[Federal Register Volume 80, Number 158 (Monday, August 17, 2015)]
[Rules and Regulations]
[Pages 49325-49843]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2015-19049]



[[Page 49325]]

Vol. 80

Monday,

No. 158

August 17, 2015

Part II





Department of Health and Human Services





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Centers for Medicare & Medicaid Services





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42 CFR Part 412





Medicare Program; Hospital Inpatient Prospective Payment Systems for 
Acute Care Hospitals and the Long-Term Care Hospital Prospective 
Payment System Policy Changes and Fiscal Year 2016 Rates; Revisions of 
Quality Reporting Requirements for Specific Providers, Including 
Changes Related to the Electronic Health Record Incentive Program; 
Extensions of the Medicare-Dependent, Small Rural Hospital Program and 
the Low-Volume Payment Adjustment for Hospitals; Final Rule

Federal Register / Vol. 80, No. 158 / Monday, August 17, 2015 / Rules 
and Regulations

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DEPARTMENT OF HEALTH AND HUMAN SERVICES

Centers for Medicare & Medicaid Services

42 CFR Part 412

[CMS-1632-F and IFC]
RIN-0938-AS41


Medicare Program; Hospital Inpatient Prospective Payment Systems 
for Acute Care Hospitals and the Long-Term Care Hospital Prospective 
Payment System Policy Changes and Fiscal Year 2016 Rates; Revisions of 
Quality Reporting Requirements for Specific Providers, Including 
Changes Related to the Electronic Health Record Incentive Program; 
Extensions of the Medicare-Dependent, Small Rural Hospital Program and 
the Low-Volume Payment Adjustment for Hospitals

AGENCY: Centers for Medicare and Medicaid Services (CMS), HHS.

ACTION: Final rule; interim final rule with comment period.

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SUMMARY: We are revising the Medicare hospital inpatient prospective 
payment systems (IPPS) for operating and capital-related costs of acute 
care hospitals to implement changes arising from our continuing 
experience with these systems for FY 2016. Some of these changes 
implement certain statutory provisions contained in the Patient 
Protection and Affordable Care Act and the Health Care and Education 
Reconciliation Act of 2010 (collectively known as the Affordable Care 
Act), the Pathway for Sustainable Growth Reform (SGR) Act of 2013, the 
Protecting Access to Medicare Act of 2014, the Improving Medicare Post-
Acute Care Transformation Act of 2014, the Medicare Access and CHIP 
Reauthorization Act of 2015, and other legislation. We also are 
addressing the update of the rate-of-increase limits for certain 
hospitals excluded from the IPPS that are paid on a reasonable cost 
basis subject to these limits for FY 2016. As an interim final rule 
with comment period, we are implementing the statutory extensions of 
the Medicare-dependent, small rural hospital (MDH) Program and changes 
to the payment adjustment for low-volume hospitals under the IPPS.
    We also are updating the payment policies and the annual payment 
rates for the Medicare prospective payment system (PPS) for inpatient 
hospital services provided by long-term care hospitals (LTCHs) for FY 
2016 and implementing certain statutory changes to the LTCH PPS under 
the Affordable Care Act and the Pathway for Sustainable Growth Rate 
(SGR) Reform Act of 2013 and the Protecting Access to Medicare Act of 
2014.
    In addition, we are establishing new requirements or revising 
existing requirements for quality reporting by specific providers 
(acute care hospitals, PPS-exempt cancer hospitals, and LTCHs) that are 
participating in Medicare, including related provisions for eligible 
hospitals and critical access hospitals participating in the Medicare 
Electronic Health Record (EHR) Incentive Program. We also are updating 
policies relating to the Hospital Value-Based Purchasing (VBP) Program, 
the Hospital Readmissions Reduction Program, and the Hospital-Acquired 
Condition (HAC) Reduction Program.

DATES: Effective Date: This final rule is effective on October 1, 2015.
    Applicability Date: The provisions of the interim final rule with 
comment period portion of this rule (presented in section IV.L. of the 
preamble) are applicable for discharges on or after April 1, 2015 and 
on or before September 30, 2017.
    Comment Period: To be assured consideration, comments on the 
interim final rule with comment period presented in section IV.L. of 
this document must be received at one of the addresses provided in the 
ADDRESSES section no later than 5 p.m. EST on September 29, 2015.

ADDRESSES: In commenting, please refer to file code CMS-1632-IFC. 
Because of staff and resource limitations, we cannot accept comments by 
facsimile (FAX) transmission.
    You may submit comments in one of four ways (no duplicates, 
please):
    1. Electronically. You may (and we encourage you to) submit 
electronic comments on this regulation to http://www.regulations.gov. 
Follow the instructions under the ``submit a comment'' tab.
    2. By regular mail. You may mail written comments to the following 
address ONLY:

Centers for Medicare & Medicaid Services, Department of Health and 
Human Services, Attention: CMS-1632-IFC, P.O. Box 8013, Baltimore, MD 
21244-1850.

    Please allow sufficient time for mailed comments to be received 
before the close of the comment period.
    3. By express or overnight mail. You may send written comments via 
express or overnight mail to the following address ONLY:

Centers for Medicare & Medicaid Services, Department of Health and 
Human Services, Attention: CMS-1632-IFC, Mail Stop C4-26-05, 7500 
Security Boulevard, Baltimore, MD 21244-1850.

    4. By hand or courier. If you prefer, you may deliver (by hand or 
courier) your written comments before the close of the comment period 
to either of the following addresses:
    a. For delivery in Washington, DC--Centers for Medicare & Medicaid 
Services, Department of Health and Human Services, Room 445-G, Hubert 
H. Humphrey Building, 200 Independence Avenue SW., Washington, DC 
20201.
    (Because access to the interior of the Hubert H. Humphrey Building 
is not readily available to persons without Federal Government 
identification, commenters are encouraged to leave their comments in 
the CMS drop slots located in the main lobby of the building. A stamp-
in clock is available for persons wishing to retain a proof of filing 
by stamping in and retaining an extra copy of the comments being 
filed.)
    b. For delivery in Baltimore, MD-- Centers for Medicare & Medicaid 
Services, Department of Health and Human Services, 7500 Security 
Boulevard, Baltimore, MD 21244-1850.
    If you intend to deliver your comments to the Baltimore address, 
please call the telephone number (410) 786-7195 in advance to schedule 
your arrival with one of our staff members.
    Comments mailed to the addresses indicated as appropriate for hand 
or courier delivery may be delayed and received after the comment 
period.
    For information on viewing public comments, we refer readers to the 
beginning of the SUPPLEMENTARY INFORMATION section.

FOR FURTHER INFORMATION CONTACT: Ing-Jye Cheng, (410) 786-4548 and 
Donald Thompson, (410) 786-4487, Operating Prospective Payment, MS-
DRGs, Deficit Reduction Act Hospital-Acquired Acquired Conditions--
Present on Admission (DRA HAC-POA) Program, Hospital-Acquired 
Conditions Reduction Program, Hospital Readmission Reductions Program, 
Wage Index, New Medical Service and Technology Add-On Payments, 
Hospital Geographic Reclassifications, Graduate Medical Education, 
Capital Prospective Payment, Excluded Hospitals, Medicare 
Disproportionate Share Hospital (DSH), Medicare-dependent, small rural 
hospital (MDH), and Low Volume Hospital Payment Adjustment Issues.
    Michele Hudson, (410) 786-4487, Long-Term Care Hospital Prospective

[[Page 49327]]

Payment System and MS-LTC-DRG Relative Weights Issues.
    Siddhartha Mazumdar, (410) 786-6673, Rural Community Hospital 
Demonstration Program Issues.
    Cindy Tourison, (410) 786-1093, Hospital Inpatient Quality 
Reporting and Hospital Value-Based Purchasing--Program Administration, 
Validation, and Reconsideration Issues.
    Pierre Yong, (410) 786-8896, Hospital Inpatient Quality Reporting--
Measures Issues Except Hospital Consumer Assessment of Healthcare 
Providers and Systems Issues.
    Elizabeth Goldstein, (410) 786-6665, Hospital Inpatient Quality 
Reporting--Hospital Consumer Assessment of Healthcare Providers and 
Systems Measures Issues.
    Mary Pratt, (410) 786-6867, LTCH Quality Data Reporting Issues.
    Kim Spalding Bush, (410) 786-3232, Hospital Value-Based Purchasing 
Efficiency Measures Issues.
    James Poyer, (410) 786-2261, PPS-Exempt Cancer Hospital Quality 
Reporting Issues.
    Deborah Krauss, (410) 786-5264, and Alexandra Mugge, (410) 786-
4457, EHR Incentive Program Clinical Quality Measure Related Issues.
    Elizabeth Myers, (410) 786-4751, EHR Incentive Program Nonclinical 
Quality Measure Related Issues.
    Lauren Wu, (202) 690-7151, Certified EHR Technology Related Issues.
    Kellie Shannon, (410) 786-0416, Simplified Cost Allocation 
Methodology Issues

SUPPLEMENTARY INFORMATION:

Electronic Access

    Inspection of Public Comments: All public comments received before 
the close of the comment period are available for viewing by the 
public, including any personally identifiable or confidential business 
information that is included in a comment. We post all public comments 
received before the close of the comment period on the following Web 
site as soon as possible after they have been received: http://www.regulations.gov. Follow the search instructions on that Web site to 
view public comments.
    This Federal Register document is also available from the Federal 
Register online database through Federal Digital System (FDsys), a 
service of the U.S. Government Printing Office. This database can be 
accessed via the Internet at: http://www.gpo.gov/fdsys.

Tables Available Only Through the Internet on the CMS Web site

    In the past, a majority of the tables referred to throughout this 
preamble and in the Addendum to the proposed rule and the final rule 
were published in the Federal Register as part of the annual proposed 
and final rules. However, beginning in FY 2012, some of the IPPS tables 
and LTCH PPS tables are no longer published in the Federal Register. 
Instead, these tables are generally only available through the 
Internet. The IPPS tables for this final rule are available through the 
Internet on the CMS Web site at: http://www.cms.hhs.gov/Medicare/medicare-Fee-for-Service-Payment/AcuteInpatientPPS/index.html. Click on 
the link on the left side of the screen titled, ``FY 2016 IPPS Final 
Rule Home Page'' or ``Acute Inpatient--Files for Download''. The LTCH 
PPS tables for this FY 2016 final rule are available through the 
Internet on the CMS Web site at: http://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/LongTermCareHospitalPPS/index.html under the 
list item for Regulation Number CMS-1632-F. For further details on the 
contents of the tables referenced in this final rule, we refer readers 
to section VI. of the Addendum to this final rule.
    Readers who experience any problems accessing any of the tables 
that are posted on the CMS Web sites identified above should contact 
Michael Treitel at (410) 786-4552.

Acronyms

3M 3M Health Information System
AAMC Association of American Medical Colleges
ACGME Accreditation Council for Graduate Medical Education
ACoS American College of Surgeons
AHA American Hospital Association
AHIC American Health Information Community
AHIMA American Health Information Management Association
AHRQ Agency for Healthcare Research and Quality
AJCC American Joint Committee on Cancer
ALOS Average length of stay
ALTHA Acute Long Term Hospital Association
AMA American Medical Association
AMGA American Medical Group Association
AMI Acute myocardial infarction
AOA American Osteopathic Association
APR DRG All Patient Refined Diagnosis Related Group System
APRN Advanced practice registered nurse
ARRA American Recovery and Reinvestment Act of 2009, Public Law 111-
5
ASCA Administrative Simplification Compliance Act of 2002, Public 
Law 107-105
ASITN American Society of Interventional and Therapeutic 
Neuroradiology
ASPE Assistant Secretary for Planning and Evaluation [DHHS]
ATRA American Taxpayer Relief Act of 2012, Public Law 112-240
BBA Balanced Budget Act of 1997, Public Law 105-33
BBRA Medicare, Medicaid, and SCHIP [State Children's Health 
Insurance Program] Balanced Budget Refinement Act of 1999, Public 
Law 106-113
BIPA Medicare, Medicaid, and SCHIP [State Children's Health 
Insurance Program] Benefits Improvement and Protection Act of 2000, 
Public Law 106-554
BLS Bureau of Labor Statistics
CABG Coronary artery bypass graft [surgery]
CAH Critical access hospital
CARE [Medicare] Continuity Assessment Record & Evaluation 
[Instrument]
CART CMS Abstraction & Reporting Tool
CAUTI Catheter-associated urinary tract infection
CBSAs Core-based statistical areas
CC Complication or comorbidity
CCN CMS Certification Number
CCR Cost-to-charge ratio
CDAC [Medicare] Clinical Data Abstraction Center
CDAD Clostridium difficile-associated disease
CDC Center for Disease Control and Prevention
CERT Comprehensive error rate testing
CDI Clostridium difficile (C. difficile)
CFR Code of Federal Regulations
CLABSI Central line-associated bloodstream infection
CIPI Capital input price index
CMI Case-mix index
CMS Centers for Medicare & Medicaid Services
CMSA Consolidated Metropolitan Statistical Area
COBRA Consolidated Omnibus Reconciliation Act of 1985, Public Law 
99-272
COLA Cost-of-living adjustment
COPD Chronis obstructive pulmonary disease
CPI Consumer price index
CQM Clinical quality measure
CY Calendar year
DACA Data Accuracy and Completeness Acknowledgement
DPP Disproportionate patient percentage
DRA Deficit Reduction Act of 2005, Public Law 109-171
DRG Diagnosis-related group
DSH Disproportionate share hospital
EBRT External Bean Radiotherapy
ECI Employment cost index
eCQM Electronic clinical quality measure
EDB [Medicare] Enrollment Database
EHR Electronic health record
EMR Electronic medical record
EMTALA Emergency Medical Treatment and Labor Act of 1986, Public Law 
99-272
EP Eligible professional
FAH Federation of American Hospitals
FDA Food and Drug Administration
FFY Federal fiscal year
FPL Federal poverty line
FQHC Federally qualified health center
FR Federal Register
FTE Full-time equivalent
FY Fiscal year
GAF Geographic Adjustment Factor

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GME Graduate medical education
HAC Hospital-acquired condition
HAI Healthcare-associated infection
HCAHPS Hospital Consumer Assessment of Healthcare Providers and 
Systems
HCFA Health Care Financing Administration
HCO High-cost outlier
HCP Healthcare personnel
HCRIS Hospital Cost Report Information System
HHA Home health agency
HHS Department of Health and Human Services
HICAN Health Insurance Claims Account Number
HIPAA Health Insurance Portability and Accountability Act of 1996, 
Public Law 104-191
HIPC Health Information Policy Council
HIS Health information system
HIT Health information technology
HMO Health maintenance organization
HPMP Hospital Payment Monitoring Program
HSA Health savings account
HSCRC [Maryland] Health Services Cost Review Commission
HSRV Hospital-specific relative value
HSRVcc Hospital-specific relative value cost center
HQA Hospital Quality Alliance
HQI Hospital Quality Initiative
HwH Hospital-within-hospital
IBR Intern- and Resident-to-Bed Ratio
ICD-9-CM International Classification of Diseases, Ninth Revision, 
Clinical Modification
ICD-10-CM International Classification of Diseases, Tenth Revision, 
Clinical Modification
ICD-10-PCS International Classification of Diseases, Tenth Revision, 
Procedure Coding System
ICR Information collection requirement
ICU Intensive care unit
IGI IHS Global Insight, Inc.
IHS Indian Health Service
IME Indirect medical education
I-O Input-Output
IOM Institute of Medicine
IPF Inpatient psychiatric facility
IPFQR Inpatient Psychiatric Facility Quality Reporting [Program]
IPPS [Acute care hospital] inpatient prospective payment system
IRF Inpatient rehabilitation facility
IQR Inpatient Quality Reporting
LAMCs Large area metropolitan counties
LOS Length of stay
LTC-DRG Long-term care diagnosis-related group
LTCH Long-term care hospital
LTCH QRP Long-Term Care Hospital Quality Reporting Program
MAC Medicare Administrative Contractor
MACRA Medicare Access and CHIP Reauthorization Act of 2015, Public 
Law 114-10
MAP Measure Application Partnership
MCC Major complication or comorbidity
MCE Medicare Code Editor
MCO Managed care organization
MDC Major diagnostic category
MDH Medicare-dependent, small rural hospital
MedPAC Medicare Payment Advisory Commission
MedPAR Medicare Provider Analysis and Review File
MEI Medicare Economic Index
MGCRB Medicare Geographic Classification Review Board
MIEA-TRHCA Medicare Improvements and Extension Act, Division B of 
the Tax Relief and Health Care Act of 2006, Public Law 109-432
MIPPA Medicare Improvements for Patients and Providers Act of 2008, 
Public Law 110-275
MMA Medicare Prescription Drug, Improvement, and Modernization Act 
of 2003, Public Law 108-173
MMEA Medicare and Medicaid Extenders Act of 2010, Public Law 111-309
MMSEA Medicare, Medicaid, and SCHIP Extension Act of 2007, Public 
Law 110-173
MRHFP Medicare Rural Hospital Flexibility Program
MRSA Methicillin-resistant Staphylococcus aureus
MSA Metropolitan Statistical Area
MS-DRG Medicare severity diagnosis-related group
MS-LTC-DRG Medicare severity long-term care diagnosis-related group
MU Meaningful Use [EHR Incentive Program]
NAICS North American Industrial Classification System
NALTH National Association of Long Term Hospitals
NCD National coverage determination
NCHS National Center for Health Statistics
NCQA National Committee for Quality Assurance
NCVHS National Committee on Vital and Health Statistics
NECMA New England County Metropolitan Areas
NHSN National Healthcare Safety Network
NQF National Quality Forum
NQS National Quality Strategy
NTIS National Technical Information Service
NTTAA National Technology Transfer and Advancement Act of 1991, 
Public Law 104-113
NUBC National Uniform Billing Code
NVHRI National Voluntary Hospital Reporting Initiative
OACT [CMS] Office of the Actuary
OBRA 86 Omnibus Budget Reconciliation Act of 1986, Public Law 99-509
OES Occupational employment statistics
OIG Office of the Inspector General
OMB [Executive] Office of Management and Budget
ONC Office of the National Coordinator for Health Information 
Technology
OPM [U.S.] Office of Personnel Management
OQR [Hospital] Outpatient Quality Reporting
O.R. Operating room
OSCAR Online Survey Certification and Reporting [System]
PAC Postacute care
PAMA Protecting Access to Medicare Act of 2014, Public Law 113-93
PCH PPS-exempt cancer hospital
PCHQR PPS-exempt cancer hospital quality reporting
PMSAs Primary metropolitan statistical areas
POA Present on admission
PPI Producer price index
PPS Prospective payment system
PRM Provider Reimbursement Manual
ProPAC Prospective Payment Assessment Commission
PRRB Provider Reimbursement Review Board
PRTFs Psychiatric residential treatment facilities
PSF Provider-Specific File
PSI Patient safety indicator
PS&R Provider Statistical and Reimbursement [System]
PQRS Physician Quality Reporting System
QIG Quality Improvement Group [CMS]
QRDA Quality Reporting Data Architecture
RFA Regulatory Flexibility Act, Public Law 96-354
RHC Rural health clinic
RHQDAPU Reporting hospital quality data for annual payment update
RNHCI Religious nonmedical health care institution
RPL Rehabilitation psychiatric long-term care (hospital)
RRC Rural referral center
RSMR Risk-standardized mortality rate
RSRR Risk-standard readmission rate
RTI Research Triangle Institute, International
RUCAs Rural-urban commuting area codes
RY Rate year
SAF Standard Analytic File
SCH Sole community hospital
SCHIP State Child Health Insurance Program
SCIP Surgical Care Improvement Project
SFY State fiscal year
SGR Sustainable Growth Rate
SIC Standard Industrial Classification
SNF Skilled nursing facility
SOCs Standard occupational classifications
SOM State Operations Manual
SSI Surgical site infection
SSI Supplemental Security Income
SSO Short-stay outlier
SUD Substance use disorder
TEFRA Tax Equity and Fiscal Responsibility Act of 1982, Public Law 
97-248
TEP Technical expert panel
THA/TKA Total hip arthroplasty/Total knee arthroplasty
TMA TMA [Transitional Medical Assistance], Abstinence Education, and 
QI [Qualifying Individuals] Programs Extension Act of 2007, Public 
Law 110-90
TPS Total Performance Score
UHDDS Uniform hospital discharge data set
UMRA Unfunded Mandate Reform Act, Public Law 104-4
VBP [Hospital] Value Based Purchasing [Program]
VTE Venous thromboembolism

Table of Contents

I. Executive Summary and Background
    A. Executive Summary
    1. Purpose and Legal Authority
    2. Summary of the Major Provisions
    3. Summary of Costs and Benefits
    B. Summary
    1. Acute Care Hospital Inpatient Prospective Payment System 
(IPPS)

