLR, in Middleton, Massachusetts.
ICD-10-CM and ICD-10-PCS updates
The final rule includes tables with nearly 2,600 lines of new ICD-10-CM codes and 14,000 lines of ICD-10-PCS codes on the associated Excel spreadsheets, some of which were not mentioned in the proposed rule, says McCall.
"Even with the thousands of additions to the ICD-10-CM code set, I think many will find that the additions look scarier than they actually are," says McCall. "For example, adding laterality (right, left, bilateral, unspecified) to conditions like diabetes mellitus retinopathy codes (categories E08?E11 and E13) equated to over 250 ‘new’ codes, but in reality, they are just added specificity that equate them to the detail in other eye disorder codes."
The eye disorders (Chapter 7, categories H00?H59) overall have a significant number of additions by way of further specificity like new stages or presence of symptoms?creating over 300 codes in that category, says McCall.
CMS has also introduced nearly 4,000 new codes for ICD-10-PCS in the final rule. But, McCall says, similar to the ICD-10-CM additions, some of the new ICD-10-PCS codes aren’t new procedures, but simply increases in specificity for one or more characters, which may result in hundreds of new codes.
"An example is the added distinction by subdividing the body part option of the thoracic aorta into the ascending/arch and descending portions," says McCall. "Therefore, any PCS table that included an option for the thoracic aorta now includes different body part values for ascending/arch thoracic aorta and descending thoracic aorta. These can create hundreds of codes once you provide all approach options, all device options, and all qualifier options for the associated ICD-10-PCS tables."
One of the more significant coding changes CMS has made, says McCall, is recognizing hundreds of procedures that were illogically considered surgical in ICD-10-PCS for FY 2016 but will be reclassified as nonsurgical in FY 2017. The intent of the transition from ICD-9-CM Volume 3 to ICD-10-PCS was for procedures to remain in the same (or similar) MS-DRGs that they occupied prior to ICD-10 implementation. However, not all codes were successfully reclassified. The 2017 IPPS final rule addresses some of these instances, including percutaneous drainage procedures such as paracentesis, as well as procedures like esophageal banding and arterial catheterization. Tables 6P.4a?6P.4k include all the procedures that will be reassigned as nonsurgical for FY 2017, says McCall.
"The reason for the assignment errors were mapping errors from ICD-9-CM Volume 3 to ICD-10-PCS. For example, the mapping for paracentesis (whether it was diagnostic or therapeutic) should have been to ICD-9-CM Volume 3 procedure code 54.91, but for some reason a diagnostic paracentesis was mapped to 54.29 (other diagnostic procedures on abdominal region)," says McCall.
CMS responded in the final rule to this mapping issue by saying:
We agree with the commenters that diagnostic drainage of the peritoneal cavity is more accurately replicated with ICD-9-CM procedure code 54.91 (percutaneous abdominal drainage) for reporting diagnostic paracentesis procedures and it is designated as a non-O.R. procedure. Therefore, we agree that the designation of ICD-10-PCS procedure code 0W9G3ZX (drainage of peritoneal cavity, percutaneous approach, diagnostic) should also be changed from O.R. to non-O.R.
The MOON form
In addition to creating new diagnosis and procedure codes, CMS also created the MOON as part of the Notice of Observation Treatment and Implication for Care Eligibility Act.
The MOON is a CMS-developed standardized notice hospitals are required to give to Medicare patients. These patients must be receiving observation services as an outpatient for more than 24 hours, and the MOON must be given no later than 36 hours after observation services are initiated. Hospitals must give a verbal explanation of the MOON to patients and obtain a signature to acknowledge receipt and understanding of the notice.
Payment adjustments
CMS also indicated that payment rates will increase by 0.95% in FY 2017 compared to FY 2016 for hospitals participating in the Inpatient Quality Reporting (IQR) Program and EHR meaningful use, according to the rule.
"This also reflects a 1.5 percentage point reduction for documentation and coding required by the American Taxpayer Relief Act of 2012 and an increase of approximately 0.8 percentage points to remove the adjustment to offset the estimated costs of the two-midnight policy and address its effects in FYs 2014, 2015, and 2016," said CMS.
In addition, CMS created two adjustments to reverse the effects of the 0.2% cut it instituted along with the 2-midnight rule, which has been the source of an ongoing legal challenge by the American Hospital Association and other parties. More on this story can be found here: www.hcpro.com/HIM-320994-859/Court-gives-providers-a-chance-to-comment-on-2midnight-rule-payment-reduction.html.
CMS made a permanent adjustment of approximately 0.2% to remove the cut for FYs 2017 and onward, and a temporary adjustment of 0.8% to address the retroactive impacts of this cut for FYs 2014, 2015, and 2016.
Quality program updates
CMS finalized five changes to the Hospital-Acquired Condition Reduction Program in this rule, as well as updates to the IQR Program, changes to the Hospital Readmissions Reduction Program, and updates to the Hospital Value-Based Purchasing Program.
Listening to commenter feedback, CMS reduced requirements for reporting electronic clinical quality measures (eCQM) as part of the IQR Program. Originally, CMS proposed requiring hospitals to submit data on all 15 eCQMs, but finalized a policy requiring hospitals to report four quarters of data on an annual basis for eight of the available eCQMs.
The entirety of the final rule is available in PDF format on the Federal Register, and it is expected to be officially published Monday, August 22. CMS says the rule applies to approximately 3,330 acute care hospitals and approximately 430 long-term care hospitals, and it will affect discharges occurring on or after October 1, 2016.
The final rule can be downloaded here: www.federalregister.gov/public-inspection.
The related CMS fact sheet can be viewed here: www.cms.gov/Newsroom/MediaReleaseDatabase/Fact-sheets/2016-Fact-sheets-items/2016-08-02.html.