CCS DRG Assignment & Case Mix 2 — Questions and Answers
Question 1: Which Medicare quality program penalizes hospitals with excessive 30-day readmission rates for specific conditions by reducing IPPS payments?
- Value-Based Purchasing (VBP) Program
- Hospital Readmissions Reduction Program (HRRP) (Correct answer)
- Hospital-Acquired Condition (HAC) Reduction Program
- Merit-Based Incentive Payment System (MIPS)
Correct answer: Hospital Readmissions Reduction Program (HRRP)
The Hospital Readmissions Reduction Program (HRRP) reduces Medicare IPPS payments to hospitals with excess readmission rates for specified conditions including AMI, heart failure, pneumonia, COPD, CABG, and joint replacement.
The HRRP, established by the ACA (Section 3025), requires CMS to reduce Medicare payments to hospitals with excess 30-day unplanned readmission rates for specified conditions. Current measures include AMI, HF, pneumonia, COPD, CABG, PTCA, and hip/knee arthroplasty. The penalty can be up to 3% of all Medicare IPPS payments - not just those related to the specific conditions. Accurate discharge disposition coding and principal diagnosis coding directly affect which readmissions are counted and attributed to facilities.
Question 2: In MS-DRG logic, what is an 'unacceptable principal diagnosis'?
- Any diagnosis code that is not in the ICD-10-CM code set
- A code that cannot be used as a principal diagnosis per MCE edits, such as a manifestation code or a code flagged as not principal (Correct answer)
- A code that produces a DRG with a relative weight below 0.5
- Any chronic condition sequenced first on the claim
Correct answer: A code that cannot be used as a principal diagnosis per MCE edits, such as a manifestation code or a code flagged as not principal
Unacceptable principal diagnosis codes are flagged by the Medicare Code Editor - these include manifestation codes, external cause codes, signs/symptoms that cannot be principal, and codes specifically flagged as unacceptable as principal.
The MCE maintains a list of unacceptable principal diagnosis codes. These include: manifestation codes (e.g., diabetic neuropathy must follow the diabetes code), external cause codes (V00-Y99 cannot be principal), codes for factors influencing health status (Z00-Z99 in some categories), and other codes that by clinical logic cannot be the reason for admission. When a coder sequences one of these codes as principal, the MCE returns an edit requiring correction before the DRG grouper processes the claim.
Question 3: What distinguishes an MS-DRG from an AP-DRG or APR-DRG?
- MS-DRGs are used only for Medicare; AP-DRGs and APR-DRGs are used for Medicaid and commercial payers
- MS-DRGs are the Medicare-specific DRG system; All Patient DRGs (AP-DRG) and All Patient Refined DRGs (APR-DRG) extend coverage to pediatric and non-Medicare populations with more severity levels (Correct answer)
- MS-DRGs include outpatient cases; AP-DRGs and APR-DRGs are inpatient only
- MS-DRGs assign CCs/MCCs; AP-DRGs use a different comorbidity methodology
Correct answer: MS-DRGs are the Medicare-specific DRG system; All Patient DRGs (AP-DRG) and All Patient Refined DRGs (APR-DRG) extend coverage to pediatric and non-Medicare populations with more severity levels
MS-DRGs were designed for Medicare; AP-DRGs and APR-DRGs were developed to better capture non-Medicare, pediatric, obstetric, and complex patients, with APR-DRGs adding severity of illness (SOI) and risk of mortality (ROM) subclasses.
MS-DRGs (Medicare Severity-DRGs) are the CMS system for Medicare IPPS payment. AP-DRGs (All Patient DRGs) were developed by 3M to classify all patient types including pediatric and obstetric cases that MS-DRGs handle less precisely. APR-DRGs (All Patient Refined DRGs) further add four severity of illness (SOI) subclasses (minor/moderate/major/extreme) and four risk of mortality (ROM) subclasses, providing much finer clinical differentiation. Medicaid and commercial payers often use AP-DRG or APR-DRG systems. CCS candidates should understand the differences.
Question 4: A principal diagnosis of 'chest pain, unspecified' (R07.9) for an inpatient admission may be flagged by the MCE. Why?
- Chest pain codes are always manifestation codes
- Non-specific symptom codes like chest pain may be flagged as questionable principal diagnoses if a definitive diagnosis was established after study (Correct answer)
- Chest pain cannot be coded in inpatient settings
- External cause codes must accompany all chest pain codes
Correct answer: Non-specific symptom codes like chest pain may be flagged as questionable principal diagnoses if a definitive diagnosis was established after study
For inpatient claims, coders should code the confirmed diagnosis established after study. If a definitive diagnosis was identified, sequencing the symptom code as principal when a confirmed diagnosis is documented is incorrect and may be flagged.
ICD-10-CM Official Guidelines Section II direct inpatient coders to code the condition established after study as principal diagnosis. If a patient was admitted for chest pain and found to have acute MI, the principal diagnosis should be the acute MI (I21.x), not chest pain (R07.9). Coding a symptom as principal when a definitive diagnosis exists violates coding guidelines and results in an inaccurate DRG assignment. The MCE may flag symptom codes as questionable principal diagnoses, triggering review. Exceptions apply when no definitive diagnosis was established.
Question 5: Under IPPS, what is the 'geometric mean length of stay' (GMLOS) for a DRG used to calculate?
- The maximum days a Medicare beneficiary can stay before the hospital receives no additional payment
- A statistical measure used in transfer payment calculations and outlier determinations (Correct answer)
- The minimum LOS required before a DRG payment is made
- The required LOS for quality reporting purposes
Correct answer: A statistical measure used in transfer payment calculations and outlier determinations
The geometric mean LOS (GMLOS) for each MS-DRG is used in transfer payment calculations (to determine if the transferring hospital gets a full or reduced DRG) and in outlier payment thresholds.
CMS publishes the geometric mean LOS and arithmetic mean LOS for each MS-DRG. The GMLOS is specifically used to calculate transfer payments. It is also used in determining outlier payments - when a case's costs significantly exceed the DRG payment threshold (cost outlier) or falls far below it (short-stay outlier). GMLOS is not a minimum LOS requirement; Medicare does not deny payment solely for short-stay cases unless medical necessity is lacking.
Question 6: What is the primary purpose of the OIG Work Plan as it relates to hospital inpatient coding?
- To specify new ICD-10-PCS codes for the upcoming fiscal year
- To identify areas of potential fraud, waste, and abuse in Medicare billing that OIG will actively audit (Correct answer)
- To establish MS-DRG relative weights for the new fiscal year
- To certify hospital coders who meet performance standards
Correct answer: To identify areas of potential fraud, waste, and abuse in Medicare billing that OIG will actively audit
The OIG Work Plan announces which Medicare billing areas will be subject to OIG review and audit in the coming year, alerting providers to high-risk coding and billing areas.
The Office of Inspector General (OIG) of HHS publishes an annual Work Plan outlining its planned audits, investigations, and reviews of Medicare and Medicaid programs. For inpatient coding, the Work Plan frequently targets high-risk areas such as DRG upcoding (especially MS-DRG pairs prone to one-level upcoding), HAC reporting, transfer policy compliance, and specific high-dollar DRGs. Awareness of the OIG Work Plan is essential for compliance programs - hospitals should conduct self-audits of Work Plan items to identify vulnerabilities before an OIG audit.
CCS DRG Assignment & Case Mix 2
Which Medicare quality program penalizes hospitals with excessive 30-day readmission rates for specific conditions by reducing IPPS payments?