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    2. Hospitals and Hospital Units Excluded From the IPPS
    3. Long-Term Care Hospital Prospective Payment System (LTCH PPS)
    4. Critical Access Hospitals (CAHs)
    5. Payments for Graduate Medical Education (GME)
    C. Summary of Provisions of Recent Legislation Discussed in This 
Final Rule and Interim Final Rule With Comment Period
    1. Patient Protection and Affordable Care Act (Pub. L. 111-148) 
and the Health Care and Education Reconciliation Act of 2010 (Pub. 
L. 111-152)
    2. American Taxpayer Relief Act of 2012 (Pub. L. 112-240)
    3. Pathway for Sustainable Growth Rate (SGR) Reform Act of 2013 
(Pub. L. 113-67)
    4. Protecting Access to Medicare Act of 2014 (Pub. L. 113-93)
    5. Improving Medicare Post-Acute Care Transformation Act of 2014
    6. Medicare Access and CHIP Reauthorization Act of 2015 (Pub. L. 
114-10)
    D. Issuance of a Notice of Proposed Rulemaking
    E. Public Comments Received in Response to the FY 2016 IPPS/LTCH 
PPS Proposed Rule
II. Changes to Medicare Severity Diagnosis-Related Group (MS-DRG) 
Classifications and Relative Weights
    A. Background
    B. MS-DRG Reclassifications
    C. Adoption of the MS-DRGs in FY 2008
    D. FY 2016 MS-DRG Documentation and Coding Adjustment
    1. Background on the Prospective MS-DRG Documentation and Coding 
Adjustments for FY 2008 and FY 2009 Authorized by Public Law 110-90
    2. Adjustment to the Average Standardized Amounts Required by 
Public Law 110-90
    a. Prospective Adjustment Required by Section 7(b)(1)(A) of 
Public Law 110-90
    b. Recoupment or Repayment Adjustments in FYs 2010 Through 2012 
Required by Section 7(b)(1)(B) Public Law 110-90
    3. Retrospective Evaluation of FY 2008 and FY 2009 Claims Data
    4. Prospective Adjustments for FY 2008 and FY 2009 Authorized by 
Section 7(b)(1)(A) of Public Law 110-90
    5. Recoupment or Repayment Adjustment Authorized by Section 
7(b)(1)(B) of Public Law 110-90
    6. Recoupment or Repayment Adjustment Authorized by Section 631 
of the American Taxpayer Relief Act of 2012 (ATRA)
    E. Refinement of the MS-DRG Relative Weight Calculation
    1. Background
    2. Discussion for FY 2016 and Summary of Public Comments 
Received in Response to Our Solicitation of Comments on Nonstandard 
Cost Center Codes
    F. Adjustment to MS-DRGs for Preventable Hospital-Acquired 
Conditions (HACs), Including Infections, for FY 2016
    1. Background
    2. HAC Selection
    3. Present on Admission (POA) Indicator Reporting
    4. HACs and POA Reporting in Preparation for Transition to ICD-
10-CM and ICD-10-PCS
    5. Changes to the HAC Program for FY 2016
    6. RTI Program Evaluation
    7. RTI Report on Evidence-Based Guidelines
    G. Changes to Specific MS-DRG Classifications
    1. Discussion of Changes to Coding System and Basis for MS-DRG 
Updates
    a. Conversion of MS-DRGs to the International Classification of 
Diseases, 10th Edition (ICD-10)
    b. Basis for FY 2016 MS-DRG Updates
    2. MDC 1 (Diseases and Disorders of the Nervous System): 
Endovascular Embolization (Coiling) Procedures
    3. MDC 5 (Diseases and Disorders of the Circulatory System)
    a. Adding Severity Levels to MS-DRGs 245 Through 251
    b. Percutaneous Intracardiac Procedures
    c. Zilver[supreg] PTX Drug-Eluting Peripheral Stent 
(ZPTX[supreg])
    d. Percutaneous Mitral Valve Repair System--Revision of ICD-10-
PCS Version 32 Logic
    e. Major Cardiovascular Procedures: Zenith[supreg] Fenestrated 
Abdominal Aortic Aneurysm (AAA) Endovascular Graft
    4. MDC 8 (Diseases and Disorders of the Musculoskeletal System 
and Connective Tissue)
    a. Revision of Hip or Knee Replacement: Revision of ICD-10 
Version 32 Logic
    b. Spinal Fusion
    5. MDC 14 (Pregnancy, Childbirth and the Puerperium): MS-DRG 775 
(Vaginal Delivery With Complicating Diagnosis)
    6. MDC 21 (Injuries, Poisoning and Toxic Effects of Drugs): 
CroFab Antivenin Drug
    7. MDC 22 (Burns): Additional Severity of Illness Level for MS-
DRG 927 (Extensive Burns or Full Thickness Burns With Mechanical 
Ventilation 96 + Hours With Skin Graft)
    8. Medicare Code Editor (MCE) Changes
    9. Changes to Surgical Hierarchies
    10. Changes to the MS-DRG Diagnosis Codes for FY 2016
    a. Major Complications or Comorbidities (MCCs) and Complications 
or Comorbidities (CCs) Severity Levels for FY 2016
    b. Coronary Atherosclerosis Due to Calcified Coronary Lesion
    c. Hydronephrosis
    11. Complications or Comorbidity (CC) Exclusions List for FY 
2016
    a. Background
    b. CC Exclusions List for FY 2016
    12. Review of Procedure Codes in MS-DRGs 981 Through 983, 984 
Through 986, and 987 Through 989
    a. Moving Procedure Codes From MS-DRGs 981 Through 983 or MS-
DRGs 987 Through 989 Into MDCs
    b. Reassignment of Procedures Among MS-DRGs 981 Through 983, 984 
Through 986, and 987 Through 989
    c. Adding Diagnosis or Procedure Codes to MDCs
    13. Changes to the ICD-9-CM Coding System in FY 2016
    a. ICD-10 Coordination and Maintenance Committee
    b. Code Freeze
    14. Other Policy Change: Recalled/Replaced Devices
    15. Out of Scope Public Comments
    H. Recalibration of the FY 2016 MS-DRG Relative Weights
    1. Data Sources for Developing the Relative Weights
    2. Methodology for Calculation of the Relative Weights
    3. Development of National Average CCRs
    4. Discussion and Acknowledgement of Public Comments Received on 
Expanding the Bundled Payments for Care Improvement (BPCI) 
Initiative
    a. Background
    b. Considerations for Potential Model Expansion
    I. Add-On Payments for New Services and Technologies
    1. Background
    2. Public Input Before Publication of a Notice of Proposed 
Rulemaking on Add-On Payments
    3. Implementation of ICD-10-PCS Section ``X'' Codes for Certain 
New Medical Services and Technologies for FY 2016
    4. FY 2016 Status of Technologies Approved for FY 2015 Add-On 
Payments
    a. Glucarpidase (Voraxaze[supreg])
    b. Zenith[supreg] Fenestrated Abdominal Aortic Aneurysm (AAA) 
Endovascular Graft
    c. KcentraTM
    d. Argus[supreg] II Retinal Prosthesis System
    e. Zilver[supreg]PTX[supreg] Drug-Eluting Peripheral Stent
    f. CardioMEMSTM HF (Heart Failure) Monitoring System
    g. MitraClip[supreg] System
    h. Responsive Neurostimulator (RNS[supreg] System)
    5. FY 2016 Applications for New Technology Add-On Payments
    a. Blinatumomab (BLINCYTOTM)
    b. DIAMONDBACK[supreg] 360 Coronary Orbital Atherectomy System
    c. CRESEMBA[supreg] (Isavuconazonium)
    d. LUTONIX[supreg] Drug Coated Balloon (DCB) Percutaneous 
Transluminal Angioplasty (PTA) and 
IN.PACTTMAdmiralTM Pacliaxel Coated 
Percutaneous Transluminal Angioplasty (PTA) Balloon Catheter
    e. VERASENSETM Knee Balancer System (VKS)
    f. WATCHMAN[supreg] Left Atrial Appendage Closure Technology
III. Changes to the Hospital Wage Index for Acute Care Hospitals
    A. Background
    1. Legislative Authority
    2. Core-Based Statistical Areas (CBSAs) for the Hospital Wage 
Index
    B. Worksheet S-3 Wage Data for the FY 2016 Wage Index
    1. Included Categories of Costs
    2. Excluded Categories of Costs
    3. Use of Wage Index Data by Suppliers and Providers Other Than 
Acute Care Hospitals Under the IPPS
    C. Verification of Worksheet S-3 Wage Data

[[Page 49330]]

    D. Method for Computing the FY 2016 Unadjusted Wage Index
    E. Occupational Mix Adjustment to the FY 2016 Wage Index
    1. Development of Data for the FY 2016 Occupational Mix 
Adjustment Based on the 2013 Medicare Wage Index Occupational Mix 
Survey
    2. New 2013 Occupational Mix Survey Data for the FY 2016 Wage 
Index
    3. Calculation of the Occupational Mix Adjustment for FY 2016
    F. Analysis and Implementation of the Occupational Mix 
Adjustment and the FY 2016 Occupational Mix Adjusted Wage Index
    G. Transitional Wage Indexes
    1. Background
    2. Transition for Hospitals in Urban Areas That Became Rural
    3. Transition for Hospitals Deemed Urban Under Section 
1886(d)(8)(B) of the Act Where the Urban Area Became Rural Under the 
New OMB Delineations
    4. Expiring Transition for Hospitals That Experience a Decrease 
in Wage Index Under the New OMB Delineations
    5. Budget Neutrality
    H. Application of the Rural, Imputed, and Frontier Floors
    1. Rural Floor
    2. Imputed Floor for FY 2016
    3. State Frontier Floor
    I. FY 2016 Wage Index Tables
    J. Revisions to the Wage Index Based on Hospital Redesignations 
and Reclassifications
    1. General Policies and Effects of Reclassification and 
Redesignation
    2. FY 2016 MGCRB Reclassifications and Redesignation Issues
    a. FY 2016 Reclassification Requests and Approvals
    b. Applications for Reclassifications for FY 2017
    3. Redesignations of Hospitals Under Section 1886(d)(8)(B) of 
the Act (Lugar)
    4. Waiving Lugar Redesignation for the Out-Migration Adjustment
    K. Out-Migration Adjustment Based on Commuting Patterns of 
Hospital Employees
    1. Background
    2. New Data Source for the FY 2016 Out-Migration Adjustment
    3. FY 2016 Out-Migration Adjustment
    4. Use of Out-Migration Data Applied for FY 2014 or FY 2015 for 
3 Years
    L. Process for Requests for Wage Index Data Corrections
    M. Labor-Related Share for the FY 2016 Wage Index
    N. Changes to 3-Year Average for the FY 2017 Wage Index Pension 
Costs and Change to Wage Index Timeline Regarding Pension Costs for 
FY 2017 and Subsequent Years
    O. Clarification of Allocation of Pension Costs for the Wage 
Index
IV. Other Decisions and Changes to the IPPS for Operating Costs and 
Indirect Medical Education (IME) Costs
    A. Changes in the Inpatient Hospital Updates for FY 2016 
(Sec. Sec.  412.64(d) and 412.211(c))
    1. FY 2016 Inpatient Hospital Update
    2. FY 2016 Puerto Rico Hospital Update
    B. Rural Referral Centers (RRCs): Annual Updates to Case-Mix 
Index (CMI) and Discharge Criteria (Sec.  412.96)
    1. Case-Mix Index (CMI)
    2. Discharges
    C. Indirect Medical Education (IME) Payment Adjustment for FY 
2016 (Sec.  412.105)
    D. FY 2016 Payment Adjustment for Medicare Disproportionate 
Share Hospitals (DSHs) (Sec.  412.106)
    1. Background
    2. Impact on Medicare DSH Payment Adjustment of the Continued 
Implementation of New OMB Labor Market Area Delineations
    3. Payment Adjustment Methodology for Medicare Disproportionate 
Share Hospitals (DSHs) Under Section 3133 of the Affordable Care Act
    a. General Discussion
    b. Eligibility for Empirically Justified Medicare DSH Payments 
and Uncompensated Care Payments
    c. Empirically Justified Medicare DSH Payments
    d. Uncompensated Care Payments
    E. Hospital Readmissions Reduction Program: Changes for FY 2016 
Through FY 2017 (Sec. Sec.  412.150 Through 412.154)
    1. Statutory Basis for the Hospital Readmissions Reduction 
Program
    2. Regulatory Background
    3. Overview of Policies Changes for the FY 2016 and FY 2017 
Hospital Readmissions Reduction Program
    4. Refinement of Hospital 30-Day, All Cause, Risk-Standardized 
Readmission Rate (RSSR) Following Pneumonia Hospitalization Measure 
Cohort (NQF #0506) for FY 2017 Payment Determination and Subsequent 
Years
    a. Background
    b. Overview of Measure Cohort Change
    c. Risk Adjustment
    d. Anticipated Effect of Refinement of Hospital 30-Day, All-
Cause, Risk-Standardized Readmission Rate (RSSR) Following Pneumonia 
Hospitalization Measure (NQF #0506) Cohort
    e. Calculating the Excess Readmissions Ratio
    5. Maintenance of Technical Specifications for Quality Measures
    6. Floor Adjustment Factor for FY 2016 (Sec.  412.154(c)(2))
    7. Applicable Period for FY 2016
    8. Calculation of Aggregate Payments for Excess Readmissions for 
FY 2016
    a. Background
    b. Calculation of Aggregate Payments
    9. Extraordinary Circumstances Exception Policy for the Hospital 
Readmissions Reduction Program Beginning FY 2016 and for Subsequent 
Years
    a. Background
    b. Requests for an Extraordinary Circumstances Exception
    F. Hospital Value-Based Purchasing (VBP) Program: Policy Changes 
for the FY 2018 Program Year and Subsequent Years
    1. Background
    a. Statutory Background and Overview of Past Program Years
    b. FY 2016 Program Year Payment Details
    2. Retention, Removal, Expansion, and Updating of Quality 
Measures for FY 2018 Program Year
    a. Retention of Previously Adopted Hospital VBP Program Measures 
for the FY 2018 Program Year
    b. Removal of Two Measures
    c. New Measure for the FY 2018 Program Year: 3-Item Care 
Transition Measure (CTM-3) (NQF #0228)
    d. Removal of Clinical Care--Process Subdomain for the FY 2018 
Program Year and Subsequent Years
    e. NHSN Measures Standard Population Data
    f. Summary of Previously Adopted and New Measures for the FY 
2018 Program Year
    3. Previously Adopted and New Measures for the FY 2019, FY 2021, 
and Subsequent Program Years
    a. Intent To Propose in Future Rulemaking To Include Selected 
Ward (Non-Intensive Care Unit (ICU)) Locations in Certain NHSN 
Measures Beginning With the FY 2019 Program Year
    b. New Measure for the FY 2021 Program Year: Hospital 30-Day, 
All-Cause, Risk-Standardized Mortality Rate Following Chronic 
Obstructive Pulmonary Disease (COPD) Hospitalization (NQF #1893)
    c. Summary of Previously Adopted and New Measures for the FY 
2019 and FY 2021 and Subsequent Program Years
    4. Possible Measure Topics for Future Program Years
    5. Previously Adopted and New Baseline and Performance Periods 
for the FY 2018 Program Year
    a. Background
    b. Baseline and Performance Periods for the Patient and 
Caregiver-Centered Experience of Care/Care Coordination Domain for 
the FY 2018 Program Year
    c. Baseline and Performance Periods for NHSN Measures and PC-01 
in the Safety Domain for the FY 2018 Program Year
    d. Baseline and Performance Periods for the Efficiency and Cost 
Reduction Domain for the FY 2018 Program Year
    e. Summary of Previously Finalized and New Baseline and 
Performance Periods for the FY 2018 Program Year
    6. Previously Adopted and New Baseline and Performance Periods 
for Future Program Years
    a. Previously Adopted Baseline and Performance Periods for the 
FY 2019 Program
    b. Baseline and Performance Periods for the PSI-90 Measure in 
the Safety Domain in the FY 2020 Program Years
    c. Baseline and Performance Periods for the Clinical Care Domain 
for the FY 2021 Program Year
    7. Performance Standards for the Hospital VBP Program
    a. Background
    b. Technical Updates
    c. Performance Standards for the FY 2018 Program Year
    d. Previously Adopted Performance Standards for Certain Measures 
for the FY 2019 Program Year
    e. Previously Adopted and New Performance Standards for Certain 
Measures for the FY 2020 Program Year

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    f. Performance Standards for Certain Measures for the FY 2021 
Program Year
    8. FY 2018 Program Year Scoring Methodology
    a. Domain Weighting for the FY 2018 Program Year for Hospitals 
That Receive a Score on All Domains
    b. Domain Weighting for the FY 2018 Program Year for Hospitals 
Receiving Scores on Fewer Than Four Domains
    G. Changes to the Hospital-Acquired Condition (HAC) Reduction 
Program
    1. Background
    2. Statutory Basis for the HAC Reduction Program
    3. Overview of Previous HAC Reduction Program Rulemaking
    4. Implementation of the HAC Reduction Program for FY 2016
    5. Changes for Implementation of the HAC Reduction Program for 
FY 2017
    a. Applicable Time Period for the FY 2017 HAC Reduction Program
    b. Narrative Rule Used in Calculation of the Domain 2 Score for 
the FY 2017 HAC Reduction Program
    c. Domain 1 and Domain 2 Weights for the FY 2017 HAC Reduction 
Program
    6. Measure Refinements for the FY 2018 HAC Reduction Program
    a. Inclusion of Select Ward (Non-Intensive Care Unit (ICU)) 
Locations in Certain CDC NHSN Measures Beginning in the FY 2018 
Program Year
    b. Update to CDC NHSN Measures Standard Population Data
    7. Maintenance of Technical Specifications for Quality Measures
    8. Extraordinary Circumstances Exception Policy for the HAC 
Reduction Program Beginning in FY 2016 and for Subsequent Years
    a. Background
    b. Requests for an Extraordinary Circumstances Exception
    H. Simplified Cost Allocation Methodology
    1. Background
    2. Proposed Regulatory Changes
    3. Summary of Public Comments, Our Responses, and Final Policy
    I. Rural Community Hospital Demonstration Program
    1. Background
    2. FY 2016 Budget Neutrality Offset Amount
    J. Changes to MS-DRGs Subject to the Postacute Care Transfer 
Policy (Sec.  412.4)
    1. Background
    2. Changes to the Postacute Care Transfer MS-DRGs
    K. Short Inpatient Hospital Stays
    L. Interim Final Rule With Comment Period Implementing 
Legislative Extensions Relating to the Payment Adjustment for Low-
Volume Hospitals and the Medicare-Dependent, Small Rural Hospital 
(MDH) Program
    1. Recent Legislation
    2. Payment Adjustment for Low-Volume Hospitals (Sec.  412.101)
    a. Background
    b. Implementation of Provisions of the MACRA for FY 2015
    c. Low-Volume Hospital Definition and Payment Adjustment for FY 
2016
    3. Medicare-Dependent, Small Rural Hospital (MDH) Program (Sec.  
412.108)
    a. Background for MDH Program
    b. MACRA Provisions for Extension of the MDH Program
    4. Response to Comments
    5. Waiver of Notice of Proposed Rulemaking and Delay in 
Effective Date
    6. Collection of Information Requirements
    7. Impact of Legislative Changes
V. Changes to the IPPS for Capital-Related Costs
A. Overview
B. Additional Provisions
1. Exception Payments
2. New Hospitals
3. Hospitals Located in Puerto Rico
C. Annual Update for FY 2016
VI. Changes for Hospitals Excluded from the IPPS
    A. Rate-of-Increase in Payments To Excluded Hospitals for FY 
2016
    B. Report of Adjustment (Exceptions) Payments
    C. Out of Scope Comments Relating to Critical Access Hospitals 
(CAHs) Inpatient Services
VII. Changes to the Long-Term Care Hospital Prospective Payment 
System (LTCH PPS) for FY 2016
    A. Background of the LTCH PPS
    1. Legislative and Regulatory Authority
    2. Criteria for Classification as an LTCH
    a. Classification as an LTCH
    b. Hospitals Excluded From the LTCH PPS
    3. Limitation on Charges to Beneficiaries
    4. Administrative Simplification Compliance Act (ASCA) and 
Health Insurance Portability and Accountability Act (HIPAA) 
Compliance
    B. Application of Site Neutral Payment Rate (New Sec.  412.522)
    1. Overview
    2. Application of the Site Neutral Payment Rate Under the LTCH 
PPS
    3. Criteria for Exclusion from the Site Neutral Payment Rate
    a. Statutory Provisions
    b. Implementation of Criterion for a Principal Diagnosis 
Relating to a Psychiatric Diagnosis or to Rehabilitation
    c. Addition of Definition of ``Subsection (d) Hospital'' to LTCH 
Regulations
    d. Interpretation of ``Immediately Preceded'' by a Subsection 
(d) Hospital Discharge
    e. Implementation of Intensive Care Unit (ICU) Criterion
    f. Implementation of the Ventilator Criterion
    4. Determination of the Site Neutral Payment Rate (Proposed New 
Sec.  412.522(c))
    a. General
    b. Blended Payment Rate for FY 2016 and FY 2017
    c. LTCH PPS Standard Federal Payment Rate
    5. Application of Certain Exiting LTCH PPS Payment Adjustments 
to Payments Made Under the Site Neutral Payment Rate
    6. LTCH Discharge Payment Percentage
    7. Additional LTCH PPS Policy Considerations Related to the 
Implementation of the Site Neutral Payment Rate Required by Section 
1206(a) of Public Law 113-67
    a. MS-LTC-DRG Relative Payment Weights
    b. High-Cost Outliers
    c. Limitation on Charges to Beneficiaries
    C. Medicare Severity Long-Term Care Diagnosis-Related Group (MS-
LTC-DRG) Classifications and Relative Weights for FY 2016
    1. Background
    2. Patient Classifications into MS-LTC-DRGs
    a. Background
    b. Changes to the MS-LTC-DRGs for FY 2016
    3. Development of the FY 2016 MS-LTC-DRG Relative Weights
    a. General Overview of the Development of the MS-LTC-DRG 
Relative Weights
    b. Development of the MS-LTC-DRG Relative Weights for FY 2016
    c. Data
    d. Hospital-Specific Relative Value (HSRV) Methodology
    e. Treatment of Severity Levels in Developing the MS-LTC-DRG 
Relative Weights
    f. Low-Volume MS-LTC-DRGs
    g. Steps for Determining the Proposed FY 2016 MS-LTC-DRG 
Relative Weights
    D. Changes to the LTCH PPS Standard Payment Rates for FY 2016
    1. Overview of Development of the LTCH PPS Standard Federal 
Payment Rates
    2. FY 2016 LTCH PPS Annual Market Basket Update
    a. Overview
    b. Revision of Certain Market Basket Updates as Required by the 
Affordable Care Act
    c. Adjustment to the Annual Update to the LTCH PPS Standard 
Federal Rate Under the Long-Term Care Hospital Quality Reporting 
Program (LTCH QRP)
    d. Market Basket Under the LTCH PPS for FY 2016
    e. Annual Market Basket Update for LTCHs for FY 2016
    E. Moratoria on the Establishment of LTCHs and LTCH Satellite 
Facilities and on the Increase in Number of Beds in Existing LTCHs 
and LTCH Satellite Facilities
    F. Changes to Average Length of Stay Criterion Under Public Law 
113-67 (Sec.  412.23)
VIII. Quality Data Reporting Requirements for Specific Providers and 
Suppliers for FY 2016
    A. Hospital Inpatient Quality Reporting (IQR) Program
    1. Background
    a. History of the Hospital IQR Program
    b. Maintenance of Technical Specifications for Quality Measures
    c. Public Display of Quality Measures
    2. Process for Retaining Previously Adopted Hospital IQR Program 
Measures for Subsequent Payment Determinations
    3. Removal and Suspension of Hospital IQR Program Measures
    a. Considerations in Removing Quality Measures From the Hospital 
IQR Program
    b. Removal of Hospital IQR Program Measures for the FY 2018 
Payment Determination and Subsequent Years

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    4. Previously Adopted Hospital IQR Program Measures for the FY 
2017 Payment Determination and Subsequent Years
    a. Background
    b. NHSN Measures Standard Population Data
    5. Expansion and Updating of Quality Measures
    6. Refinements of Existing Measures in the Hospital IQR Program
    a. Refinement of Hospital 30-Day, All-Cause, Risk-Standardized 
Mortality Rate (RSMR) Following Pneumonia Hospitalization (NQF 
#0468) Measure Cohort
    b. Refinement of Hospital 30-Day, All-Cause, Risk-Standardized 
Readmission Rate (RSRR) Following Pneumonia Hospitalization (NQF 
#0468) Measure Cohort
    7. Additional Hospital IQR Program Measures for the FY 2018 and 
FY 2019 Payment Determinations and Subsequent Years
    a. Hospital Survey on Patient Safety Culture
    b. Clinical Episode-Based Payment Measures
    c. Hospital-Level, Risk-Standardized Payment Associated With a 
90-Day Episode-of-Care for Elective Primary Total Hip Arthroplasty 
(THA) and/or Total Knee Arthroplasty (TKA)
    d. Excess Days in Acute Care After Hospitalization for Acute 
Myocardial Infarction
    e. Excess Days in Acute Care After Hospitalization for Heart 
Failure
    f. Summary of Previously Adopted and New Hospital IQR Program 
Measure Set for the FY 2018 and FY 2019 Payment Determinations and 
Subsequent Years
    8. Electronic Clinical Quality Measures
    a. Previously Adopted Voluntarily Reported Electronic Clinical 
Quality Measures for the FY 2017 Payment Determination
    b. Clarification of the Venous Thromboembolism (VTE) Prophylaxis 
(STK--01) Measure (NQF #0434)
    c. Requirements for Hospitals To Report Electronic Clinical 
Quality Measures for the FY 2018 Payment Determination and 
Subsequent Years
    9. Future Considerations for Electronically Specified Measures: 
Consideration To Implement a New Type of Measure That Utilizes Core 
Clinical Data Elements
    a. Background
    b. Overview of Core Clinical Data Elements
    c. Core Clinical Data Elements Development
    d. Core Clinical Data Elements Feasibility Testing Using 
Readmission and Mortality Models
    e. Use of Core Clinical Data Elements in Hospital Quality 
Measures for the Hospital IQR Program
    f. Content Exchange Standard Considerations for Core Clinical 
Data Elements
    10. Form, Manner, and Timing of Quality Data Submission
    a. Background
    b. Procedural Requirements for the FY 2018 Payment Determination 
and Subsequent Years
    c. Data Submission Requirements for Chart-Abstracted Measures
    d. Alignment of the Medicare EHR Incentive Program Reporting for 
Eligible Hospitals and CAHs With the Hospital IQR Program
    e. Sampling and Case Thresholds for the FY 2018 Payment 
Determination and Subsequent Years
    f. HCAHPS Requirements for the FY 2018 Payment Determination and 
Subsequent Years
    g. Data Submission Requirements for Structural Measures for the 
FY 2018 Payment Determination and Subsequent Years
    h. Data Submission and Reporting Requirements for Healthcare-
Associated Infection (HAI) Measures Reported via NHSN
    11. Modifications to the Existing Processes for Validation of 
Hospital IQR Program Data
    a. Background
    b. Modifications to the Existing Processes for Validation of 
Chart-Abstracted Hospital IQR Program Data
    12. Data Accuracy and Completeness Acknowledgement Requirements 
for the FY 2018 Payment Determination and Subsequent Years
    13. Public Display Requirements for the FY 2018 Payment 
Determination and Subsequent Years
    14. Reconsideration and Appeal Procedures for the FY 2018 
Payment Determination and Subsequent Years
    15. Hospital IQR Program Extraordinary Circumstances Extensions 
or Exemptions
    B. PPS-Exempt Cancer Hospital Quality Reporting (PCHQR) Program
    1. Statutory Authority
    2. Removal of Six Surgical Care Improvement Project (SCIP) 
Measures From the PCHQR Program Beginning With Fourth Quarter (Q4) 
2015 Discharges and for Subsequent Years
    3. New Quality Measures Beginning With the FY 2018 Program
    a. Considerations in the Selection of Quality Measures
    b. Summary of New Measures
    c. CDC NHSN Facility-Wide Inpatient Hospital-Onset Clostridium 
Difficile (C. difficile) Infection (CDI) Outcome Measure (NQF #1717)
    d. CDC NHSN Facility-Wide Inpatient Hospital-Onset Methicillin-
Resistant Staphylococcus Aureus (MSRA) Bacteremia Outcome Measure 
(NQF #1716)
    e. CDC NHSN Influenza Vaccination Coverage Among Healthcare 
Personnel (HCP) Measure (NQF #0431) (CDC NHSN HCP Measure)
    4. Possible New Quality Measure Topics for Future Years
    5. Maintenance of Technical Specifications for Quality Measures
    6. Public Display Requirements
    a. Background
    b. Additional Public Display Requirements
    7. Form, Manner, and Timing of Data Submission
    a. Background
    b. Reporting Requirements for the Proposed New Measures: CDC 
NHSN CDI (NQF #1717), CDC NHSN MRSA (NQF #1716), and CDC NHSN HCP 
(NQF #0431) Measures
    C. Long-Term Care Hospital Quality Reporting Program (LTCH QRP)
    1. Background and Statutory Authority
    2. General Considerations Used for Selection, Resource Use, and 
Other Quality Measures for the LTCH QRP
    3. Policy for Retention of LTCH QRP Measures Adopted for 
Previous Payment Determinations
    4. Policy for Adopting Changes to LTCH QRP Measures
    5. Previously Adopted Quality Measures
    a. Previously Adopted Quality Measures for the FY 2015 and FY 
2016 Payment Determinations and Subsequent Years
    b. Previously Adopted Quality Measures for the FY 2017 and FY 
2018 Payment Determinations and Subsequent Years
    6. Previously Adopted LTCH QRP Quality Measures for the FY 2018 
Payment Determinations and Subsequent Years
    a. Policy to Reflect NQF Endorsement: All-Cause Unplanned 
Readmission Measure for 30 Days Post-Discharge From LTCHs (NQF 
#2512)
    b. Policy To Address the IMPACT Act of 2014: Quality Measure 
Addressing the Domain of Skin Integrity and Changes in Skin 
Integrity: Percent of Residents or Patients With Pressure Ulcers 
That Are New or Worsened (Short Stay) (NQF #0678)
    c. Policy To Address the IMPACT Act of 2014: Quality Measure 
Addressing the Domain of Incidence of Major Falls: Application of 
Percent of Residents Experiencing One or More Falls With Major 
Injury (Long Stay) (NQF #0674)
    d. Policy To Address the IMPACT Act of 2014: Quality Measure 
Addressing the Domain of Functional Status, Cognitive Function, and 
Changes in Function and Cognitive Function: Application of Percent 
of LTCH Patients With an Admission and Discharge Functional 
Assessment and a Care Plan That Addresses Function (NQF #2631; Under 
NQF review)
    7. LTCH QRP Quality Measures for the FY 2019 Payment 
Determination and Subsequent Years
    8. LTCH QRP Quality Measures and Concepts Under Consideration 
for Future Years
    9. Form, Manner, and Timing of Quality Data Submission for the 
FY 2016 Payment Determinations and Subsequent Years
    a. Background
    b. Timing for New LTCHs To Begin Reporting Data to CMS for the 
FY 2017 Payment Determinations and Subsequent Years
    c. Revisions to Previously Adopted Data Submission Timelines 
Under the LTCH QRP for the FY 2017 and FY 2018 Payment 
Determinations and Subsequent Years and Data Collection and Data 
Submission Timelines for Quality Measures in This Final Rule

[[Page 49333]]

    10. Previously Adopted LTCH QRP Data Completion Thresholds for 
the FY 2016 Payment Determination and Subsequent Years
    11. Future LTCH QRP Data Validation Process
    12. Public Display of Quality Measure Data for the LTCH QRP
    13. Previously Adopted and New LTCH QRP Reconsideration and 
Appeals Procedures for the FY 2017 Payment Determination and 
Subsequent Years
    14. Previously Adopted and New LTCH QRP Submission Exception and 
Extension Requirements for the FY 2017 Payment Determination and 
Subsequent Years
    D. Clinical Quality Measurement for Eligible Hospitals and 
Critical Access Hospitals (CAHs) Participating in the EHR Incentive 
Programs in 2016
    1. Background
    2. CQM Reporting for the Medicare and Medicaid EHR Incentive 
Programs in 2016
    a. Background
    b. CQM Reporting Period for the Medicare and Medicaid EHR 
Incentive Programs for CY 2016
    c. CQM Form and Method for the Medicare EHR Incentive Programs 
for 2016
    3. ``CQM--Report'' Certification Criterion in ONC's 2015 Edition 
Proposed Rule
    4. CQM Development and Certification Cycle
IX. MedPAC Recommendations
X. Other Required Information
    A. Requests for Data From the Public
    B. Collection of Information Requirements
    1. Statutory Requirement for Solicitation of Comments
    2. ICRs for Add-On Payments for New Services and Technologies
    3. ICRs for the Occupational Mix Adjustment to the FY 2016 Wage 
Index (Hospital Wage Index Occupational Mix Survey)
    4. Hospital Applications for Geographic Reclassifications by the 
MGCRB
    5. ICRs for the Hospital Inpatient Quality Reporting (IQR) 
Program
    6. ICRs for PPS-Exempt Cancer Hospital Quality Reporting (PCHQR) 
Program
    7. ICRs for Hospital Value-Based Purchasing (VBP) Program
    8. ICRs for the Long-Term Care Hospital Quality Reporting 
Program (LTCHQR)

Regulation Text

Addendum--Schedule of Standardized Amounts, Update Factors, and Rate-
of-Increase Percentages Effective With Cost Reporting Periods Beginning 
on or After October 1, 2015 and Payment Rates for LTCHs Effective With 
Discharges Occurring on or After October 1, 2015

I. Summary and Background
II. Changes to the Prospective Payment Rates for Hospital Inpatient 
Operating Costs for Acute Care Hospitals for FY 2016
    A. Calculation of the Adjusted Standardized Amount
    B. Adjustments for Area Wage Levels and Cost-of-Living
    C. MS-DRG Relative Weights
    D. Calculation of the Prospective Payment Rates
III. Changes to Payment Rates for Acute Care Hospital Inpatient 
Capital-Related Costs for FY 2016
    A. Determination of Federal Hospital Inpatient Capital-Related 
Prospective Payment Rate Update
    B. Calculation of the Inpatient Capital-Related Prospective 
Payments for FY 2016
    C. Capital Input Price Index
IV. Changes to Payment Rates for Excluded Hospitals: Rate-of-
Increase Percentages for FY 2016
V. Updates to the Payment Rates for the LTCH PPS for FY 2016
    A. LTCH PPS Standard Federal Payment Rate for FY 2016
    1. Background
    2. Development of the FY 2016 LTCH PPS Standard Federal Rate
    B. Adjustment for Area Wage Levels Under the LTCH PPS Standard 
Federal Payment Rate for FY 2016
    1. Background
    2. Geographic Classifications (Labor Market Areas) for the LTCH 
PPS Standard Federal Payment Rate
    3. Labor-Related Share for the LTCH PPS Standard Federal Payment 
Rate
    4. Wage Index for FY 2016 for the LTCH PPS Standard Federal 
Payment Rate
    5. Budget Neutrality Adjustment for Changes to the LTCH PPS 
Standard Federal Payment Rate Area Wage Level Adjustment
    C. LTCH PPS Cost-of-Living Adjustment (COLA) for LTCHs Located 
in Alaska and Hawaii
    D. Adjustment for LTCH PPS High-Cost Outlier (HCO) Cases
    1. Overview
    2. Determining LTCH CCRs Under the LTCH PPS
    3. High-Cost Outlier Payments for LTCH PPS Standard Federal 
Payment Rate Cases
    4. High-Cost Outlier Payments for Site Neutral Payment Rate 
Cases
    E. Update to the IPPS Comparable/Equivalent Amounts To Reflect 
the Statutory Changes To the IPPS DSH Payment Adjustment Methodology
    F. Computing the Adjusted LTCH PPS Federal Prospective Payments 
for FY 2016
VI. Tables Referenced in This Final Rule and Interim Final Rule With 
Comment Period and Available Through the Internet on the CMS Web 
site

Appendix A--Economic Analyses

I. Regulatory Impact Analysis
    A. Introduction
    B. Need
    C. Objectives of the IPPS
    D. Limitations of Our Analysis
    E. Hospitals Included in and Excluded From the IPPS
    F. Effects on Hospitals and Hospital Units Excluded From the 
IPPS
    G. Quantitative Effects of the Policy Changes Under the IPPS for 
Operating Costs
    1. Basis and Methodology of Estimates
    2. Analysis of Table I
    3. Impact Analysis of Table II
    H. Effects of Other Policy Changes
    1. Effects of Policy on MS-DRGs for Preventable HACs, Including 
Infections
    2. Effects of Policy Relating to New Medical Service and 
Technology Add-On Payments
    3. Effects of Changes in Medicare DSH Payments for FY 2016
    4. Effects of Reductions Under the Hospital Readmissions 
Reduction Program
    5. Effects of Changes Under the FY 2016 Hospital Value-Based 
Purchasing (VBP) Program
    6. Effects of Changes to the HAC Reduction Program for FY 2016
    7. Effects of Modification of the Simplified Cost Allocation 
Methodology
    8. Effects of Implementation of Rural Community Hospital 
Demonstration Program
    9. Effects of Changes to List of MS-DRGs Subject to Postacute 
Care Transfer and DRG Special Pay Policy
    I. Effects of Changes in the Capital IPPS
    1. General Considerations
    2. Results
    J. Effects of Payment Rate Changes and Policy Changes Under the 
LTCH PPS
    1. Introduction and General Considerations
    2. Impact on Rural Hospitals
    3. Anticipated Effects of LTCH PPS Payment Rate Changes and 
Policy Changes
    4. Effect on the Medicare Program
    5. Effect on Medicare Beneficiaries
    K. Effects of Requirements for Hospital Inpatient Quality 
Reporting (IQR) Program
    L. Effects of Requirements for the PPS-Exempt Cancer Hospital 
Quality Reporting (PCHQR) Program for FY 2016
    M. Effects of Requirements for the LTCH Quality Reporting 
Program (LTCH QRP) for FY 2016 Through FY 2020
    N. Effects of Changes to Clinical Quality Measurement for 
Eligible Hospitals and Critical Access Hospitals Participating in 
the EHR Incentive Programs in 2016
II. Alternatives Considered
III. Overall Conclusion
    A. Acute Care Hospitals
    B. LTCHs
IV. Accounting Statements and Tables
    A. Acute Care Hospitals
    B. LTCHs
V. Regulatory Flexibility Act (RFA) Analysis
VI. Impact on Small Rural Hospitals
VII. Unfunded Mandate Reform Act (UMRA) Analysis
VIII. Executive Order 12866

Appendix B: Recommendation of Update Factors for Operating Cost Rates 
of Payment for Inpatient Hospital Services

I. Background
II. Inpatient Hospital Updates for FY 2016
    A. FY 2016 Inpatient Hospital Update
    B. Update for SCHs and MDHs for FY 2016
    C. FY 2016 Puerto Rico Hospital Update
    D. Update for Hospitals Excluded From the IPPS for FY 2016
    E. Update for LTCHs for FY 2016
III. Secretary's Recommendation

[[Page 49334]]

IV. MedPAC Recommendation for Assessing Payment Adequacy and 
Updating Payments in Traditional Medicare

I. Executive Summary and Background

A. Executive Summary

1. Purpose and Legal Authority
    This final rule makes payment and policy changes under the Medicare 
inpatient prospective payment systems (IPPS) for operating and capital-
related costs of acute care hospitals as well as for certain hospitals 
and hospital units excluded from the IPPS. In addition, it makes 
payment and policy changes for inpatient hospital services provided by 
long-term care hospitals (LTCHs) under the long-term care hospital 
prospective payment system (LTCH PPS). It also makes policy changes to 
programs associated with Medicare IPPS hospitals, IPPS-excluded 
hospitals, and LTCHs.
    This interim final rule with comment period implements the 
provisions of the Medicare Access and CHIP Reauthorization Act of 2015 
which extended the MDH Program and changes to the low-volume payment 
adjustment for hospitals through FY 2017.
    Under various statutory authorities, we are making changes to the 
Medicare IPPS, to the LTCH PPS, and to other related payment 
methodologies and programs for FY 2016 and subsequent fiscal years. 
These statutory authorities include, but are not limited to, the 
following:
     Section 1886(d) of the Social Security Act (the Act), 
which sets forth a system of payment for the operating costs of acute 
care hospital inpatient stays under Medicare Part A (Hospital 
Insurance) based on prospectively set rates. Section 1886(g) of the Act 
requires that, instead of paying for capital-related costs of inpatient 
hospital services on a reasonable cost basis, the Secretary use a 
prospective payment system (PPS).
     Section 1886(d)(1)(B) of the Act, which specifies that 
certain hospitals and hospital units are excluded from the IPPS. These 
hospitals and units are: Rehabilitation hospitals and units; LTCHs; 
psychiatric hospitals and units; children's hospitals; cancer 
hospitals; and short-term acute care hospitals located in the Virgin 
Islands, Guam, the Northern Mariana Islands, and American Samoa. 
Religious nonmedical health care institutions (RNHCIs) are also 
excluded from the IPPS.
     Sections 123(a) and (c) of Public Law 106-113 and section 
307(b)(1) of Public Law 106-554 (as codified under section 1886(m)(1) 
of the Act), which provide for the development and implementation of a 
prospective payment system for payment for inpatient hospital services 
of long-term care hospitals (LTCHs) described in section 
1886(d)(1)(B)(iv) of the Act.
     Sections 1814(l), 1820, and 1834(g) of the Act, which 
specify that payments are made to critical access hospitals (CAHs) 
(that is, rural hospitals or facilities that meet certain statutory 
requirements) for inpatient and outpatient services and that these 
payments are generally based on 101 percent of reasonable cost.
     Section 1866(k) of the Act, as added by section 3005 of 
the Affordable Care Act, which establishes a quality reporting program 
for hospitals described in section 1886(d)(1)(B)(v) of the Act, 
referred to as ``PPS-Exempt Cancer Hospitals.''
     Section 1886(d)(4)(D) of the Act, which addresses certain 
hospital-acquired conditions (HACs), including infections. Section 
1886(d)(4)(D) of the Act specifies that, by October 1, 2007, the 
Secretary was required to select, in consultation with the Centers for 
Disease Control and Prevention (CDC), at least two conditions that: (a) 
Are high cost, high volume, or both; (b) are assigned to a higher 
paying MS-DRG when present as a secondary diagnosis (that is, 
conditions under the MS-DRG system that are complications or 
comorbidities (CCs) or major complications or comorbidities (MCCs); and 
(c) could reasonably have been prevented through the application of 
evidence-based guidelines. Section 1886(d)(4)(D) of the Act also 
specifies that the list of conditions may be revised, again in 
consultation with CDC, from time to time as long as the list contains 
at least two conditions. Section 1886(d)(4)(D)(iii) of the Act requires 
that hospitals, effective with discharges occurring on or after October 
1, 2007, submit information on Medicare claims specifying whether 
diagnoses were present on admission (POA). Section 1886(d)(4)(D)(i) of 
the Act specifies that effective for discharges occurring on or after 
October 1, 2008, Medicare no longer assigns an inpatient hospital 
discharge to a higher paying MS-DRG if a selected condition is not POA.
     Section 1886(a)(4) of the Act, which specifies that costs 
of approved educational activities are excluded from the operating 
costs of inpatient hospital services. Hospitals with approved graduate 
medical education (GME) programs are paid for the direct costs of GME 
in accordance with section 1886(h) of the Act. A payment for indirect 
medical education (IME) is made under section 1886(d)(5)(B) of the Act.
     Section 1886(b)(3)(B)(viii) of the Act, which requires the 
Secretary to reduce the applicable percentage increase in payments to a 
subsection (d) hospital for a fiscal year if the hospital does not 
submit data on measures in a form and manner, and at a time, specified 
by the Secretary.
     Section 1886(o) of the Act, which requires the Secretary 
to establish a Hospital Value-Based Purchasing (VBP) Program under 
which value-based incentive payments are made in a fiscal year to 
hospitals meeting performance standards established for a performance 
period for such fiscal year.
     Section 1886(p) of the Act, as added by section 3008 of 
the Affordable Care Act, which establishes an adjustment to hospital 
payments for hospital-acquired conditions (HACs), or a Hospital-
Acquired Condition (HAC) Reduction Program, under which payments to 
applicable hospitals are adjusted to provide an incentive to reduce 
hospital-acquired conditions.
     Section 1886(q) of the Act, as added by section 3025 of 
the Affordable Care Act and amended by section 10309 of the Affordable 
Care Act, which establishes the ``Hospital Readmissions Reduction 
Program'' effective for discharges from an ``applicable hospital'' 
beginning on or after October 1, 2012, under which payments to those 
hospitals under section 1886(d) of the Act will be reduced to account 
for certain excess readmissions.
     Section 1886(r) of the Act, as added by section 3133 of 
the Affordable Care Act, which provides for a reduction to 
disproportionate share hospital payments under section 1886(d)(5)(F) of 
the Act and for a new uncompensated care payment to eligible hospitals. 
Specifically, section 1886(r) of the Act requires that, for fiscal year 
2014 and each subsequent fiscal year, subsection (d) hospitals that 
would otherwise receive a disproportionate share hospital payment made 
under section 1886(d)(5)(F) of the Act will receive two separate 
payments: (1) 25 percent of the amount they previously would have 
received under section 1886(d)(5)(F) of the Act for DSH (``the 
empirically justified amount''), and (2) an additional payment for the 
DSH hospital's proportion of uncompensated care, determined as the 
product of three factors. These three factors are: (1) 75 percent of 
the payments that would otherwise be made under section 1886(d)(5)(F) 
of the Act; (2) 1 minus the percent change in the percent of 
individuals under the age of 65 who are uninsured (minus 0.1 percentage 
points for FY 2014, and minus 0.2 percentage points for FY 2015 through 
FY 2017);

[[Page 49335]]

and (3) a hospital's uncompensated care amount relative to the 
uncompensated care amount of all DSH hospitals expressed as a 
percentage.
     Section 1886(m)(6) of the Act, as added by section 
1206(a)(1) of the Pathway for SGR Reform Act of 2013 (Pub. L. 113-67), 
which provided for the establishment of site neutral payment rate 
criteria under the LTCH PPS with implementation beginning in FY 2016.
     Section 1206(b)(1) of the Pathway for SGR Reform Act of 
2013, which further amended section 114(c) of the MMSEA, as amended by 
section 4302(a) of the ARRA and sections 3106(c) and 10312(a) of the 
Affordable Care Act, by retroactively reestablishing and extending the 
statutory moratorium on the full implementation of the 25-percent 
threshold payment adjustment policy under the LTCH PPS so that the 
policy will be in effect for 9 years (except for ``grandfathered'' 
hospital-within-hospitals (HwHs), which are permanently exempt from 
this policy); and section 1206(b)(2) (as amended by section 112(b) of 
Pub. L. 113-93), which together further amended section 114(d) of the 
MMSEA, as amended by section 4302(a) of the ARRA and sections 3106(c) 
and 10312(a) of the Affordable Care Act to establish a new moratoria 
(subject to certain defined exceptions) on the development of new LTCHs 
and LTCH satellite facilities and a new moratorium on increases in the 
number of beds in existing LTCHs and LTCH satellite facilities 
beginning January 1, 2015 and ending on September 30, 2017; and section 
1206(d), which instructs the Secretary to evaluate payments to LTCHs 
classified under section 1886(b)(1)(C)(iv)(II) of the Act and to adjust 
payment rates in FY 2015 or FY 2016 under the LTCH PPS, as appropriate, 
based upon the evaluation findings.
     Section 1886(m)(5)(D)(iv) of the Act, as added by section 
1206(c) of the Pathway for SGR Reform Act of 2013, which provides for 
the establishment, no later than October 1, 2015, of a functional 
status quality measure under the LTCH QRP for change in mobility among 
inpatients requiring ventilator support.
     Section 1899B of the Act, as added by the Improving 
Medicare Post-Acute Care Transformation Act of 2014 (the IMPACT Act of 
2014), which imposes new data reporting requirements for certain 
postacute care providers, including LTCHs.
     Section 1886(d)(12) of the Act, as amended by section 204 
of the Medicare Access and CHIP Reauthorization Act of 2015, which 
extended, through FY 2017, changes to the inpatient hospital payment 
adjustment for certain low-volume hospitals; and section 1886(d)(5)(G) 
of the Act, as amended by section 205 of the Medicare Access and CHIP 
Reauthorization Act of 2015, which extended, through FY 2017, the 
Medicare-dependent, small rural hospital (MDH) program.
2. Summary of the Major Provisions
a. MS-DRG Documentation and Coding Adjustment
    Section 631 of the American Taxpayer Relief Act (ATRA, Pub. L. 112-
240) amended section 7(b)(1)(B) of Public Law 110-90 to require the 
Secretary to make a recoupment adjustment to the standardized amount of 
Medicare payments to acute care hospitals to account for changes in MS-
DRG documentation and coding that do not reflect real changes in case-
mix, totaling $11 billion over a 4-year period of FYs 2014, 2015, 2016, 
and 2017. This adjustment represents the amount of the increase in 
aggregate payments as a result of not completing the prospective 
adjustment authorized under section 7(b)(1)(A) of Public Law 110-90 
until FY 2013. Prior to the ATRA, this amount could not have been 
recovered under Public Law 110-90.
    While our actuaries estimated that a -9.3 percent adjustment to the 
standardized amount would be necessary if CMS were to fully recover the 
$11 billion recoupment required by section 631 of the ATRA in one year, 
it is often our practice to delay or phase in rate adjustments over 
more than one year, in order to moderate the effects on rates in any 
one year. Therefore, consistent with the policies that we have adopted 
in many similar cases, we made a -0.8 percent recoupment adjustment to 
the standardized amount in FY 2014 and FY 2015. For FY 2016, we are 
making an additional -0.8 percent recoupment adjustment to the 
standardized amount.
b. Reduction of Hospital Payments for Excess Readmissions
    We are making changes in policies to the Hospital Readmissions 
Reduction Program, which is established under section 1886(q) of the 
Act, as added by section 3025 of the Affordable Care Act. The Hospital 
Readmissions Reduction Program requires a reduction to a hospital's 
base operating DRG payment to account for excess readmissions of 
selected applicable conditions. For FYs 2013 and 2014, these conditions 
are acute myocardial infarction, heart failure, and pneumonia. For FY 
2014, we established additional exclusions to the three existing 
readmission measures (that is, the excess readmission ratio) to account 
for additional planned readmissions. We also established additional 
readmissions measures, chronic obstructive pulmonary disease (COPD), 
and total hip arthroplasty and total knee arthroplasty (THA/TKA), to be 
used in the Hospital Readmissions Reduction Program for FY 2015 and 
future years. We expanded the readmissions measures for FY 2017 and 
future years by adding a measure of patients readmitted following 
coronary artery bypass graft (CABG) surgery.
    In this final rule, we are making a refinement to the pneumonia 
readmissions measure, which expands the measure cohort for the FY 2017 
payment determination and subsequent years. Specifically, we are 
finalizing a modified version of the expanded pneumonia cohort from 
what we had specified in the FY 2016 IPPS/LTCH PPS proposed rule such 
that the modified version includes patients with a principal discharge 
diagnosis of pneumonia or aspiration pneumonia, and patients with a 
principal discharge diagnosis of sepsis with a secondary diagnosis of 
pneumonia coded as present on admission. However, we are not including 
patients with a principal discharge diagnosis of respiratory failure or 
patients with a principal discharge diagnosis of sepsis if they are 
coded as having severe sepsis as we had previously proposed. In 
addition, we are adopting an extraordinary circumstance exception 
policy that will align with existing extraordinary circumstance 
exception policies for other IPPS quality reporting and payment 
programs and will allow hospitals that experience an extraordinary 
circumstance (such as a hurricane or flood) to request a waiver for use 
of data from the affected time period.
c. Hospital Value-Based Purchasing (VBP) Program
    Section 1886(o) of the Act requires the Secretary to establish a 
Hospital VBP Program under which value-based incentive payments are 
made in a fiscal year to hospitals based on their performance on 
measures established for a performance period for such fiscal year.
    For FY 2016, we are adopting one additional measure beginning with 
the FY 2018 program year and one measure beginning with the FY 2021 
program year. We also are removing two measures beginning with the FY 
2018 program year. In addition, we are moving one measure to the Safety 
domain and removing the Clinical Care--Process subdomain and renaming 
the Clinical Care--Outcomes subdomain

[[Page 49336]]

as the Clinical Care domain. Finally, we are signaling our intent to 
propose in future rulemaking to expand one measure and to update the 
standard population data we use to calculate several measures beginning 
with the FY 2019 program year.
d. Hospital-Acquired Condition (HAC) Reduction Program
    Section 1886(p) of the Act, as added under section 3008(a) of the 
Affordable Care Act, establishes an incentive to hospitals to reduce 
the incidence of hospital-acquired conditions by requiring the 
Secretary to make an adjustment to payments to applicable hospitals 
effective for discharges beginning on October 1, 2014 and for 
subsequent program years. This 1-percent payment reduction applies to a 
hospital whose ranking is in the top quartile (25 percent) of all 
applicable hospitals, relative to the national average, of conditions 
acquired during the applicable period and on all of the hospital's 
discharges for the specified fiscal year. The amount of payment shall 
be equal to 99 percent of the amount of payment that would otherwise 
apply to such discharges under section 1886(d) or 1814(b)(3) of the 
Act, as applicable.
    In this final rule, we are making three changes to existing 
Hospital-Acquired Condition Reduction Program policies: (1) An 
expansion to the population covered by the central line-associated 
bloodstream infection (CLABSI) and catheter-associated urinary tract 
infection (CAUTI) measures to include patients in select nonintensive 
care unit sites within a hospital; (2) an adjustment to the relative 
contribution of each domain to the Total HAC Score which is used to 
determine if a hospital will receive the payment adjustment; and (3) a 
policy that will align with existing extraordinary circumstance 
exception policies for other IPPS quality reporting and payment 
programs and will allow hospitals to request a waiver for use of data 
from the affected time period.
e. DSH Payment Adjustment and Additional Payment for Uncompensated Care
    Section 3133 of the Affordable Care Act modified the Medicare 
disproportionate share hospital (DSH) payment methodology beginning in 
FY 2014. Under section 1886(r) of the Act, which was added by section 
3133 of the Affordable Care Act, starting in FY 2014, DSHs will receive 
25 percent of the amount they previously would have received under the 
statutory formula for Medicare DSH payments in section 1886(d)(5)(F) of 
the Act. The remaining amount, equal to 75 percent of what otherwise 
would have been paid as Medicare DSH payments, will be paid as 
additional payments after the amount is reduced for changes in the 
percentage of individuals that are uninsured. Each Medicare DSH 
hospital will receive an additional payment based on its share of the 
total amount of uncompensated care for all Medicare DSH hospitals for a 
given time period.
    In this final rule, we are updating our estimates of the three 
factors used to determine uncompensated care payments for FY 2016. We 
are continuing to use the methodology we established in FY 2015 to 
calculate the uncompensated care payment amounts for merged hospitals 
such that we combine uncompensated care data for the hospitals that 
have undergone a merger in order to calculate their relative share of 
uncompensated care. We also are changing the time period of the data 
used to calculate the uncompensated care payment amounts to be 
distributed.
f. Changes to the LTCH PPS
    Under the current LTCH PPS, all discharges are paid under the LTCH 
PPS standard Federal payment rate. In this final rule, we are 
implementing section 1206 of the Pathway for SGR Reform Act, which 
requires the establishment of an alternative site neutral payment rate 
for Medicare discharges from an LTCH that fail to meet certain 
statutory defined criteria, beginning with LTCH discharges occurring in 
cost reporting periods beginning on or after October 1, 2015. We 
include provisions regarding the application of the site neutral 
payment rate and the criteria for exclusion from the site neutral 
payment rate, as well as provisions on a number of methodological and 
implementation issues, such as the criterion for a principal diagnosis 
relating to a psychiatric diagnosis or to rehabilitation, the intensive 
care unit (ICU) criterion, the ventilator criterion, the definition of 
``immediately preceded'' by a subsection (d) hospital discharge, 
limitation on beneficiary charges in the context of the new site 
neutral payment rate, and the transitional blended payment rate 
methodology for FY 2016 and FY 2017.
    In addition, we are making changes to address certain statutory 
requirements related to an LTCH's average length of stay criterion and 
discharge payment percentage. We also are providing technical 
clarifications relating to our FY 2015 implementation of the new 
statutory moratoria on the establishment of new LTCHs and LTCH 
satellite facilities (subject to certain defined exceptions) and on bed 
increases in existing LTCHs and LTCH satellite facilities as well as 
making a technical revision to the regulations to more clearly reflect 
our established policies.
g. Hospital Inpatient Quality Reporting (IQR) Program
    Under section 1886(b)(3)(B)(viii) of the Act, hospitals are 
required to report data on measures selected by the Secretary for the 
Hospital IQR Program in order to receive the full annual percentage 
increase in payments. In past years, we have established measures for 
reporting data and the process for submittal and validation of the 
data.
    In this final rule, we are updating considerations for measure 
removal and retention. In addition, we are removing nine chart-
abstracted measures for the FY 2018 payment determination and 
subsequent years: Six of these measures are ``topped-out'' (STK-01, 
STK-06, STK-08, VTE-1, VTE-2, and VTE-3) and two of the measures are 
suspended (IMM-1 and SCIP-Inf-4). However, we are retaining the 
electronic versions of five of the chart-abstracted measures finalized 
for removal.
    We are refining two previously adopted measures for the FY 2018 
payment determination and subsequent years. We are also adding seven 
new measures: Three new claims-based measures and one structural 
measure for the FY 2018 payment determination and subsequent years; and 
three new claims-based measures for the FY 2019 payment determination 
and subsequent years.
    Further, for the FY 2018 payment determination, we are requiring 
hospitals to report a minimum of 4 electronic clinical quality 
measures. Under this modification to our proposal, no NQS domain 
distribution will be required. We are requiring that hospitals submit 
one quarter of electronic clinical quality measure data from either Q3 
or Q4 of CY 2016 with a submission deadline of February 28, 2017. For 
the reporting of electronic clinical quality measures, hospitals may be 
certified either to the CEHRT 2014 or 2015 Edition, but must submit 
using the QRDA I format. We plan to finalize public reporting of 
electronic data in next year's rulemaking after the conclusion and 
assessment of the validation pilot. Six previously adopted measures 
(ED-1, ED-2, PC-01, STK-04, VTE-5, and VTE-6) must still be submitted 
via chart-abstraction regardless of whether they are also submitted as 
electronic clinical quality measures. We are also continuing our policy 
regarding STK-01 to clarify that

[[Page 49337]]

hospitals need not report the STK-01 measure as part of the STK measure 
set if reporting electronically, because no electronic specification 
existed for STK-01. Beginning with the FY 2018 payment determination, 
we are expanding our previously established extraordinary circumstances 
extensions/exemptions policy (79 FR 50277) to allow hospitals to 
utilize the existing Extraordinary Circumstances Exception (ECE) form 
to request exemptions based on hardships in reporting eCQMs.
    Finally, we are modifying the existing processes for validation of 
chart-abstracted Hospital IQR Program data to remove one stratum.
h. Long-Term Care Quality Reporting Program (LTCH QRP)
    Section 3004(a) of the Affordable Care Act amended section 
1886(m)(5) of the Act to require the Secretary to establish the Long-
Term Care Hospital Quality Reporting Program (LTCH QRP). This program 
applies to all hospitals certified by Medicare as LTCHs. Beginning with 
the FY 2014 payment determination and subsequent years, the Secretary 
is required to reduce any annual update to the standard Federal rate 
for discharges occurring during such fiscal year by 2 percentage points 
for any LTCH that does not comply with the requirements established by 
the Secretary.
    The IMPACT Act of 2014 amended the Act in ways that affect the LTCH 
QRP. Specifically, section 2(a) of the IMPACT Act of 2014 added section 
1899B of the Act, and section 2(c)(3) of the IMPACT Act of 2014 amended 
section 1886(m)(5) of the Act. Under section 1899B(a)(1) of the Act, 
the Secretary must require post-acute care (PAC) providers (defined in 
section 1899B(a)(2)(A) of the Act to include HHAs, SNFs, IRFs, and 
LTCHs) to submit standardized patient assessment data in accordance 
with section 1899B(b) of the Act, data on quality measures required 
under section 1899B(c)(1) of the Act, and data on resource use and 
other measures required under section 1899B(d)(1) of the Act. The Act 
also sets out specified application dates for each of the measures. The 
Secretary must specify the quality, resource use, and other measures 
not later than the applicable specified application date defined in 
section 1899B(a)(2)(E) of the Act.
    In this final rule, we are establishing three previously finalized 
quality measures: One measure establishes the newly NQF-endorsed status 
of that quality measure; two other measures are for the purpose of 
establishing the cross-setting use of the previously finalized quality 
measures, in order to satisfy the IMPACT Act of 2014 requirement of 
adopting quality measures under the domains of skin integrity and falls 
with major injury. We are adopting an application of a fourth 
previously finalized LTCH functional status measure in order to meet 
the requirement of the IMPACT Act of 2014 to adopt a cross-setting 
measure under the domain of functional status, such as self-care or 
mobility. All four measures effect the FY 2018 annual payment update 
determination and beyond.
    In addition, we will publicly report LTCH quality data beginning in 
fall 2016, on a CMS Web site, such as Hospital Compare. We will 
initially publicly report quality data on four quality measures.
    Finally, we are lengthening our quarterly data submission deadlines 
from 45 days to 135 days beyond the end of each calendar year quarter 
beginning with quarter four (4) 2015 quality data. We are making this 
change in order to align with other quality reporting programs, and to 
allow an appropriate amount of time for LTCHs to review and correct 
quality data prior to the public posting of that data.
3. Summary of Costs and Benefits
     Adjustment for MS-DRG Documentation and Coding Changes. We 
are making a -0.8 percent recoupment adjustment to the standardized 
amount for FY 2016 to implement, in part, the requirement of section 
631 of the ATRA that the Secretary make an adjustment totaling $11 
billion over a 4-year period of FYs 2014, 2015, 2016, and 2017. This 
recoupment adjustment represents the amount of the increase in 
aggregate payments as a result of not completing the prospective 
adjustment authorized under section 7(b)(1)(A) of Public Law 110-90 
until FY 2013. Prior to the ATRA, this amount could not have been 
recovered under Public Law 110-90.
    While our actuaries estimated that a -9.3 percent recoupment 
adjustment to the standardized amount would be necessary if CMS were to 
fully recover the $11 billion recoupment required by section 631 of the 
ATRA in FY 2014, it is often our practice to delay or phase in rate 
adjustments over more than one year, in order to moderate the effects 
on rates in any one year. Therefore, consistent with the policies that 
we have adopted in many similar cases and the adjustment we made for FY 
2014, we are making a -0.8 percent recoupment adjustment to the 
standardized amount in FY 2016. Taking into account the cumulative 
effects of this adjustment and the adjustments made in FYs 2014 and 
2015, we currently estimate that approximately $5 to $6 billion would 
be left to recover under section 631 of the ATRA by the end of FY 2016. 
We have not yet addressed the specific amount of the final adjustment 
required under section 631 of the ATRA for FY 2017. We intend to 
address this adjustment in the FY 2017 IPPS rulemaking. However, we 
note that section 414 of the MACRA (Pub. L. 114-10), enacted on April 
16, 2015, replaced the single positive adjustment we intended to make 
in FY 2018 with a 0.5 percent positive adjustment for each of FYs 2018 
through 2023. The provision under section 414 of the MACRA does not 
impact our FY 2016 recoupment adjustment, and we will address this 
MACRA provision in future rulemaking.
     Changes to the Hospital Readmissions Reduction Program. We 
are making a refinement to the pneumonia readmissions measure, which 
will expand the measure cohort for the FY 2017 payment determination 
and subsequent years. In addition, we are adopting an extraordinary 
circumstance exception policy that will align with existing 
extraordinary circumstance exception policies for other IPPS quality 
reporting and payment programs and will allow hospitals that experience 
an extraordinary circumstance (such as a hurricane or flood) to request 
a waiver for use of data from the affected time period. These changes 
will not significantly impact the program in FY 2016, but could impact 
future years, depending on actual experience.
    Overall, in this final rule, we estimate that 2,666 hospitals will 
have their base operating DRG payments reduced by their proxy FY 2016 
hospital-specific readmissions adjustment. As a result, we estimate 
that the Hospital Readmissions Reduction Program will save 
approximately $420 million in FY 2016, an increase of $6 million over 
the estimated FY 2015 savings.
     Value-Based Incentive Payments under the Hospital VBP 
Program. We estimate that there will be no net financial impact to the 
Hospital VBP Program for the FY 2016 program year in the aggregate 
because, by law, the amount available for value-based incentive 
payments under the program in a given year must be equal to the total 
amount of base operating MS-DRG payment amount reductions for that 
year, as estimated by the Secretary. The estimated amount of base 
operating MS-DRG payment amount reductions for the FY 2016 program year 
and, therefore, the estimated amount available for value-based 
incentive payments for FY

[[Page 49338]]

2016 discharges is approximately $1.5 billion.
     Changes to the HAC Reduction Program for FY 2016. We are 
making three changes to existing HAC Reduction Program policies: (1) An 
expansion to the population covered by the central line-associated 
bloodstream infection (CLABSI) and catheter-associated urinary tract 
infection (CAUTI) measures to include patients in select nonintensive 
care unit sites within a hospital; (2) an adjustment to the relative 
contribution of each domain to the Total HAC Score that is used to 
determine if a hospital will receive the payment adjustment; and (3) a 
policy that will align with existing extraordinary circumstance 
exception policies for other IPPS quality reporting and payment 
programs and will allow hospitals to request a waiver for use of data 
from the affected period. Hospitals in the top quartile of HAC scores 
will continue to have their HAC Reduction Program payment adjustment 
applied, as required by law. However, because a hospital's Total HAC 
score and its ranking in comparison to other hospitals in any given 
year depend on several different factors, any significant impact due to 
the HAC Reduction Program changes for FY 2016, including which 
hospitals receive the adjustment, will depend on actual experience.
     Medicare DSH Payment Adjustment and Additional Payment for 
Uncompensated Care. Under section 1886(r) of the Act (as added by 
section 3313 of the Affordable Care Act), disproportionate share 
hospital payments to hospitals under section 1886(d)(5)(F) of the Act 
are reduced and an additional payment for uncompensated care is made to 
eligible hospitals beginning in FY 2014. Hospitals that receive 
Medicare DSH payments will receive 25 percent of the amount they 
previously would have received under the current statutory formula for 
Medicare DSH payments in section 1886(d)(5)(F) of the Act. The 
remainder, equal to an estimate of 75 percent of what otherwise would 
have been paid as Medicare DSH payments, will be the basis for 
determining the additional payments for uncompensated care after the 
amount is reduced for changes in the percentage of individuals that are 
uninsured and additional statutory adjustments. Each hospital that 
receives Medicare DSH payments will receive an additional payment for 
uncompensated care based on its share of the total uncompensated care 
amount reported by Medicare DSHs. The reduction to Medicare DSH 
payments is not budget neutral.
    For FY 2016, we are providing that the 75 percent of what otherwise 
would have been paid for Medicare DSH is adjusted to approximately 
63.69 percent of the amount to reflect changes in the percentage of 
individuals that are uninsured and additional statutory adjustments. In 
other words, approximately 47.76 percent (the product of 75 percent and 
63.69 percent) of our estimate of Medicare DSH payments prior to the 
application of section 3133 of the Affordable Care Act is available to 
make additional payments to hospitals for their relative share of the 
total amount of uncompensated care. We project that Medicare DSH 
payments and additional payments for uncompensated care made for FY 
2016 will reduce payments overall by approximately 1 percent as 
compared to the Medicare DSH payments and uncompensated care payments 
distributed in FY 2015. The additional payments have redistributive 
effects based on a hospital's uncompensated care amount relative to the 
uncompensated care amount for all hospitals that are estimated to 
receive Medicare DSH payments, and the payment amount is not directly 
tied to a hospital's number of discharges.
     Implementation of Legislative Extensions Relating to the 
Payment Adjustment for Low-Volume Hospitals and the Medicare-Dependent, 
Small Rural Hospital Program. The Medicare Access and CHIP 
Reauthorization Act of 2015 (MACRA) (Pub. L. 114-10) extended certain 
provisions relating to the payment adjustment for low-volume hospitals 
under section 1886(d)(12) of the Act and extended the Medicare-
dependent, small rural hospital (MDH) Program. Section 204 of the MACRA 
extended the temporary changes to the low-volume hospital qualifying 
criteria and payment adjustment for IPPS hospital discharges occurring 
on or after April 1, 2015 through September 30, 2017. Section 205 of 
the MACRA extended the MDH program for IPPS hospital discharges 
occurring on or after April 1, 2015 through September 30, 2017. We 
project that IPPS payments for FY 2016 will increase by approximately 
$322 million as a result of the statutory extensions of certain 
provisions of the low-volume hospital payment adjustment and 
approximately $96 million for the MDH program compared to such payments 
in absence of these extensions.
     Update to the LTCH PPS Payment Rates and Other Payment 
Factors. Based on the best available data for the 419 LTCHs in our data 
base, we estimate that the changes to the payment rates and factors 
that we are presenting in the preamble and Addendum of this final rule, 
including the application of the new site neutral payment rate required 
by section 1886(m)(6)(A) of the Act, the update to the LTCH PPS 
standard Federal payment rate for FY 2016, and the changes to short-
stay outlier and high-cost outlier payments will result in an estimated 
decrease in payments from FY 2015 of approximately $250 million.
     Hospital Inpatient Quality Reporting (IQR) Program. In 
this final rule, we are removing nine measures for the FY 2018 payment 
determination and subsequent years. We are adding seven measures to the 
Hospital IQR Program for the payment determination; four for the FY 
2018 payment determination and subsequent years and three for FY 2019 
payment determination and subsequent years. We also are requiring 
hospitals to report 4 of the 28 Hospital IQR Program electronic 
clinical quality measures that align with the Medicare EHR Incentive 
Program. We estimate that our policies for the adoption and removal of 
measures will result in total hospital costs of $169 million across 
3,300 IPPS hospitals.
     Changes in LTCH Payments Related to the LTCH QRP 
Proposals. We believe that the increase in costs to LTCHs related to 
our LTCH QRP policies in this final rule is zero. We refer readers to 
sections VIII.C. of the preamble of this final rule for detailed 
discussion of the policies.

B. Summary

1. Acute Care Hospital Inpatient Prospective Payment System (IPPS)
    Section 1886(d) of the Social Security Act (the Act) sets forth a 
system of payment for the operating costs of acute care hospital 
inpatient stays under Medicare Part A (Hospital Insurance) based on 
prospectively set rates. Section 1886(g) of the Act requires the 
Secretary to use a prospective payment system (PPS) to pay for the 
capital-related costs of inpatient hospital services for these 
``subsection (d) hospitals.'' Under these PPSs, Medicare payment for 
hospital inpatient operating and capital-related costs is made at 
predetermined, specific rates for each hospital discharge. Discharges 
are classified according to a list of diagnosis-related groups (DRGs).
    The base payment rate is comprised of a standardized amount that is 
divided into a labor-related share and a nonlabor-related share. The 
labor-related share is adjusted by the wage index applicable to the 
area where the hospital is located. If the hospital is located in 
Alaska or Hawaii, the nonlabor-related share is adjusted by a cost-of-
living adjustment factor. This

[[Page 49339]]

base payment rate is multiplied by the DRG relative weight.
    If the hospital treats a high percentage of certain low-income 
patients, it receives a percentage add-on payment applied to the DRG-
adjusted base payment rate. This add-on payment, known as the 
disproportionate share hospital (DSH) adjustment, provides for a 
percentage increase in Medicare payments to hospitals that qualify 
under either of two statutory formulas designed to identify hospitals 
that serve a disproportionate share of low-income patients. For 
qualifying hospitals, the amount of this adjustment varies based on the 
outcome of the statutory calculations. The Affordable Care Act revised 
the Medicare DSH payment methodology and provided for a new additional 
Medicare payment that considers the amount of uncompensated care 
provided by the hospital. Payment under this methodology began in FY 
2014.
    If the hospital is an approved teaching hospital, it receives a 
percentage add-on payment for each case paid under the IPPS, known as 
the indirect medical education (IME) adjustment. This percentage 
varies, depending on the ratio of residents to beds.
    Additional payments may be made for cases that involve new 
technologies or medical services that have been approved for special 
add-on payments. To qualify, a new technology or medical service must 
demonstrate that it is a substantial clinical improvement over 
technologies or services otherwise available, and that, absent an add-
on payment, it would be inadequately paid under the regular DRG 
payment.
    The costs incurred by the hospital for a case are evaluated to 
determine whether the hospital is eligible for an additional payment as 
an outlier case. This additional payment is designed to protect the 
hospital from large financial losses due to unusually expensive cases. 
Any eligible outlier payment is added to the DRG-adjusted base payment 
rate, plus any DSH, IME, and new technology or medical service add-on 
adjustments.
    Although payments to most hospitals under the IPPS are made on the 
basis of the standardized amounts, some categories of hospitals are 
paid in whole or in part based on their hospital-specific rate, which 
is determined from their costs in a base year. For example, sole 
community hospitals (SCHs) receive the higher of a hospital-specific 
rate based on their costs in a base year (the highest of FY 1982, FY 
1987, FY 1996, or FY 2006) or the IPPS Federal rate based on the 
standardized amount. SCHs are the sole source of care in their areas. 
Specifically, section 1886(d)(5)(D)(iii) of the Act defines an SCH as a 
hospital that is located more than 35 road miles from another hospital 
or that, by reason of factors such as isolated location, weather 
conditions, travel conditions, or absence of other like hospitals (as 
determined by the Secretary), is the sole source of hospital inpatient 
services reasonably available to Medicare beneficiaries. In addition, 
certain rural hospitals previously designated by the Secretary as 
essential access community hospitals are considered SCHs.
    We note that the Medicare Access and CHIP Reauthorization Act of 
2015 (Pub. L. 114-10), enacted on April 16, 2015, extended the 
Medicare-dependent, small rural hospital (MDH) program through FY 2017. 
Through and including FY 2006, an MDH received the higher of the 
Federal rate or the Federal rate plus 50 percent of the amount by which 
the Federal rate was exceeded by the higher of its FY 1982 or FY 1987 
hospital-specific rate. For discharges occurring on or after October 1, 
2007, through FY 2017, an MDH receives the higher of the Federal rate 
or the Federal rate plus 75 percent of the amount by which the Federal 
rate is exceeded by the highest of its FY 1982, FY 1987, or FY 2002 
hospital-specific rate. MDHs are a major source of care for Medicare 
beneficiaries in their areas. Section 1886(d)(5)(G)(iv) of the Act 
defines an MDH as a hospital that is located in a rural area, has no 
more than 100 beds, is not an SCH, and has a high percentage of 
Medicare discharges (not less than 60 percent of its inpatient days or 
discharges in its cost reporting year beginning in FY 1987 or in two of 
its three most recently settled Medicare cost reporting years).
    Section 1886(g) of the Act requires the Secretary to pay for the 
capital-related costs of inpatient hospital services ``in accordance 
with a prospective payment system established by the Secretary.'' The 
basic methodology for determining capital prospective payments is set 
forth in our regulations at 42 CFR 412.308 and 412.312. Under the 
capital IPPS, payments are adjusted by the same DRG for the case as 
they are under the operating IPPS. Capital IPPS payments are also 
adjusted for IME and DSH, similar to the adjustments made under the 
operating IPPS. In addition, hospitals may receive outlier payments for 
those cases that have unusually high costs.
    The existing regulations governing payments to hospitals under the 
IPPS are located in 42 CFR part 412, subparts A through M.
2. Hospitals and Hospital Units Excluded From the IPPS
    Under section 1886(d)(1)(B) of the Act, as amended, certain 
hospitals and hospital units are excluded from the IPPS. These 
hospitals and units are: Rehabilitation hospitals and units; long-term 
care hospitals (LTCHs); psychiatric hospitals and units; children's 
hospitals; certain cancer hospitals; and short-term acute care 
hospitals located in Guam, the U.S. Virgin Islands, the Northern 
Mariana Islands, and American Samoa. Religious nonmedical health care 
institutions (RNHCIs) are also excluded from the IPPS. Various sections 
of the Balanced Budget Act of 1997 (BBA, Pub. L. 105-33), the Medicare, 
Medicaid and SCHIP [State Children's Health Insurance Program] Balanced 
Budget Refinement Act of 1999 (BBRA, Pub. L. 106-113), and the 
Medicare, Medicaid, and SCHIP Benefits Improvement and Protection Act 
of 2000 (BIPA, Pub. L. 106-554) provide for the implementation of PPSs 
for rehabilitation hospitals and units (referred to as inpatient 
rehabilitation facilities (IRFs)), LTCHs, and psychiatric hospitals and 
units (referred to as inpatient psychiatric facilities (IPFs)). (We 
note that the annual updates to the LTCH PPS are now included as part 
of the IPPS annual update document. Updates to the IRF PPS and IPF PPS 
are issued as separate documents.) Children's hospitals, certain cancer 
hospitals, short-term acute care hospitals located in Guam, the U.S. 
Virgin Islands, the Northern Mariana Islands, and American Samoa, and 
RNHCIs continue to be paid solely under a reasonable cost-based system 
subject to a rate-of-increase ceiling on inpatient operating costs, as 
updated annually by the percentage increase in the IPPS operating 
market basket.
    The existing regulations governing payments to excluded hospitals 
and hospital units are located in 42 CFR parts 412 and 413.
3. Long-Term Care Hospital Prospective Payment System (LTCH PPS)
    The Medicare prospective payment system (PPS) for LTCHs applies to 
hospitals described in section 1886(d)(1)(B)(iv) of the Act effective 
for cost reporting periods beginning on or after October 1, 2002. The 
LTCH PPS was established under the authority of section 123 of the BBRA 
and section 307(b) of the BIPA (as codified under section 1886(m)(1) of 
the Act). During the 5-year (optional) transition period, a LTCH's 
payment under the PPS was based on an increasing proportion of the LTCH 
Federal rate with a corresponding

[[Page 49340]]

decreasing proportion based on reasonable cost principles. Effective 
for cost reporting periods beginning on or after October 1, 2006, all 
LTCHs are paid 100 percent of the Federal rate. Section 1206(a) of 
Public Law 113-67 established the site neutral payment rate under the 
LTCH PPS. Under this statute, based on a rolling effective date that is 
linked to the date on which a given LTCH's Federal FY 2016 cost 
reporting period begins, LTCHs will be paid for LTCH discharges at the 
new site neutral payment rate unless the discharge meets the patient 
criteria for payment at the LTCH PPS standard Federal payment rate. The 
existing regulations governing payment under the LTCH PPS are located 
in 42 CFR part 412, subpart O.
4. Critical Access Hospitals (CAHs)
    Under sections 1814(l), 1820, and 1834(g) of the Act, payments made 
to critical access hospitals (CAHs) (that is, rural hospitals or 
facilities that meet certain statutory requirements) for inpatient and 
outpatient services are generally based on 101 percent of reasonable 
cost. Reasonable cost is determined under the provisions of section 
1861(v)(1)(A) of the Act and existing regulations under 42 CFR part 
413.
5. Payments for Graduate Medical Education (GME)
    Under section 1886(a)(4) of the Act, costs of approved educational 
activities are excluded from the operating costs of inpatient hospital 
services. Hospitals with approved graduate medical education (GME) 
programs are paid for the direct costs of GME in accordance with 
section 1886(h) of the Act. The amount of payment for direct GME costs 
for a cost reporting period is based on the hospital's number of 
residents in that period and the hospital's costs per resident in a 
base year. The existing regulations governing payments to the various 
types of hospitals are located in 42 CFR part 413.

C. Summary of Provisions of Recent Legislation Discussed in This Final 
Rule

    The American Taxpayer Relief Act of 2012 (ATRA) (Pub. L. 112-240), 
enacted on January 2, 2013, made a number of changes that affect the 
IPPS. We announced changes related to certain IPPS provisions for FY 
2013 in accordance with sections 605 and 606 of Public Law 112-240 in a 
notice that appeared in the Federal Register on March 7, 2013 (78 FR 
14689).
    The Pathway for SGR Reform Act of 2013 (Pub. L. 113-67), enacted on 
December 26, 2013, also made a number of changes that affect the IPPS 
and the LTCH PPS. We implemented changes related to the low-volume 
hospital payment adjustment and MDH provisions for FY 2014 in 
accordance with sections 1105 and 1106 of Public Law 113-67 in an 
interim final rule with comment period that appeared in the Federal 
Register on March 18, 2014 (79 FR 15022).
    The Protecting Access to Medicare Act of 2014 (Pub. L. 113-93), 
enacted on April 1, 2014, also made a number of changes that affect the 
IPPS and LTCH PPS.
    The Improving Medicare Post-Acute Care Transformation Act of 2014 
(IMPACT Act of 2014) (Pub. L. 113-185), enacted on October 6, 2014, 
made a number of changes that affect the Long-Term Care Quality 
Reporting Program (LTCH QRP).
    The Medicare Access and CHIP Reauthorization Act of 2015 (Pub. L. 
114-10) enacted on April 16, 2015, extended the MDH program and changes 
to the payment adjustment for low-volume hospitals through FY 2017.
1. American Taxpayer Relief Act of 2012 (ATRA) (Pub. L. 112-240)
    In this final rule, we are making policy changes to implement 
section 631 of the American Taxpayer Relief Act of 2012, which amended 
section 7(b)(1)(B) of Public Law 110-90 and requires a recoupment 
adjustment to the standardized amounts under section 1886(d) of the Act 
based upon the Secretary's estimates for discharges occurring in FY 
2014 through FY 2017 to fully offset $11 billion (which represents the 
amount of the increase in aggregate payments from FYs 2008 through 2013 
for which an adjustment was not previously applied).
2. Pathway for SGR Reform Act of 2013 (Pub. L. 113-67)
    In this final rule, we are providing clarifications to prior policy 
changes, making new policy changes, and discussing the need for future 
policy changes to implement provisions under section 1206 of the 
Pathway for SGR Reform Act of 2013. These include:
     Section 1206(a), which provides for the establishment of 
patient criteria for exclusion from the new site neutral payment rate 
under the LTCH PPS, beginning in FY 2016.
     Section 1206(a)(3), which requires changes to the LTCH 
average length of stay criterion.
     Section 1206(b)(1), which further amended section 114(c) 
of the MMSEA, as amended by section 4302(a) of the ARRA and sections 
3106(c) and 10312(a) of the Affordable Care Act by retroactively 
reestablishing, and extending, the statutory moratorium on the full 
implementation of the 25-percent threshold payment adjustment policy 
under the LTCH PPS so that the policy will be in effect for 9 years 
(except for grandfathered hospitals-within-hospitals (HwHs), which it 
permanently exempted from this policy).
     Section 1206(b)(2), which amended section 114(d) of the 
MMSEA, as amended by section 4302(a) of the ARRA and sections 3106(c) 
and 10312(a) of the Affordable Care Act to establish new moratoria 
(subject to certain defined exceptions) on the development of new LTCHs 
and LTCH satellite facilities and a new moratorium on increases in the 
number of beds in existing LTCHs and LTCH satellite facilities.
3. Protecting Access to Medicare Act of 2014 (Pub. L. 113-93)
    In this final rule, we are clarifying or discussing our prior 
policy changes that implemented the following provisions (or portions 
of the following provisions) of the Protecting Access to Medicare Act 
of 2014 that are applicable to the IPPS and the LTCH PPS for FY 2016:
     Section 112, which makes certain changes to Medicare LTCH 
provisions, including modifications to the statutory moratoria on the 
establishment of new LTCHs and LTCH satellite facilities.
     Section 212, which prohibits the Secretary from requiring 
implementation of ICD-10 code sets before October 1, 2015.
4. Improving Medicare Post-Acute Care Transformation Act of 2014 
(IMPACT Act of 2014) (Pub. L. 113-185)
    In this final rule, we are implementing portions of section 2 of 
the IMPACT Act of 2014, which, in part, requires LTCHs, among other 
postacute care providers, to report standardized patient assessment 
data, data on quality measures, and data on resource use and other 
measures.
5. The Medicare Access and CHIP Reauthorization Act of 2015 (Pub. L. 
114-10)
    In this document, as an interim final rule with comment period, we 
are implementing sections 204 and 205 of the Medicare Access and CHIP 
Reauthorization Act of 2015, which extended the MDH program and changes 
to the low-volume payment adjustment for hospitals through FY 2017.

[[Page 49341]]

D. Issuance of Notice of Proposed Rulemaking

    Earlier this year, we published a proposed rule that set forth 
proposed changes for the Medicare IPPS for operating costs and for 
capital-related costs of acute care hospitals for FY 2016. The proposed 
rule appeared in the Federal Register on April 30, 2015 (80 FR 24324). 
We also set forth proposed changes to payments to certain hospitals 
that continue to be excluded from the IPPS and paid on a reasonable 
cost basis. In addition, in the proposed rule, we set forth proposed 
changes to the payment rates, factors, and other payment rate policies 
under the LTCH PPS for FY 2016.
    Below is a summary of the major changes that we proposed to make.
1. Proposed Changes to MS-DRG Classifications and Recalibrations of 
Relative Weights
    In section II. of the preamble of the proposed rule, we included--
     Proposed changes to MS-DRG classifications based on our 
yearly review, including a discussion of the conversion of MS-DRGs to 
ICD-10 and the implementation of the ICD-10-CM and ICD-10-PCS systems.
     Proposed application of the documentation and coding 
adjustment for FY 2016 resulting from implementation of the MS-DRG 
system.
     Proposed recalibrations of the MS-DRG relative weights.
     Proposed changes to hospital-acquired conditions (HACs) 
and a discussion of HACs, including infections, that would be subject 
to the statutorily required adjustment in MS-DRG payments for FY 2016.
     A discussion of the FY 2016 status of new technologies 
approved for add-on payments for FY 2015 and a presentation of our 
evaluation and analysis of the FY 2016 applicants for add-on payments 
for high-cost new medical services and technologies (including public 
input, as directed by Pub. L. 108-173, obtained in a town hall 
meeting).
2. Proposed Changes to the Hospital Wage Index for Acute Care Hospitals
    In section III. of the preamble to the proposed rule, we proposed 
revisions to the wage index for acute care hospitals and the annual 
update of the wage data. Specific issues addressed included the 
following:
     The proposed FY 2016 wage index update using wage data 
from cost reporting periods beginning in FY 2012.
     Calculation of the proposed occupational mix adjustment 
for FY 2016 based on the 2013 Occupational Mix Survey.
     Analysis and implementation of the proposed FY 2016 
occupational mix adjustment to the wage index for acute care hospitals.
     Application of the rural floor, the proposed imputed rural 
floor, and the frontier State floor.
     Transitional wage indexes relating to the continued use of 
the revised OMB labor market area delineations based on 2010 Decennial 
Census data.
     Proposed revisions to the wage index for acute care 
hospitals based on hospital redesignations and reclassifications.
     The proposed out-migration adjustment to the wage index 
for acute care hospitals for FY 2016 based on commuting patterns of 
hospital employees who reside in a county and work in a different area 
with a higher wage index. Beginning in FY 2016, we proposed new out-
migration adjustments based on commuting patterns obtained from 2010 
Decennial Census data.
     The timetable for reviewing and verifying the wage data 
used to compute the proposed FY 2016 hospital wage index.
     Determination of the labor-related share for the proposed 
FY 2016 wage index.
     Proposed changes to the 3-year average pension policy and 
proposed changes to the wage index timetable regarding pension cost for 
FY 2017 and subsequent years.
     Clarification of the allocation of pension costs for the 
wage index.
3. Other Decisions and Proposed Changes to the IPPS for Operating Costs 
and Indirect Medical Education (IME) Costs
    In section IV. of the preamble of the proposed rule, we discussed 
proposed changes or clarifications of a number of the provisions of the 
regulations in 42 CFR parts 412 and 413, including the following:
     Proposed changes to the inpatient hospital updates for FY 
2016, including the adjustment for hospitals that are not meaningful 
EHR users under section 1886(b)(3)(B)(ix) of the Act.
     The proposed updated national and regional case-mix values 
and discharges for purposes of determining RRC status.
     The statutorily required IME adjustment factor for FY 
2016.
     Proposal for determining Medicare DSH payments and the 
additional payments for uncompensated care for FY 2016.
     Proposed changes to the measures and payment adjustments 
under the Hospital Readmissions Reduction Program.
     Proposed changes to the requirements and provision of 
value-based incentive payments under the Hospital Value-Based 
Purchasing Program.
     Proposed requirements for payment adjustments to hospitals 
under the HAC Reduction Program for FY 2016.
     Proposed elimination of the election by hospitals to use 
the simplified cost allocation methodology for Medicare cost reports.
     Discussion of the Rural Community Hospital Demonstration 
Program and a proposal for making a budget neutrality adjustment for 
the demonstration program.
     Proposed changes in postacute care transfer policies as a 
result of proposed new MS-DRGs.
     A statement of our intent to discuss issues related to 
short inpatient hospital stays, long outpatient stays with observation 
services, and the related -0.2 percent IPPS payment adjustment in the 
CY 2016 hospital outpatient prospective payment system proposed rule.
4. Proposed FY 2016 Policy Governing the IPPS for Capital-Related Costs
    In section V. of the preamble to the proposed rule, we discussed 
the proposed payment policy requirements for capital-related costs and 
capital payments to hospitals for FY 2016.
5. Proposed Changes to the Payment Rates for Certain Excluded 
Hospitals: Rate-of-Increase Percentages
    In section VI. of the preamble of the proposed rule, we discussed 
proposed changes to payments to certain excluded hospitals for FY 2016.
6. Proposed Changes to the LTCH PPS
    In section VII. of the preamble of the proposed rule, we set 
forth--
     Proposed changes to the LTCH PPS Federal payment rates, 
factors, and other payment rate policies under the LTCH PPS for FY 
2016.
     Proposals to implement section 1206(a)(1) of the Pathway 
for SGR Reform Act, which established the site neutral payment rate as 
the default means of paying for discharges in LTCH cost reporting 
periods beginning on or after October 1, 2015.
     Provisions to make technical clarifications regarding the 
moratoria on the establishment of new LTCHs and LTCH satellite 
facilities and on bed increases in existing LTCHs and LTCH satellite 
facilities that were established by section 1206(b)(2) of the Pathway 
for SGR Reform, as amended, as well as a

[[Page 49342]]

proposal to make a technical revision to the regulations to more 
clearly reflect our established policies.
     Proposal to revise the average length of stay criterion 
for LTCHs to implement section 1206(a)(3) of the Pathway for SGR Reform 
Act.
7. Proposed Changes Relating to Quality Data Reporting for Specific 
Providers and Suppliers
    In section VIII. of the preamble of the proposed rule, we 
addressed--
     Proposed requirements for the Hospital Inpatient Quality 
Reporting (IQR) Program as a condition for receiving the full 
applicable percentage increase.
     Proposed changes to the requirements for the quality 
reporting program for PPS-exempt cancer hospitals (PCHQR Program).
     Proposed changes to the requirements under the LTCH 
Quality Reporting Program (LTCH QRP).
     Proposed changes to align the reporting and submission 
timelines for the electronic submission of clinical quality measures 
for the Medicare Electronic Health Record (EHR) Incentive Program for 
eligible hospitals and CAHs with the reporting and submission of 
timelines for the Hospital IQR Program. (We note that the proposal 
included in the proposed rule to establish in regulations an EHR 
technology certification criterion for reporting clinical quality 
measures is not being finalized in this final rule but will be 
addressed in a future rulemaking.)
8. Determining Prospective Payment Operating and Capital Rates and 
Rate-of-Increase Limits for Acute Care Hospitals
    In the Addendum to the proposed rule, we set forth proposed changes 
to the amounts and factors for determining the proposed FY 2016 
prospective payment rates for operating costs and capital-related costs 
for acute care hospitals. We also proposed to establish the threshold 
amounts for outlier cases. In addition, we addressed the update factors 
for determining the rate-of-increase limits for cost reporting periods 
beginning in FY 2016 for certain hospitals excluded from the IPPS.
9. Determining Standard Federal Payment Rates for LTCHs
    In the Addendum to the proposed rule, we set forth proposed changes 
to the amounts and factors for determining the proposed FY 2016 LTCH 
PPS standard Federal payment rate. We proposed to establish the 
adjustments for wage levels, the labor-related share, the cost-of-
living adjustment, and high-cost outliers, including the fixed-loss 
amount, and the LTCH cost-to-charge ratios (CCRs) under the LTCH PPS.
10. Impact Analysis
    In Appendix A of the proposed rule, we set forth an analysis of the 
impact that the proposed changes would have on affected acute care 
hospitals, LTCHs, and PCHs.
11. Recommendation of Update Factors for Operating Cost Rates of 
Payment for Hospital Inpatient Services
    In Appendix B of the proposed rule, as required by sections 
1886(e)(4) and (e)(5) of the Act, we provided our recommendations of 
the appropriate percentage changes for FY 2016 for the following:
     A single average standardized amount for all areas for 
hospital inpatient services paid under the IPPS for operating costs of 
acute care hospitals (and hospital-specific rates applicable to SCHs).
     Target rate-of-increase limits to the allowable operating 
costs of hospital inpatient services furnished by certain hospitals 
excluded from the IPPS.
     The standard Federal payment rate for hospital inpatient 
services furnished by LTCHs.
12. Discussion of Medicare Payment Advisory Commission Recommendations
    Under section 1805(b) of the Act, MedPAC is required to submit a 
report to Congress, no later than March 15 of each year, in which 
MedPAC reviews and makes recommendations on Medicare payment policies. 
MedPAC's March 2015 recommendations concerning hospital inpatient 
payment policies address the update factor for hospital inpatient 
operating costs and capital-related costs for hospitals under the IPPS. 
We addressed these recommendations in Appendix B of the proposed rule. 
For further information relating specifically to the MedPAC March 2015 
report or to obtain a copy of the report, contact MedPAC at (202) 220-
3700 or visit MedPAC's Web site at: http://www.medpac.gov.

E. Public Comments Received in Response to the FY 2016 IPPS/LTCH PPS 
Proposed Rule

    We received approximately 361 timely pieces of correspondence 
containing multiple comments on the FY 2016 IPPS/LTCH PPS proposed 
rule. We note that some of these public comments were outside of the 
scope of the proposed rule. These out-of-scope public comments are 
mentioned but not addressed with the policy responses in this final 
rule. Summaries of the public comments that are within the scope of the 
proposed rule and our responses to those public comments are set forth 
in the various sections of this final rule under the appropriate 
heading.

II. Changes to Medicare Severity Diagnosis-Related Group (MS-DRG) 
Classifications and Relative Weights

A. Background

    Section 1886(d) of the Act specifies that the Secretary shall 
establish a classification system (referred to as diagnosis-related 
groups (DRGs)) for inpatient discharges and adjust payments under the 
IPPS based on appropriate weighting factors assigned to each DRG. 
Therefore, under the IPPS, Medicare pays for inpatient hospital 
services on a rate per discharge basis that varies according to the DRG 
to which a beneficiary's stay is assigned. The formula used to 
calculate payment for a specific case multiplies an individual 
hospital's payment rate per case by the weight of the DRG to which the 
case is assigned. Each DRG weight represents the average resources 
required to care for cases in that particular DRG, relative to the 
average resources used to treat cases in all DRGs.
    Congress recognized that it would be necessary to recalculate the 
DRG relative weights periodically to account for changes in resource 
consumption. Accordingly, section 1886(d)(4)(C) of the Act requires 
that the Secretary adjust the DRG classifications and relative weights 
at least annually. These adjustments are made to reflect changes in 
treatment patterns, technology, and any other factors that may change 
the relative use of hospital resources.

B. MS-DRG Reclassifications

    For general information about the MS-DRG system, including yearly 
reviews and changes to the MS-DRGs, we refer readers to the previous 
discussions in the FY 2010 IPPS/RY 2010 LTCH PPS final rule (74 FR 
43764 through 43766), the FY 2011 IPPS/LTCH PPS final rule (75 FR 50053 
through 50055), the FY 2012 IPPS/LTCH PPS final rule (76 FR 51485 
through 51487), the FY 2013 IPPS/LTCH PPS final rule (77 FR 53273), the 
FY 2014 IPPS/LTCH PPS final rule (78 FR 50512), and the FY 2015 IPPS/
LTCH PPS final rule (79 FR 49871).

C. Adoption of the MS-DRGs in FY 2008

    For information on the adoption of the MS-DRGs in FY 2008, we refer 
readers to the FY 2008 IPPS final rule

[[Page 49343]]

with comment period (72 FR 47140 through 47189).

D. FY 2016 MS-DRG Documentation and Coding Adjustment

1. Background on the Prospective MS-DRG Documentation and Coding 
Adjustments for FY 2008 and FY 2009 Authorized by Public Law 110-90
    In the FY 2008 IPPS final rule with comment period (72 FR 47140 
through 47189), we adopted the MS-DRG patient classification system for 
the IPPS, effective October 1, 2007, to better recognize severity of 
illness in Medicare payment rates for acute care hospitals. The 
adoption of the MS-DRG system resulted in the expansion of the number 
of DRGs from 538 in FY 2007 to 745 in FY 2008. By increasing the number 
of MS-DRGs and more fully taking into account patient severity of 
illness in Medicare payment rates for acute care hospitals, MS-DRGs 
encourage hospitals to improve their documentation and coding of 
patient diagnoses.
    In the FY 2008 IPPS final rule with comment period (72 FR 47175 
through 47186), we indicated that the adoption of the MS-DRGs had the 
potential to lead to increases in aggregate payments without a 
corresponding increase in actual patient severity of illness due to the 
incentives for additional documentation and coding. In that final rule 
with comment period, we exercised our authority under section 
1886(d)(3)(A)(vi) of the Act, which authorizes us to maintain budget 
neutrality by adjusting the national standardized amount, to eliminate 
the estimated effect of changes in coding or classification that do not 
reflect real changes in case-mix. Our actuaries estimated that 
maintaining budget neutrality required an adjustment of -4.8 percent to 
the national standardized amount. We provided for phasing in this -4.8 
percent adjustment over 3 years. Specifically, we established 
prospective documentation and coding adjustments of -1.2 percent for FY 
2008, -1.8 percent for FY 2009, and -1.8 percent for FY 2010.
    On September 29, 2007, Congress enacted the TMA [Transitional 
Medical Assistance], Abstinence Education, and QI [Qualifying 
Individuals] Programs Extension Act of 2007 (Pub. L. 110-90). Section 
7(a) of Public Law 110-90 reduced the documentation and coding 
adjustment made as a result of the MS-DRG system that we adopted in the 
FY 2008 IPPS final rule with comment period to -0.6 percent for FY 2008 
and -0.9 percent for FY 2009, and we finalized the FY 2008 adjustment 
through rulemaking, effective October 1, 2007 (72 FR 66886).
    For FY 2009, section 7(a) of Public Law 110-90 required a 
documentation and coding adjustment of -0.9 percent, and we finalized 
that adjustment through rulemaking effective October 1, 2008 (73 FR 
48447). The documentation and coding adjustments established in the FY 
2008 IPPS final rule with comment period, which reflected the 
amendments made by section 7(a) of Public Law 110-90, are cumulative. 
As a result, the -0.9 percent documentation and coding adjustment for 
FY 2009 was in addition to the -0.6 percent adjustment for FY 2008, 
yielding a combined effect of -1.5 percent.
2. Adjustment to the Average Standardized Amounts Required by Public 
Law 110-90
a. Prospective Adjustment Required by Section 7(b)(1)(A) of Public Law 
110-90
    Section 7(b)(1)(A) of Public Law 110-90 requires that, if the 
Secretary determines that implementation of the MS-DRG system resulted 
in changes in documentation and coding that did not reflect real 
changes in case-mix for discharges occurring during FY 2008 or FY 2009 
that are different than the prospective documentation and coding 
adjustments applied under section 7(a) of Public Law 110-90, the 
Secretary shall make an appropriate adjustment under section 
1886(d)(3)(A)(vi) of the Act. Section 1886(d)(3)(A)(vi) of the Act 
authorizes adjustments to the average standardized amounts for 
subsequent fiscal years in order to eliminate the effect of such coding 
or classification changes. These adjustments are intended to ensure 
that future annual aggregate IPPS payments are the same as the payments 
that otherwise would have been made had the prospective adjustments for 
documentation and coding applied in FY 2008 and FY 2009 reflected the 
change that occurred in those years.
b. Recoupment or Repayment Adjustments in FYs 2010 Through 2012 
Required by Section 7(b)(1)(B) Public Law 110-90
    If, based on a retroactive evaluation of claims data, the Secretary 
determines that implementation of the MS-DRG system resulted in changes 
in documentation and coding that did not reflect real changes in case-
mix for discharges occurring during FY 2008 or FY 2009 that are 
different from the prospective documentation and coding adjustments 
applied under section 7(a) of Public Law 110-90, section 7(b)(1)(B) of 
Public Law 110-90 requires the Secretary to make an additional 
adjustment to the standardized amounts under section 1886(d) of the 
Act. This adjustment must offset the estimated increase or decrease in 
aggregate payments for FYs 2008 and 2009 (including interest) resulting 
from the difference between the estimated actual documentation and 
coding effect and the documentation and coding adjustment applied under 
section 7(a) of Public Law 110-90. This adjustment is in addition to 
making an appropriate adjustment to the standardized amounts under 
section 1886(d)(3)(A)(vi) of the Act as required by section 7(b)(1)(A) 
of Public Law 110-90. That is, these adjustments are intended to recoup 
(or repay, in the case of underpayments) spending in excess of (or less 
than) spending that would have occurred had the prospective adjustments 
for changes in documentation and coding applied in FY 2008 and FY 2009 
matched the changes that occurred in those years. Public Law 110-90 
requires that the Secretary only make these recoupment or repayment 
adjustments for discharges occurring during FYs 2010, 2011, and 2012.
3. Retrospective Evaluation of FY 2008 and FY 2009 Claims Data
    In order to implement the requirements of section 7 of Public Law 
110-90, we performed a retrospective evaluation of the FY 2008 data for 
claims paid through December 2008 using the methodology first described 
in the FY 2009 IPPS/LTCH PPS final rule (73 FR 43768 and 43775) and 
later discussed in the FY 2010 IPPS/RY 2010 LTCH PPS final rule (74 FR 
43768 through 43772). We performed the same analysis for FY 2009 claims 
data using the same methodology as we did for FY 2008 claims (75 FR 
50057 through 50068). The results of the analysis for the FY 2011 IPPS/
LTCH PPS proposed and final rules, and subsequent evaluations in FY 
2012, supported that the 5.4 percent estimate accurately reflected the 
FY 2009 increases in documentation and coding under the MS-DRG system. 
We were persuaded by both MedPAC's analysis (as discussed in the FY 
2011 IPPS/LTCH PPS final rule (75 FR 50064 through 50065)) and our own 
review of the methodologies recommended by various commenters that the 
methodology we employed to determine the required documentation and 
coding adjustments was sound.
    As in prior years, the FY 2008, FY 2009, and FY 2010 MedPAR files 
are available to the public to allow independent analysis of the FY 
2008 and FY 2009 documentation and coding

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effects. Interested individuals may still order these files through the 
CMS Web site at: http://www.cms.gov/Research-Statistics-Data-and-Systems/Files-for-Order/LimitedDataSets/ by clicking on MedPAR Limited 
Data Set (LDS)-Hospital (National). This CMS Web page describes the 
file and provides directions and further detailed instructions for how 
to order.
    Persons placing an order must send the following: a Letter of 
Request, the LDS Data Use Agreement and Research Protocol (refer to the 
Web site for further instructions), the LDS Form, and a check (refer to 
the Web site for the required payment amount) to:

Mailing address if using the U.S. Postal Service: Centers for Medicare 
& Medicaid Services, RDDC Account, Accounting Division, P.O. Box 7520, 
Baltimore, MD 21207-0520.
Mailing address if using express mail: Centers for Medicare & Medicaid 
Services, OFM/Division of Accounting--RDDC, 7500 Security Boulevard, 
C3-07-11, Baltimore, MD 21244-1850.
4. Prospective Adjustments for FY 2008 and FY 2009 Authorized by 
Section 7(b)(1)(A) of Public Law 110-90
    In the FY 2010 IPPS/RY 2010 LTCH PPS final rule (74 FR 43767 
through 43777), we opted to delay the implementation of any 
documentation and coding adjustment until a full analysis of case-mix 
changes based on FY 2009 claims data could be completed. We refer 
readers to the FY 2010 IPPS/RY LTCH PPS final rule for a detailed 
description of our proposal, responses to comments, and finalized 
policy. After analysis of the FY 2009 claims data for the FY 2011 IPPS/
LTCH PPS final rule (75 FR 50057 through 50073), we found a total 
prospective documentation and coding effect of 5.4 percent. After 
accounting for the -0.6 percent and the -0.9 percent documentation and 
coding adjustments in FYs 2008 and 2009, we found a remaining 
documentation and coding effect of 3.9 percent. As we have discussed, 
an additional cumulative adjustment of -3.9 percent would be necessary 
to meet the requirements of section 7(b)(1)(A) of Public Law 110-90 to 
make an adjustment to the average standardized amounts in order to 
eliminate the full effect of the documentation and coding changes that 
do not reflect real changes in case-mix on future payments. Unlike 
section 7(b)(1)(B) of Public Law 110-90, section 7(b)(1)(A) does not 
specify when we must apply the prospective adjustment, but merely 
requires us to make an ``appropriate'' adjustment. Therefore, as we 
stated in the FY 2011 IPPS/LTCH PPS final rule (75 FR 50061), we 
believed the law provided some discretion as to the manner in which we 
applied the prospective adjustment of -3.9 percent. As we discussed 
extensively in the FY 2011 IPPS/LTCH PPS final rule, it has been our 
practice to moderate payment adjustments when necessary to mitigate the 
effects of significant downward adjustments on hospitals, to avoid what 
could be widespread, disruptive effects of such adjustments on 
hospitals. Therefore, we stated that we believed it was appropriate to 
not implement the -3.9 percent prospective adjustment in FY 2011 
because we finalized a -2.9 percent recoupment adjustment for that 
fiscal year. Accordingly, we did not propose a prospective adjustment 
under section 7(b)(1)(A) of Public Law 110-90 for FY 2011 (75 FR 23868 
through 23870). We noted that, as a result, payments in FY 2011 (and in 
each future fiscal year until we implemented the requisite adjustment) 
would be higher than they would have been if we had implemented an 
adjustment under section 7(b)(1)(A) of Public Law 110-90.
    In the FY 2012 IPPS/LTCH PPS final rule (76 FR 51489 and 51497), we 
indicated that, because further delay of this prospective adjustment 
would result in a continued accrual of unrecoverable overpayments, it 
was imperative that we implement a prospective adjustment for FY 2012, 
while recognizing CMS' continued desire to mitigate the effects of any 
significant downward adjustments to hospitals. Therefore, we 
implemented a -2.0 percent prospective adjustment to the standardized 
amount instead of the full -3.9 percent.
    In the FY 2013 IPPS/LTCH PPS final rule (77 FR 53274 through 
53276), we completed the prospective portion of the adjustment required 
under section 7(b)(1)(A) of Public Law 110-90 by finalizing a -1.9 
percent adjustment to the standardized amount for FY 2013. We stated 
that this adjustment would remove the remaining effect of the 
documentation and coding changes that do not reflect real changes in 
case-mix that occurred in FY 2008 and FY 2009. We believed that it was 
imperative to implement the full remaining adjustment, as any further 
delay would result in an overstated standardized amount in FY 2013 and 
any future fiscal years until a full adjustment was made.
    We noted again that delaying full implementation of the prospective 
portion of the adjustment required under section 7(b)(1)(A) of Public 
Law 110-90 until FY 2013 resulted in payments in FY 2010 through FY 
2012 being overstated. These overpayments could not be recovered by CMS 
because section 7(b)(1)(B) of Public Law 110-90 limited recoupments to 
overpayments made in FY 2008 and FY 2009.
5. Recoupment or Repayment Adjustment Authorized by Section 7(b)(1)(B) 
of Public Law 110-90
    Section 7(b)(1)(B) of Public Law 110-90 requires the Secretary to 
make an adjustment to the standardized amounts under section 1886(d) of 
the Act to offset the estimated increase or decrease in aggregate 
payments for FY 2008 and FY 2009 (including interest) resulting from 
the difference between the estimated actual documentation and coding 
effect and the documentation and coding adjustments applied under 
section 7(a) of Public Law 110-90. This determination must be based on 
a retrospective evaluation of claims data. Our actuaries estimated that 
there was a 5.8 percentage point difference resulting in an increase in 
aggregate payments of approximately $6.9 billion. Therefore, as 
discussed in the FY 2011 IPPS/LTCH PPS final rule (75 FR 50062 through 
50067), we determined that an aggregate adjustment of -5.8 percent in 
FYs 2011 and 2012 would be necessary in order to meet the requirements 
of section 7(b)(1)(B) of Public Law 110-90 to adjust the standardized 
amounts for discharges occurring in FYs 2010, 2011, and/or 2012 to 
offset the estimated amount of the increase in aggregate payments 
(including interest) in FYs 2008 and 2009.
    It is often our practice to phase in payment rate adjustments over 
more than one year in order to moderate the effect on payment rates in 
any one year. Therefore, consistent with the policies that we have 
adopted in many similar cases, in the FY 2011 IPPS/LTCH PPS final rule, 
we made an adjustment to the standardized amount of -2.9 percent, 
representing approximately one-half of the aggregate adjustment 
required under section 7(b)(1)(B) of Public Law 110-90, for FY 2011. An 
adjustment of this magnitude allowed us to moderate the effects on 
hospitals in one year while simultaneously making it possible to 
implement the entire adjustment within the timeframe required under 
section 7(b)(1)(B) of Public Law 110-90 (that is, no later than FY 
2012). For FY 2012, in accordance with the timeframes set forth by 
section 7(b)(1)(B) of Public Law 110-90, and consistent with the 
discussion in the FY 2011 IPPS/LTCH PPS final rule, we completed the 
recoupment adjustment by implementing the remaining -2.9 percent 
adjustment, in addition to removing the effect of the -2.9 percent

[[Page 49345]]

adjustment to the standardized amount finalized for FY 2011 (76 FR 
51489 and 51498). Because these adjustments, in effect, balanced out, 
there was no year-to-year change in the standardized amount due to this 
recoupment adjustment for FY 2012. In the FY 2013 IPPS/LTCH PPS final 
rule (77 FR 53276), we made a final +2.9 percent adjustment to the 
standardized amount, completing the recoupment portion of section 
7(b)(1)(B) of Public Law 110-90. We note that with this positive 
adjustment, according to our estimates, all overpayments made in FY 
2008 and FY 2009 have been fully recaptured with appropriate interest, 
and the standardized amount has been returned to the appropriate 
baseline.
6. Recoupment or Repayment Adjustment Authorized by Section 631 of the 
American Taxpayer Relief Act of 2012 (ATRA)
    Section 631 of the ATRA amended section 7(b)(1)(B) of Public Law 
110-90 to require the Secretary to make a recoupment adjustment or 
adjustments totaling $11 billion by FY 2017. This adjustment represents 
the amount of the increase in aggregate payments as a result of not 
completing the prospective adjustment authorized under section 
7(b)(1)(A) of Public Law 110-90 until FY 2013. As discussed earlier, 
this delay in implementation resulted in overstated payment rates in 
FYs 2010, 2011, and 2012. The resulting overpayments could not have 
been recovered under Public Law 110-90.
    Similar to the adjustments authorized under section 7(b)(1)(B) of 
Public Law 110-90, the adjustment required under section 631 of the 
ATRA is a one-time recoupment of a prior overpayment, not a permanent 
reduction to payment rates. Therefore, we anticipated that any 
adjustment made to reduce payment rates in one year would eventually be 
offset by a single positive adjustment in FY 2018, once the necessary 
amount of overpayment was recovered. However, we note that section 414 
of the Medicare Access and CHIP Reauthorization Act (MACRA) of 2015, 
Public Law 114-10, enacted on April 16, 2015, replaced the single 
positive adjustment we intended to make in FY 2018 with a 0.5 percent 
positive adjustment for each of FYs 2018 through 2023. The provision 
under section 414 of the MACRA does not impact our FY 2016 adjustment, 
and we will address this MACRA provision in future rulemaking.
    As we stated in the FY 2014 IPPS/LTCH PPS final rule (78 FR 50515 
through 50517), our actuaries estimate that a -9.3 percent adjustment 
to the standardized amount would be necessary if CMS were to fully 
recover the $11 billion recoupment required by section 631 of the ATRA 
in FY 2014. It is often our practice to phase in payment rate 
adjustments over more than one year, in order to moderate the effect on 
payment rates in any one year. Therefore, consistent with the policies 
that we have adopted in many similar cases, and after consideration of 
the public comments we received, in the FY 2014 IPPS/LTCH PPS final 
rule (78 FR 50515 through 50517), we implemented a -0.8 percent 
recoupment adjustment to the standardized amount in FY 2014. We stated 
that if adjustments of approximately -0.8 percent are implemented in 
FYs 2014, 2015, 2016, and 2017, using standard inflation factors, we 
estimate that the entire $11 billion will be accounted for by the end 
of the statutory 4-year timeline. As estimates of any future 
adjustments are subject to slight variations in total savings, we did 
not provide for specific adjustments for FYs 2015, 2016, or 2017 at 
that time. We stated that we believed that this level of adjustment for 
FY 2014 was a reasonable and fair approach that satisfies the 
requirements of the statute while mitigating extreme annual 
fluctuations in payment rates.
    Consistent with the approach discussed in the FY 2014 IPPS/LTCH PPS 
final rule for recouping the $11 billion required by section 631 of the 
ATRA, in the FY 2015 IPPS/LTCH PPS final rule (79 FR 49873 through 
49874), we implemented an additional -0.8 percent recoupment adjustment 
to the standardized amount for FY 2015. We estimated that this level of 
adjustment, combined with leaving the -0.8 percent adjustment made for 
FY 2014 in place, would recover up to $2 billion in FY 2015. When 
combined with the approximately $1 billion adjustment made in FY 2014, 
we estimated that approximately $8 billion would be left to recover 
under section 631 of the ATRA.
    Consistent with the approach discussed in the FY 2014 IPPS/LTCH PPS 
final rule for recouping the $11 billion required by section 631 of the 
ATRA, we proposed in the FY 2016 IPPS/LTCH PPS proposed rule (80 FR 
24342) to implement a -0.8 percent recoupment adjustment to the 
standardized amount for FY 2016. We estimated that this level of 
adjustment, combined with leaving the -0.8 percent adjustments made for 
FY 2014 and FY 2015 in place, would recover up to $3 billion in FY 
2016.
    Comment: Several commenters restated their previous position, as 
set forth in comments submitted in response to the FY 2014 and FY 2015 
IPPS/LTCH PPS proposed rules and summarized in the FY 2014 IPPS/LTCH 
PPS final rule, that CMS overstated the impact of documentation and 
coding effects for prior years. The commenters cited potential 
deficiencies in the CMS methodology and disagreed that the 
congressionally mandated adjustment is warranted. However, the majority 
of these commenters conceded that CMS is required by section 631 of the 
ATRA to recover $11 billion by FY 2017, and supported CMS' policy to 
phase in the adjustments over a 4-year period.
    Response: We refer readers to the FY 2014 IPPS/LTCH PPS final rule 
(78 FR 50515 through 50517) for our response to the commenters' 
position that CMS overstated the impact of documentation and coding 
effects. We appreciate the commenters' acknowledgement that we are 
required by section 631 of the ATRA to recover $11 billion by FY 2017.
    After consideration of the public comments we received, we are 
finalizing the proposal to make an additional -0.8 percent recoupment 
adjustment to the standardized amount for FY 2016. Taking into account 
the cumulative effects of this adjustment and the adjustments made in 
FYs 2014 and 2015, we currently estimate that approximately $5 to $6 
billion would be left to recover under section 631 of the ATRA by the 
end of FY 2016. As we explained in the FY 2014 and FY 2015 IPPS/LTCH 
PPS final rules, estimates of any future adjustments are subject to 
variations in total estimated savings. Therefore, we have not yet 
addressed the specific amount of the final adjustment required under 
section 631 of the ATRA for FY 2017. We intend to address this 
adjustment in the FY 2017 IPPS rulemaking. As stated earlier, we also 
note that section 414 of the MACRA (Pub. L. 114-10), enacted on April 
16, 2015, replaced the single positive adjustment we intended to make 
in FY 2018 with a 0.5 percent positive adjustment for each of FYs 2018 
through 2023. The provision under section 414 of the MACRA does not 
impact our FY 2016 recoupment adjustment, and we will address this 
MACRA provision in future rulemaking.

E. Refinement of the MS-DRG Relative Weight Calculation

1. Background
    Beginning in FY 2007, we implemented relative weights for DRGs 
based on cost report data instead of charge information. We refer 
readers to the FY 2007 IPPS final rule (71 FR 47882) for a detailed 
discussion of our final policy for calculating the cost-based DRG 
relative weights and to the

[[Page 49346]]

FY 2008 IPPS final rule with comment period (72 FR 47199) for 
information on how we blended relative weights based on the CMS DRGs 
and MS-DRGs.
    As we implemented cost-based relative weights, some public 
commenters raised concerns about potential bias in the weights due to 
``charge compression,'' which is the practice of applying a higher 
percentage charge markup over costs to lower cost items and services, 
and a lower percentage charge markup over costs to higher cost items 
and services. As a result, the cost-based weights would undervalue 
high-cost items and overvalue low-cost items if a single cost-to-charge 
ratio (CCR) is applied to items of widely varying costs in the same 
cost center. To address this concern, in August 2006, we awarded a 
contract to the Research Triangle Institute, International (RTI) to 
study the effects of charge compression in calculating the relative 
weights and to consider methods to reduce the variation in the CCRs 
across services within cost centers. For a detailed summary of RTI's 
findings, recommendations, and public comments that we received on the 
report, we refer readers to the FY 2009 IPPS/LTCH PPS final rule (73 FR 
48452 through 48453). In addition, we refer readers to RTI's July 2008 
final report titled ``Refining Cost to Charge Ratios for Calculating 
APC and MS-DRG Relative Payment Weights'' (http://www.rti.org/reports/cms/HHSM-500-2005-0029I/PDF/Refining_Cost_to_Charge_Ratios_200807_Final.pdf).
    In the FY 2009 IPPS final rule (73 FR 48458 through 48467), in 
response to the RTI's recommendations concerning cost report 
refinements, we discussed our decision to pursue changes to the cost 
report to split the cost center for Medical Supplies Charged to 
Patients into one line for ``Medical Supplies Charged to Patients'' and 
another line for ``Implantable Devices Charged to Patients.'' We 
acknowledged, as RTI had found, that charge compression occurs in 
several cost centers that exist on the Medicare cost report. However, 
as we stated in the FY 2009 IPPS final rule, we focused on the CCR for 
Medical Supplies and Equipment because RTI found that the largest 
impact on the MS-DRG relative weights could result from correcting 
charge compression for devices and implants. In determining the items 
that should be reported in these respective cost centers, we adopted 
the commenters' recommendations that hospitals should use revenue codes 
established by the AHA's National Uniform Billing Committee to 
determine the items that should be reported in the ``Medical Supplies 
Charged to Patients'' and the ``Implantable Devices Charged to 
Patients'' cost centers. Accordingly, a new subscripted line for 
``Implantable Devices Charged to Patients'' was created in July 2009. 
This new subscripted cost center has been available for use for cost 
reporting periods beginning on or after May 1, 2009.
    As we discussed in the FY 2009 IPPS final rule (73 FR 48458) and in 
the CY 2009 OPPS/ASC final rule with comment period (73 FR 68519 
through 68527), in addition to the findings regarding implantable 
devices, RTI also found that the costs and charges of computed 
tomography (CT) scans, magnetic resonance imaging (MRI), and cardiac 
catheterization differ significantly from the costs and charges of 
other services included in the standard associated cost center. RTI 
also concluded that both the IPPS and the OPPS relative weights would 
better estimate the costs of those services if CMS were to add standard 
cost centers for CT scans, MRIs, and cardiac catheterization in order 
for hospitals to report separately the costs and charges for those 
services and in order for CMS to calculate unique CCRs to estimate the 
costs from charges on claims data. In the FY 2011 IPPS/LTCH PPS final 
rule (75 FR 50075 through 50080), we finalized our proposal to create 
standard cost centers for CT scans, MRIs, and cardiac catheterization, 
and to require that hospitals report the costs and charges for these 
services under new cost centers on the revised Medicare cost report 
Form CMS-2552-10. (We refer readers to the FY 2011 IPPS/LTCH PPS final 
rule (75 FR 50075 through 50080) for a detailed discussion of the 
reasons for the creation of standard cost centers for CT scans, MRIs, 
and cardiac catheterization.) The new standard cost centers for CT 
scans, MRIs, and cardiac catheterization are effective for cost 
reporting periods beginning on or after May 1, 2010, on the revised 
cost report Form CMS-2552-10.
    In the FY 2009 IPPS final rule (73 FR 48468), we stated that, due 
to what is typically a 3-year lag between the reporting of cost report 
data and the availability for use in ratesetting, we anticipated that 
we might be able to use data from the new ``Implantable Devices Charged 
to Patients'' cost center to develop a CCR for ``Implantable Devices 
Charged to Patients'' in the FY 2012 or FY 2013 IPPS rulemaking cycle. 
However, as noted in the FY 2010 IPPS/RY 2010 LTCH PPS final rule (74 
FR 43782), due to delays in the issuance of the revised cost report 
Form CMS 2552-10, we determined that a new CCR for ``Implantable 
Devices Charged to Patients'' might not be available before FY 2013. 
Similarly, when we finalized the decision in the FY 2011 IPPS/LTCH PPS 
final rule to add new cost centers for CT scans, MRIs, and cardiac 
catheterization, we explained that data from any new cost centers that 
may be created will not be available until at least 3 years after they 
are first used (75 FR 50077). In preparation for the FY 2012 IPPS/LTCH 
PPS rulemaking, we checked the availability of data in the 
``Implantable Devices Charged to Patients'' cost center on the FY 2009 
cost reports, but we did not believe that there was a sufficient amount 
of data from which to generate a meaningful analysis in this particular 
situation. Therefore, we did not propose to use data from the 
``Implantable Devices Charged to Patients'' cost center to create a 
distinct CCR for ``Implantable Devices Charged to Patients'' for use in 
calculating the MS-DRG relative weights for FY 2012. We indicated that 
we would reassess the availability of data for the ``Implantable 
Devices Charged to Patients'' cost center for the FY 2013 IPPS/LTCH PPS 
rulemaking cycle and, if appropriate, we would propose to create a 
distinct CCR at that time.
    During the development of the FY 2013 IPPS/LTCH PPS proposed and 
final rules, hospitals were still in the process of transitioning from 
the previous cost report Form CMS-2552-96 to the new cost report Form 
CMS-2552-10. Therefore, we were able to access only those cost reports 
in the FY 2010 HCRIS with fiscal year begin dates on or after October 
1, 2009, and before May 1, 2010; that is, those cost reports on Form 
CMS-2552-96. Data from the Form CMS-2552-10 cost reports were not 
available because cost reports filed on the Form CMS-2552-10 were not 
accessible in the HCRIS. Further complicating matters was that, due to 
additional unforeseen technical difficulties, the corresponding 
information regarding charges for implantable devices on hospital 
claims was not yet available to us in the MedPAR file. Without the 
breakout in the MedPAR file of charges associated with implantable 
devices to correspond to the costs of implantable devices on the cost 
report, we believed that we had no choice but to continue computing the 
relative weights with the current CCR that combines the costs and 
charges for supplies and implantable devices. We stated in the FY 2013 
IPPS/LTCH PPS final rule (77 FR 53281 through 53283) that when we do 
have the necessary data for supplies and implantable

[[Page 49347]]

devices on the claims in the MedPAR file to create distinct CCRs for 
the respective cost centers for supplies and implantable devices, we 
hoped that we would also have data for an analysis of creating distinct 
CCRs for CT scans, MRIs, and cardiac catheterization, which could then 
be finalized through rulemaking. In the FY 2013 IPPS/LTCH PPS final 
rule (77 FR 53281), we stated that, prior to proposing to create these 
CCRs, we would first thoroughly analyze and determine the impacts of 
the data, and that distinct CCRs for these new cost centers would be 
used in the calculation of the relative weights only if they were first 
finalized through rulemaking.
    At the time of the development of the FY 2014 IPPS/LTCH PPS 
proposed rule (78 FR 27506 through 27507), we had a substantial number 
of hospitals completing all, or some, of these new cost centers on the 
FY 2011 Medicare cost reports, compared to prior years. We stated that 
we believed that the analytic findings described using the FY 2011 cost 
report data and FY 2012 claims data supported our original decision to 
break out and create new cost centers for implantable devices, MRIs, CT 
scans, and cardiac catheterization, and we saw no reason to further 
delay proposing to implement the CCRs of each of these cost centers. 
Therefore, beginning in FY 2014, we proposed a policy to calculate the 
MS-DRG relative weights using 19 CCRs, creating distinct CCRs from cost 
report data for implantable devices, MRIs, CT scans, and cardiac 
catheterization.
    We refer readers to the FY 2014 IPPS/LTCH PPS proposed rule (78 FR 
27507 through 27509) and final rule (78 FR 50518 through 50523) in 
which we presented data analyses using distinct CCRs for implantable 
devices, MRIs, CT scans, and cardiac catheterization. The FY 2014 IPPS/
LTCH PPS final rule also set forth our responses to public comments we 
received on our proposal to implement these CCRs. As explained in more 
detail in the FY 2014 IPPS/LTCH PPS final rule, we finalized our 
proposal to use 19 CCRs to calculate MS-DRG relative weights beginning 
in FY 2014--the then existing 15 cost centers and the 4 new CCRs for 
implantable devices, MRIs, CT scans, and cardiac catheterization. 
Therefore, beginning in FY 2014, we calculate the IPPS MS-DRG relative 
weights using 19 CCRs, creating distinct CCRs for implantable devices, 
MRIs, CT scans, and cardiac catheterization.
2. Discussion for FY 2016 and Summary of Public Comments Received in 
Response to Request on Nonstandard Cost Center Codes
    Consistent with the policy established beginning for FY 2014, we 
calculated the MS-DRG relative weights for FY 2016 using two data 
sources: The MedPAR file as the claims data source and the HCRIS as the 
cost report data source. We adjusted the charges from the claims to 
costs by applying the 19 national average CCRs developed from the cost 
reports. The description of the calculation of the 19 CCRs and the MS-
DRG relative weights for FY 2016 is included in section II.H.3. of the 
preamble of this final rule.
    In preparing to calculate the 19 national average CCRs developed 
from the cost reports, we reviewed the HCRIS data and noticed 
inconsistencies in hospitals' cost reporting and use of nonstandard 
cost center codes. In addition, we discovered that hospitals typically 
report the nonstandard codes with standard cost centers that are 
different from the standard cost centers to which CMS maps and ``rolls 
up'' each nonstandard code in compiling the HCRIS. As stated in the FY 
2016 IPPS/LTCH PPS proposed rule (80 FR 24344), we are concerned that 
inconsistencies in hospitals' use of nonstandard codes, coupled with 
differences in the way hospitals and CMS map these nonstandard codes to 
standard lines, may have implications for the calculation of the 19 
CCRs and the aspects of the IPPS that rely on the CCRs (for example, 
the calculation of the MS-DRG relative weights).
    The Medicare cost report Form CMS-2552-10, Worksheet A, includes 
preprinted cost center codes that reflect the standard cost center 
descriptions by category (General Service, Routine, and Ancillary) used 
in most hospitals. Each preprinted standard cost center is assigned a 
unique 5-digit code. The preprinted 5-digit codes provide standardized 
meaning for data analysis, and are automatically coded by CMS-approved 
cost report software. To accommodate hospitals that have additional 
cost centers that are sufficiently different from the preprinted 
standard cost centers, CMS identified additional cost centers known as 
``nonstandard'' cost centers. Each nonstandard cost center must be 
labeled appropriately and reported under a specific standard cost 
center. For example, under the standard cost center 
``Electrocardiology'' with its 5-digit code of 06900, there are six 
nonstandard cost centers (for EKG and EEG, Electromyography, 
Cardiopulmonary, Stress Test, Cardiology, and Holter Monitor), each 
with a unique 5-digit code.
    The instructions for the Medicare cost report Form CMS-2552-10 
explain the purpose and requirements related to the standard and 
nonstandard cost centers. Specifically, in CMS Pub. 15-2, Chapter 40, 
Section 4013, the instructions for Worksheet A of Form CMS-2552-10 
state:
    ``Cost center coding is a methodology for standardizing the meaning 
of cost center labels as used by health care providers on the Medicare 
cost report. Form CMS-2552-10 provides for preprinted cost center 
descriptions on Worksheet A. In addition, a space is provided for a 
cost center code. The preprinted cost center labels are automatically 
coded by CMS approved cost reporting software. These cost center 
descriptions are hereafter referred to as the standard cost centers. 
Additionally, nonstandard cost center descriptions have been identified 
through analysis of frequently used labels.
    The use of this coding methodology allows providers to continue to 
use labels for cost centers that have meaning within the individual 
institution. The five digit cost center codes that are associated with 
each provider label in their electronic file provide standardized 
meaning for data analysis. You are required to compare any added or 
changed label to the descriptions offered on the standard or 
nonstandard cost center tables. A description of cost center coding and 
the table of cost center codes are in Sec.  4095, Table 5.''
    Section 4095 of CMS Pub. 15-2 (pages 40-805 and 40-806) further 
provides that: ``Both the standard and nonstandard cost center 
descriptions along with their cost center codes are shown on Table 5 . 
. . . Cost center codes may only be used in designated lines in 
accordance with the classification of the cost center(s), i.e., lines 1 
through 23 may only contain cost center codes within the general 
service cost center category of both standard and nonstandard coding. 
For example, in the general service cost center category for Operation 
of Plant cost, line 7 and subscripts thereof should only contain cost 
center codes of 00700-00719 and nonstandard cost center codes. This 
logic must hold true for all other cost center categories, i.e., 
ancillary, inpatient routine, outpatient, other reimbursable, special 
purpose, and non- reimbursable cost centers.''
    Table 5 of Section 4095, Chapter 40, of CMS Pub. 15-2 (pages 40-807 
through 40-810) lists the electronic reporting specifications for each

[[Page 49348]]

standard cost center, its 5-digit code, and, separately, the 
nonstandard cost center descriptions and their 5-digit codes. While the 
nonstandard codes are categorized by General Service Cost Centers, 
Inpatient Routine Service Cost Centers, and Ancillary Service Cost 
Centers, among others, Table 5 does not map the nonstandard cost 
centers and codes to specific standard cost centers. In addition, the 
CMS-approved cost reporting software does not restrict the use of 
nonstandard codes to specific standard cost centers. Furthermore, the 
software does not prevent hospitals from manually entering in a name 
for a nonstandard cost center code that may be different from the name 
that CMS assigned to that nonstandard cost center code. For example, 
Table 5 specifies that the 5-digit code for the Ancillary Service 
nonstandard cost center ``Acupuncture'' is 03020. When CMS creates the 
HCRIS SAS files, CMS maps all codes 03020 to standard line 53, 
``Anesthesiology''.\1\ However, a review of the December 31, 2014 
update of the FY 2013 HCRIS SAS files, from which the proposed 19 CCRs 
for FY 2016 were calculated, revealed that, of the 3,172 times that 
nonstandard code 03020 was reported by hospitals, it is called 
``Acupuncture'' only 122 times. Instead, hospitals use various names 
for nonstandard code 03020, such as ``Cardiopulmonary,'' ``Sleep Lab,'' 
``Diabetes Center,'' or ``Wound Care''.
---------------------------------------------------------------------------

    \1\ To view how CMS rolls up the codes to create the HCRIS SAS 
files, we refer readers to http://www.cms.gov/Research-Statistics-Data-and-Systems/Downloadable-Public-Use-Files/Cost-Reports/Hospital-2010-form.html. On this page, click on ``Hospital-2010-
SAS.ZIP (SAS datasets and documentation)'', and from the zip file, 
choose the Excel spreadsheet ``2552-10 SAS FILE RECORD LAYOUT AND 
CROSSWALK TO 96.xlsx''. The second tab of this spreadsheet is ``NEW 
ROLLUPS'', and shows the standard and nonstandard 5-digit codes 
(columns B and C) that CMS rolls up to each standard line (column 
G).
---------------------------------------------------------------------------

    As noted above, the Ancillary Service standard cost center for 
``Anesthesiology'', line 53 of Worksheet A and subsequent worksheets of 
the Medicare cost report Form CMS-2552-10 (and its associated 
nonstandard cost center code 03020 ``Acupuncture'') is an example of a 
cost center that is subject to inconsistent reporting. Our review of 
the FY 2013 HCRIS as-submitted cost reports from which the proposed 19 
CCRs for FY 2016 were calculated revealed that, regardless of the 
actual name hospitals assigned to nonstandard code 03020 (for example, 
``Acupuncture'' or otherwise), hospitals reported this code almost 100 
percent of the time on standard line 76, ``Other Ancillary,'' and never 
on standard line 53, ``Anesthesiology.'' Yet, as noted above, CMS (and 
previously HCFA, under earlier versions of the Medicare cost report), 
in creating the HCRIS database, has had the longstanding practice of 
mapping and rolling up all instances of nonstandard code 03020 to 
standard line 53, ``Anesthesiology,'' not to standard line 76, ``Other 
Ancillary. Therefore, the version of the HCRIS SAS files created by 
CMS, which CMS uses for ratesetting purposes, may differ somewhat from 
the as-submitted cost reports of hospitals because CMS moves various 
nonstandard cost centers based on cost center codes, not cost center 
descriptions, from the standard cost centers in which hospitals report 
them and places them in different standard cost centers based on CMS' 
roll-up specifications.
    In the FY 2016 IPPS/LTCH PPS proposed rule (80 FR 24345), we 
highlighted the discrepancy in the reporting of nonstandard code 03020 
``Acupuncture'' because the placement of nonstandard code 03020 and its 
related costs and charges seem to have the most significant 
implications for the calculation of one of the 19 CCRs, the Anesthesia 
CCR. As stated in section II.H.3. of the preamble of the proposed rule 
(80 FR 24413), the proposed FY 2016 CCR for Anesthesia was 0.108. We 
calculated this proposed CCR based on the December 31, 2014 update of 
the FY 2013 HCRIS, with the nonstandard cost center codes of 03020 
through 03029 rolled up to standard line 53, ``Anesthesiology.'' That 
is, under the CMS' HCRIS specifications, we rolled up the following 5-
digit codes to standard line 53, ``Anesthesiology'': \2\ standard codes 
for ``Anesthesiology'' 05300 through 05329; and nonstandard codes for 
``Acupuncture'' 03020 through 03029. For simulation purposes, we also 
created a version of the December 31, 2014 update of the FY 2013 HCRIS 
which retained nonstandard codes 03020 through 03029 on standard line 
76, ``Other Ancillary,'' where hospitals actually reported these codes 
on their as-submitted FY 2013 cost reports. When all reported uses of 
nonstandard codes 03020 through 03029 remain on standard line 76, 
``Other Ancillary,'' we calculated that the Anesthesia CCR would be 
0.084 (instead of 0.108 as proposed in section II.H.3. of the preamble 
of the FY 2016 IPPS/LTCH PPS proposed rule). We also looked at the 
effect on the other 18 CCRs. In the version of HCRIS we created for 
simulation purposes, by keeping the nonstandard cost center codes in 
standard line 76, ``Other Ancillary,'' where hospitals typically report 
them, rather than remapping them according to CMS specifications, three 
other CCRs also were affected, although not quite as significantly as 
the Anesthesia CCR. As proposed in section II.H.3. of the preamble of 
the FY 2016 IPPS/LTCH PPS proposed rule, the proposed FY 2016 
Cardiology CCR was 0.119. However, when all cardiology-related 
nonstandard codes were rolled up to standard line 76, ``Other 
Ancillary'', and not to standard line 69, ``Electrocardiology'' as 
under CMS' usual practice, the Cardiology CCR was 0.113. In addition, 
as proposed in section II.H.3. of the preamble of the FY 2016 IPPS/LTCH 
PPS proposed rule, the proposed FY 2016 Radiology CCR was 0.159. 
However, when all radiology-related nonstandard codes were rolled up to 
standard line 76, ``Other Ancillary'', and not to standard lines 54 
(Radiology-Diagnostic), 55 (Radiology-Therapeutic), and 56 
(Radioisotope) as under CMS' usual practice, the Radiology CCR was 
0.161. Most notably, the CCR that was most impacted was the ``Other 
Services'' CCR. As proposed in section II.H.3. of the preamble of the 
FY 2016 proposed rule, the ``Other Services'' CCR was 0.367. However, 
if all nonstandard cost center codes remained in line 76, ``Other 
Ancillary'' as hospitals have reported them in their FY 2013 as-
submitted cost reports, instead of CMS applying its usual practice of 
rolling up these lines to the applicable ``Electrocardiology'' and 
``Radiology'' standard cost centers, among others, the ``Other 
Services'' CCR was 0.291. We note that we observed minimal or no 
differences in the remaining 15 CCRs, when their associated nonstandard 
cost centers were rolled up to their specific standard cost centers, 
versus being rolled up to the standard line 76, ``Other Ancillary.''
---------------------------------------------------------------------------

    \2\ Ibid.
---------------------------------------------------------------------------

    The differences in these CCRs computed from the HCRIS that was 
compiled by applying CMS' current rollup procedures of assigning 
nonstandard codes to specific standard cost centers, as compared to 
following hospitals' general practice of reporting nonstandard codes 
``en masse'' on line 76, ``Other Ancillary,'' have implications for the 
aspects of the IPPS that rely on the CCRs (for example, the calculation 
of the MS-DRG relative weights). In the FY 2016 IPPS/LTCH PPS proposed 
rule (80 FR 24345), we discussed that some questions arise: whether 
CMS' procedures for mapping and rolling up nonstandard cost centers to 
specific standard cost centers should be updated; whether hospital 
reporting practices are imprecise; or whether there is a combination of 
both of these

[[Page 49349]]

questions. CMS' rollup procedures were developed many years ago based 
on historical analysis of hospitals' cost reporting practices and 
health care services furnished. It may be that it would be appropriate 
for CMS to reevaluate its rollup procedures based on hospitals' more 
current cost reporting practices and contemporary health care services 
provided. However, one factor complicating the determination of the 
most accurate standard cost centers to which each respective 
nonstandard cost center should be mapped is hospitals' own inconsistent 
reporting practices. For example, it may be determined that CMS should 
no longer be mapping and rolling up nonstandard cost center 
``Acupuncture'' and its associated 5-digit codes 03020 through 03029 to 
standard cost center line 53, ``Anesthesiology.'' However, determining 
which other standard line ``Acupuncture'' and its associated 5-digit 
codes 03020 through 03029 should be mapped to is unclear, given that, 
as mentioned above, out of the 3,172 times that codes 03020 through 
03029 were reported in the FY 2013 HCRIS file, hospitals called these 
codes ``Acupuncture'' only 122 times, and instead called these codes a 
variety of other names (such as Cardiopulmonary, Sleep Lab, Wound Care, 
Diabetes Center, among others). Therefore, without being able to 
determine the true nature of the services that were actually provided, 
it is difficult to know which standard cost center to map these 
services. That is, the question arises as to whether the service 
provided was acupuncture because a hospital reported code 03020, or 
whether the service provided was cardiopulmonary, which was the name a 
hospital assigned to code 03020. Furthermore, if the service provided 
was in fact cardiopulmonary, then, as Table 5 of Section 4095 of CMS 
Pub. 15-2 indicates, the correct nonstandard code for cardiopulmonary 
is 03160, not 03020. A related question would be, if the hospital 
provided cardiopulmonary services, which are clearly related to 
cardiology, why did the hospital report those costs and charges on line 
76, ``Other Ancillary,'' instead of subscripting standard line 69, 
``Electrocardiology,'' and reporting the cardiopulmonary costs and 
charges there.
    In summary, we stated in the FY 2016 IPPS/LTCH PPS proposed rule 
that we believe that the differences between the standard cost centers 
to which CMS assigns nonstandard codes when CMS rolls up cost report 
data to create the HCRIS SAS database, and the standard cost centers to 
which hospitals tend to assign and use nonstandard codes, coupled with 
the inconsistencies found in hospitals' use and naming of the 
nonstandard codes, have implications for the aspects of the IPPS that 
rely on the CCRs. For example, we have explained above and provided 
examples of how the CCRs used to calculate the MS-DRG relative weights 
could change, based on where certain nonstandard codes are reported and 
rolled up in the cost reports. However, before considering changes to 
our longstanding practices, in the proposed rule, we solicited public 
comments from stakeholders as to how to improve the use of nonstandard 
cost center codes. We indicated that one option might be for CMS to 
allow only certain nonstandard codes to be used with certain standard 
cost centers, meaning that CMS might require that the CMS-approved cost 
reporting software ``lock in'' those nonstandard codes with their 
assigned standard cost centers. For example, if a hospital wishes to 
subscript a standard cost center, the cost reporting software might 
allow the hospital to choose only from a predetermined set of 
nonstandard codes. Therefore, for example, if a hospital wished to 
report Cardiopulmonary costs and charges on its cost report, the only 
place that the hospital could do that under this approach would be from 
a drop down list of cardiology-related services on standard line 69, 
``Electrocardiology,'' and not on another line (not even line 76, 
``Other Ancillary''). We stated that some flexibility could be 
maintained, but within certain limits, in consideration of unique 
services that hospitals might provide.
    Below we summarize the public comments that we received in response 
to our solicitation of comments on nonstandard cost center codes.
    Comment: Several commenters expressed concern that issues related 
to reporting of costs and charges in the nonstandard cost centers could 
affect the validity of the CCRs used to develop the relative weights. 
The commenters requested that CMS provide more cost reporting 
instruction so that the accuracy and validity of the CCRs could be 
improved, through more detailed examples of how cost report and claims 
data are used for ratesetting, identifying what revenue codes and 
services should be associated with specific cost centers, and providing 
detailed instructions regarding cost allocation methods. The commenters 
believed that these types of actions would resolve some of the 
inconsistencies in hospital cost reporting. Several commenters 
supported more specific guidance and data processing on cost reporting 
and supported CMS' idea to ``lock in'' certain nonstandard codes with 
specific cost centers in the cost reporting softwares, but wanted to 
retain flexibility in terms of available options.
    Commenters requested that CMS work with stakeholders through 
methods such as additional engagement with the provider community and 
convening a technical workgroup to receive stakeholder input. Several 
commenters requested that CMS provide sufficient advance notice when 
cost reporting process changes are made, noting that it would take time 
for hospitals to implement changes to their internal cost reporting 
processes. The commenters were generally supportive of efforts to 
improve the cost reporting process and cost estimation accuracy. One 
commenter stated that inconsistencies in reporting of nonstandard cost 
centers compound the problems the commenter raised in earlier public 
comments regarding allocation of capital costs and the new CCRs for 
MRIs and CT scans. Other commenters stated generally that the use of 
distinct CCRs for MRI and CT scans produces ``payment rates that lack 
face validity'' and recommended that CMS not finalize the use of the 
MRI and CT scan CCRs.
    Response: We appreciate the input that stakeholders have provided 
in response to the request for comment on how to improve the use of 
nonstandard cost center codes. As discussed in the FY 2016 IPPS/LTCH 
PPS proposed rule (80 FR 24344 through 24346), we noticed 
inconsistencies in hospital cost reporting of nonstandard cost centers 
and were concerned about the implication that some of these 
discrepancies might have on the aspects of the IPPS that rely on CCRs. 
However, we did not propose any changes to the methodology or data 
sources for the FY 2016 CCRs and relative weights.
    We appreciate the request that CMS provide more detailed 
instructions regarding appropriate cost reporting methodologies. We 
believe that the desire for more specific direction in how to report 
should be balanced by the need for flexibility in cost reporting based 
on each hospital's own internal charge structure. That balance also 
applies to cost allocation methodologies. As discussed in the FY 2014 
IPPS/LTCH PPS final rule (78 FR 50523) and in the FY 2011 IPPS/LTCH PPS 
final rule (75 FR 50077 through 50079), we encouraged hospitals over 
the past several years to use the most precise cost reporting methods 
in response to the new cost report lines such as the MRI and CT scan 
standard

[[Page 49350]]

cost centers, which, in most cases, corresponded to the recommended 
cost allocation statistic. We believe that more precise cost allocation 
could mitigate concerns related to the accuracy of the MRI and CT scan 
CCRs. However, we recognized that hospitals have varying resources and 
capability for assigning costs and charges on the cost report, which is 
why in most cases we have allowed greater flexibility. As commenters 
noted, an instance in which we have specifically provided guidance was 
in connection with the decision to split the cost center for Medical 
Supplies Charged to Patients into one line for ``Medical Supplies 
Charged to Patients'' and another line for ``Implantable Devices 
Charged to Patients,'' where we listed the revenue codes for which 
charges would properly be associated with these two cost centers (we 
refer readers to the FY 2009 IPPS/LTCH PPS final rule (73 FR 48462 
through 48463). For that specific change to address charge compression 
in the ``Medical Supplies'' cost center, the separation between the 
types of services associated with each cost center is more distinct and 
therefore more easily identifiable by revenue code, which may not be 
true of all nonstandard and standard cost centers. Regarding the 
comments stating that use of distinct CCRs for MRI and CT scans produce 
``payment rates that lack face validity'' and that CMS not finalize use 
of the MRI and CT scan CCRs, we note that we did not make any proposals 
regarding the use of the MRI and CT scans in particular in the relative 
weights calculation for FY 2016. As we have done since FY 2014, we are 
using the MRI and CT scan CCRs to calculate the IPPS relative weights 
for FY 2016. We also note that we have previously addressed stakeholder 
concerns related to the CT scan and MRI standard cost centers in 
setting the IPPS relative weights. For a detailed discussion of the CT 
scan and MRI standard cost centers, we refer readers to the FY 2014 
IPPS/LTCH PPS final rule (78 FR 50520 through 50523), and the FY 2011 
IPPS/LTCH PPS final rule (75 FR 50077 through 50079).
    We appreciate the comments that stakeholders submitted and will 
continue to explore ways in which we can improve the accuracy of the 
cost report data and calculated CCRs used in the cost estimation 
process. To the extent possible, we will continue to seek stakeholder 
input in efforts to limit the impact on providers. In the interim, 
while we are considering these public comments, as we proposed, we are 
using the 19 CCRs for FY 2016 (listed in section II.H.3. of the 
preamble of this final rule) that were calculated from the March 2015 
update of the FY 2013 HCRIS, created in accordance with CMS' current 
longstanding procedures for mapping and rolling up nonstandard cost 
center codes. As we did with the FY 2015 IPPS/LTCH PPS final rule, we 
are providing the version of the HCRIS from which we calculated these 
19 CCRs on the FY 2016 IPPS Final Rule Home Page at: http://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/AcuteInpatientPPS/FY2016-IPPS-Final-Rule-Home-Page.html.\3\
---------------------------------------------------------------------------

    \3\ Ibid.
---------------------------------------------------------------------------

F. Adjustment to MS-DRGs for Preventable Hospital-Acquired Conditions 
(HACs), Including Infections for FY 2016

1. Background
    Section 1886(d)(4)(D) of the Act addresses certain hospital-
acquired conditions (HACs), including infections. This provision is 
part of an array of Medicare tools that we are using to promote 
increased quality and efficiency of care. Under the IPPS, hospitals are 
encouraged to treat patients efficiently because they receive the same 
DRG payment for stays that vary in length and in the services provided, 
which gives hospitals an incentive to avoid unnecessary costs in the 
delivery of care. In some cases, conditions acquired in the hospital do 
not generate higher payments than the hospital would otherwise receive 
for cases without these conditions. To this extent, the IPPS encourages 
hospitals to avoid complications.
    However, the treatment of these conditions can generate higher 
Medicare payments in two ways. First, if a hospital incurs 
exceptionally high costs treating a patient, the hospital stay may 
generate an outlier payment. However, because the outlier payment 
methodology requires that hospitals experience large losses on outlier 
cases before outlier payments are made, hospitals have an incentive to 
prevent outliers. Second, under the MS-DRG system that took effect in 
FY 2008 and that has been refined through rulemaking in subsequent 
years, certain conditions can generate higher payments even if the 
outlier payment requirements are not met. Under the MS-DRG system, 
there are currently 261 sets of MS-DRGs that are split into 2 or 3 
subgroups based on the presence or absence of a complication or 
comorbidity (CC) or a major complication or comorbidity (MCC). The 
presence of a CC or an MCC generally results in a higher payment.
    Section 1886(d)(4)(D) of the Act specifies that, by October 1, 
2007, the Secretary was required to select, in consultation with the 
Centers for Disease Control and Prevention (CDC), at least two 
conditions that: (a) Are high cost, high volume, or both; (b) are 
assigned to a higher paying MS-DRG when present as a secondary 
diagnosis (that is, conditions under the MS-DRG system that are CCs or 
MCCs); and (c) could reasonably have been prevented through the 
application of evidence-based guidelines. Section 1886(d)(4)(D) of the 
Act also specifies that the list of conditions may be revised, again in 
consultation with the CDC, from time to time as long as the list 
contains at least two conditions.
    Effective for discharges occurring on or after October 1, 2008, 
under the authority of section 1886(d)(4)(D) of the Act, Medicare no 
longer assigns an inpatient hospital discharge to a higher paying MS-
DRG if a selected condition is not present on admission (POA). Thus, if 
a selected condition that was not POA manifests during the hospital 
stay, it is considered a HAC and the case is paid as though the 
secondary diagnosis was not present. However, even if a HAC manifests 
during the hospital stay, if any nonselected CC or MCC appears on the 
claim, the claim will be paid at the higher MS-DRG rate. In addition, 
Medicare continues to assign a discharge to a higher paying MS-DRG if a 
selected condition is POA. When a HAC is not POA, payment can be 
affected in a manner shown in the diagram below.

[[Page 49351]]

[GRAPHIC] [TIFF OMITTED] TR17AU15.000

2. HAC Selection
    Beginning in FY 2007, we have set forth proposals, and solicited 
and responded to public comments, to implement section 1886(d)(4)(D) of 
the Act through the IPPS annual rulemaking process. For specific 
policies addressed in each rulemaking cycle, including a detailed 
discussion of the collaborative interdepartmental process and public 
input regarding selected and potential candidate HACs, we refer readers 
to the following rules: The FY 2007 IPPS proposed rule (71 FR 24100) 
and final rule (71 FR 48051 through 48053); the FY 2008 IPPS proposed 
rule (72 FR 24716 through 24726) and final rule with comment period (72 
FR 47200 through 47218); the FY 2009 IPPS proposed rule (73 FR 23547) 
and final rule (73 FR 48471); the FY 2010 IPPS/RY 2010 LTCH PPS 
proposed rule (74 FR 24106) and final rule (74 FR 43782); the FY 2011 
IPPS/LTCH PPS proposed rule (75 FR 23880) and final rule (75 FR 50080); 
the FY 2012 IPPS/LTCH PPS proposed rule (76 FR 25810 through 25816) and 
final rule (76 FR 51504 through 51522); the FY 2013 IPPS/LTCH PPS 
proposed rule (77 FR 27892 through 27898) and final rule (77 FR 53283 
through 53303); the FY 2014 IPPS/LTCH PPS proposed rule (78 FR 27509 
through 27512) and final rule (78 FR 50523 through 50527), and the FY 
2015 IPPS/LTCH PPS proposed rule (79 FR 28000 through 28003) and final 
rule (79 FR 49876 through 49880). A complete list of the 14 current 
categories of HACs is included on the CMS Web site at: http://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/HospitalAcqCond/Hospital-Acquired_Conditions.html.
3. Present on Admission (POA) Indicator Reporting
    Collection of POA indicator data is necessary to identify which 
conditions were acquired during hospitalization for the HAC payment 
provision as well as for broader public health uses of Medicare data. 
In previous rulemaking, we provided both CMS and CDC Web site resources 
that are available to hospitals for assistance in this reporting 
effort. For detailed information regarding these sites and materials, 
including the application and use of POA indicators, we refer the 
reader to the FY 2012 IPPS/LTCH PPS final rule (76 FR 51506 through 
51507).
    Currently, as we have discussed in the prior rulemaking cited under 
section II.I.2. of the preamble of this final rule, the POA indicator 
reporting requirement only applies to IPPS hospitals and Maryland 
hospitals because they are subject to this HAC provision. Non-IPPS 
hospitals, including CAHs, LTCHs, IRFs, IPFs, cancer hospitals, 
children's hospitals, RNHCIs, and the Department of Veterans Affairs/
Department of Defense hospitals, are exempt from POA reporting.
    There are currently four POA indicator reporting options, ``Y'', 
``W'', ``N'', and ``U'', as defined by the ICD-9-CM Official Guidelines 
for Coding and Reporting. We note that prior to January 1, 2011, we 
also used a POA indicator reporting option ``1''. However, beginning on 
or after January 1, 2011, hospitals were required to begin reporting 
POA indicators using the 5010 electronic transmittal standards format. 
The 5010 format removes the need to report a POA indicator of ``1'' for 
codes that are exempt from POA reporting. We issued CMS instructions on 
this reporting change as a One-Time Notification, Pub. No. 100-20, 
Transmittal No. 756, Change Request 7024, effective on August 13, 2010, 
which can be located at the following link on the CMS Web site: http://www.cms.gov/manuals/downloads/Pub100_20.pdf. The current POA indicators 
and their descriptors are shown in the chart below:

------------------------------------------------------------------------
         Indicator                            Descriptor
------------------------------------------------------------------------
Y..........................  Indicates that the condition was present on
                              admission.
W..........................  Affirms that the hospital has determined
                              that, based on data and clinical judgment,
                              it is not possible to document when the
                              onset of the condition occurred.
N..........................  Indicates that the condition was not
                              present on admission.
U..........................  Indicates that the documentation is
                              insufficient to determine if the condition
                              was present at the time of admission.
------------------------------------------------------------------------


[[Page 49352]]

    Under the HAC payment policy, we treat HACs coded with ``Y'' and 
``W'' indicators as POA and allow the condition on its own to cause an 
increased payment at the CC and MCC level. We treat HACs coded with 
``N'' and ``U'' indicators as Not Present on Admission (NPOA) and do 
not allow the condition on its own to cause an increased payment at the 
CC and MCC level. We refer readers to the following rules for a 
detailed discussion of POA indicator reporting: The FY 2009 IPPS 
proposed rule (73 FR 23559) and final rule (73 FR 48486 through 48487); 
the FY 2010 IPPS/RY 2010 LTCH PPS proposed rule (74 FR 24106) and final 
rule (74 FR 43784 through 43785); the FY 2011 IPPS/LTCH PPS proposed 
rule (75 FR 23881 through 23882) and final rule (75 FR 50081 through 
50082); the FY 2012 IPPS/LTCH PPS proposed rule (76 FR 25812 through 
25813) and final rule (76 FR 51506 through 51507); the FY 2013 IPPS/
LTCH PPS proposed rule (77 FR 27893 through 27894) and final rule (77 
FR 53284 through 53285); the FY 2014 IPPS/LTCH PPS proposed rule (78 FR 
27510 through 27511) and final rule (78 FR 50524 through 50525), and 
the FY 2015 IPPS/LTCH PPS proposed rule (79 FR 28001 through 28002) and 
final rule (79 FR 49877 through 49878).
    In addition, as discussed previously in the FY 2013 IPPS/LTCH PPS 
final rule (77 FR 53324), the 5010 format allows the reporting and, 
effective January 1, 2011, the processing of up to 25 diagnoses and 25 
procedure codes. As such, it is necessary to report a valid POA 
indicator for each diagnosis code, including the principal diagnosis 
and all secondary diagnoses up to 25.
4. HACs and POA Reporting in Preparation for Transition to ICD-10-CM 
and ICD-10-PCS
    In the FY 2012 IPPS/LTCH PPS final rule (76 FR 51506 and 51507), in 
preparation for the transition to the ICD-10-CM and ICD-10-PCS code 
sets, we indicated that further information regarding the use of the 
POA indicator with the ICD-10-CM/ICD-10-PCS classifications as they 
pertain to the HAC policy would be discussed in future rulemaking.
    At the March 5, 2012 and the September 19, 2012 meetings of the 
ICD-9-CM Coordination and Maintenance Committee, an announcement was 
made with regard to the availability of the ICD-9-CM HAC list 
translation to ICD-10-CM and ICD-10-PCS code sets. Participants were 
informed that the list of the ICD-9-CM selected HACs had been 
translated into codes using the ICD-10-CM and ICD-10-PCS classification 
system. It was recommended that the public review this list of ICD-10-
CM/ICD-10-PCS code translations of the selected HACs available on the 
CMS Web site at: http://www.cms.gov/Medicare/Coding/ICD10/ICD-10-MS-DRG-Conversion-Project.html. We encouraged the public to submit 
comments on these translations through the HACs Web page using the CMS 
ICD-10-CM/PCS HAC Translation Feedback Mailbox that was set up for this 
purpose under the Related Links section titled ``CMS HAC Feedback.'' We 
also encouraged readers to review the educational materials and draft 
code sets available for ICD-10-CM/PCS on the CMS Web site at: http://www.cms.gov/ICD10/. Lastly, we provided information regarding the ICD-
10 MS-DRG Conversion Project on the CMS Web site at: http://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/HospitalAcqCond/icd10_hacs.html.
    In the FY 2014 IPPS/LTCH PPS final rule (78 FR 50525), we stated 
that the final HAC list translation from ICD-9-CM to ICD-10-CM/ICD-10-
PCS would be subject to formal rulemaking. We again encouraged readers 
to review the educational materials and updated draft code sets 
available for ICD-10-CM/ICD-10-PCS on the CMS Web site at: http://www.cms.gov/ICD10/. In addition, we stated that the draft ICD-10-CM 
Coding Guidelines could be viewed on the CDC Web site at: http://www.cdc.gov/nchs/icd/icd10cm.htm.
    However, prior to engaging in rulemaking for the FY 2015 DRA HAC 
program, on April 1, 2014, the Protecting Access to Medicare Act of 
2014 (PAMA) (Pub. L. 113-93) was enacted, which specified that the 
Secretary may not adopt ICD-10 prior to October 1, 2015. Accordingly, 
the U.S. Department of Health and Human Services released a final rule 
in the Federal Register on August 4, 2014 (79 FR 45128 through 45134) 
that included a new compliance date that requires the use of ICD-10 
beginning October 1, 2015. The August 4, 2014 final rule is available 
for viewing on the Internet at: http://www.gpo.gov/fdsys/pkg/FR-2014-08-04/pdf/2014-18347.pdf. That final rule also requires HIPAA covered 
entities to continue to use ICD-9-CM through September 30, 2015. 
Further information on the ICD-10 rules can be found on the CMS Web 
site at: http://www.cms.gov/Medicare/Coding/ICD10/Statute_Regulations.html.
    As described in section II.F.5. of the preamble of this final rule, 
we are implementing the HAC list translations from ICD-9-CM to ICD-10-
CM/ICD-10-PCS in this FY 2016 IPPS/LTCH PPS final rule.
5. Changes to the HAC Program for FY 2016
    As discussed in section II.G. 1. a. of the preamble of this final 
rule, for FY 2016, we are implementing the ICD-10 MS-DRGs Version 33 as 
the replacement logic for the ICD-9-CM MS-DRGs Version 32. As part of 
our DRA HAC update for FY 2016, we proposed to implement the ICD-10-CM/
PCS Version 33 HAC list to replace the ICD-9-CM Version 32 HAC list.
    CMS prepared the ICD-10 MS-DRGs Version 32 based on the FY 2015 MS-
DRGs (Version 32) that we finalized in the FY 2015 IPPS/LTCH PPS final 
rule. In November 2014, we posted a Definitions Manual of the ICD-10 
MS-DRGs Version 32 on the ICD-10 MS-DRG Conversion Project Web site at: 
http://www.cms.hhs.gov/Medicare/Coding/ICD10/ICD-10-MS-DRG-Conversion-Project.html. The HAC code list translations from ICD-9-CM to ICD-10-
CM/PCS are located in Appendix I of the ICD-10-CM/PCS MS-DRG Version 32 
Definitions Manual. The link to this Manual (available in both text and 
HTML formats) is located in the Downloads section of the ICD-10 MS-DRG 
Conversion Project Web site.
    In the FY 2016 IPPS/LTCH PPS proposed rule (80 FR 24348 through 
24349), we solicited public comments on how well the ICD-10-CM/PCS 
Version 32 HAC list replicates the ICD-9-CM Version 32 HAC list. We did 
not receive any public comments on our list of ICD-10 translations for 
the HAC list. Therefore, we are finalizing our proposal to implement 
the ICD-10-CM/PCS Version 33 HAC list to replace the ICD-9-CM Version 
32 HAC list.
    With respect to the current categories of the HACs, in the FY 2016 
IPPS/LTCH PPS proposed rule, we did not propose to add or remove any 
categories for FY 2016.
    Comment: Two commenters suggested that CMS expand the current HAC 
category of Iatrogenic Pneumothorax with Venous Catheterization to 
include Iatrogenic Pneumothorax with Thoracentesis and to also add 
Accidental Puncture/Bleeding with Paracentesis as a HAC category. The 
commenters cited various studies and asserted that both of these 
conditions satisfy the established criteria of being high cost, high 
volume, or both; being assigned to a higher paying MS-DRG when present 
as a secondary diagnosis (that is, conditions under the MS-DRG system 
that are CCs or MCCs); and could reasonably have been prevented through 
the application of evidence-based guidelines. Both commenters also 
listed a series of ICD-10-CM and ICD-10-PCS

[[Page 49353]]

codes that they requested CMS to consider for inclusion in each of 
these recommended new HAC categories. The commenters believed that 
adding these two conditions would improve patient care and result in 
cost savings to the Medicare program.
    Response: We recognize and appreciate the commenters' 
recommendations for refinements to the HAC list. We also thank the 
commenters for their commitment to working with CMS on reducing 
complications resulting in better patient care and cost savings. In the 
FY 2015 IPPS/LTCH PPS final rule (79 FR 49879), we responded to similar 
comments and noted that we would take them under consideration for 
future rulemaking. While we did not propose to expand or add these 
specific HAC categories (Iatrogenic Pneumothorax with Thoracentesis and 
Accidental Puncture/Bleeding with Paracentesis) for FY 2016, in 
response to a public comment received last year, we did engage our 
contractor, RTI, to begin researching available evidence-based 
guidelines for these conditions. As discussed in section II.F.7. of the 
preamble to this final rule, RTI has completed their annual evidence-
based guidelines report and, in addition, has developed a separate 
excerpt report that summarizes the two conditions recommended by the 
commenters under consideration. We encourage readers to review the 
separate document titled, ``Evidence-based Guidelines Pertaining to 
Select Thoracentesis- and Paracentesis-Related Conditions,'' which is 
available via the Internet on the CMS Hospital-Acquired Conditions Web 
page in the ``Downloads'' section at: http://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/HospitalAcqCond/index.html?redirect=/
HospitalAcqCond/ We reiterate that we continue to encourage public 
dialogue about refinements to the HAC list through written stakeholder 
comments.
    We were unable to fully evaluate each of these two recommended 
conditions against all the established criteria, as well as review the 
references the commenters submitted, or perform detailed analysis of 
the ICD-10 codes that the commenters listed in time for discussion in 
this FY 2016 IPPS/LTCH PPS final rule. However, we intend to consider 
these public comments as we develop proposed changes to the HAC-POA 
program for FY 2017.
    Comment: One commenter urged CMS to remove the Falls and Trauma HAC 
category from the HAC-POA program. The commenter stated that the 
statutory criterion that a condition could reasonably have been 
prevented through the application of evidence-based guidelines is not 
met for preventing falls. The commenter also stated that this HAC may 
lead to unintended consequences such as ``creating an epidemic of 
immobility in hospitals'' and excessive orders for bed rest and motion 
detection devices. The commenter recommended that CMS develop quality 
measures and incentivize hospitals to create Acute Care for Elders 
(ACE) units that focus on this specific population as another option. 
According to the commenter, studies of the ACE initiative determined 
better outcomes. For example, the commenter noted results of the ACE 
program model indicated a reduction in falls, delirium, and functional 
decline for patients, as well as shorter lengths of stay in a hospital, 
a decrease in the number of discharges to a nursing home, a reduction 
in 30-day readmissions, and reduced health care costs.
    Response: We acknowledge the commenter's comments regarding the 
Falls and Trauma HAC category. With respect to the commenter's 
statement that one of the statutory criteria (that is, could reasonably 
have been prevented through the application of evidence-based 
guidelines) is not being met for the prevention of falls, we note that, 
as mentioned in response to an earlier comment, our contractor, RTI, 
has completed the 2015 Report for Evidence-Based Guidelines, which is 
available via the Internet on the CMS Hospital-Acquired Conditions Web 
page in the ``Downloads'' section at: http://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/HospitalAcqCond/index.html?redirect=/
HospitalAcqCond/. We further note that evidence-based guidelines for 
falls prevention exist and refer the reader to the findings in this 
report directly related to falls. We also point out that, while the 
commenter requested the removal of the entire Falls and Trauma HAC 
category, falls are only one component (or condition) in the HAC 
category. The Falls and Trauma HAC category also includes conditions 
related to trauma, such as intracranial injuries, crushing injuries, 
burns, and other injuries (for example, frostbite, heat stroke, 
drowning, and suffocation). Therefore, we do not agree with the 
commenter's suggestion to remove the Falls and Trauma HAC category from 
the HAC-POA program.
    In response to the commenter's recommendation that CMS establish 
quality measures and incentive payments for hospitals, we point out 
that currently, under various CMS quality reporting programs, there are 
measures specifically related to falls. On October 6, 2014, the 
Improving Medicare Post-Acute Care Transformation Act of 2014 (the 
IMPACT Act) (Pub. L. 113-185) was enacted, which specified under 
section 1899B(c)(1) of the Act that the Secretary shall require 
postacute care providers to report data on quality measures relating to 
functional status, skin integrity, medication reconciliation and 
incidence of major falls. Prior to the IMPACT Act, the NQF #0674 
measure, Percent of Residents Experiencing One or More Falls with Major 
Injury (Long Stay), was finalized in the LTCHQR Program and the IRF QR 
Program. As such, we believe these measures specified in the IMPACT Act 
align with the CMS Quality Strategy,\4\ which incorporates the three 
broad aims of the National Quality Strategy \5\:
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    \4\ Available at: http://www.coms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/QualityInitiativesGenInfo/CMS-Quality-Strategy.html.
    \5\ Available at: http://www.ahrq.gov/workingforquality/nqs/nqs2011annlrpt.html.
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     Better Care: Improve the overall quality of care by making 
healthcare more patient-centered, reliable, accessible and safe;
     Healthy People, Healthy Communities: Improve the health of 
the U.S. population by supporting proven interventions to address 
behavioral, social and environmental determinants of health in addition 
to delivering higher-quality care; and
     Affordable Care: Reduce the cost of quality healthcare for 
individuals, families, employers, and government.
    Comment: One commenter requested that CMS incorporate untreated 
malnutrition, including disease-related malnutrition, as a HAC 
category. The commenter indicated there are three common types of 
malnutrition diagnoses that can be attributed to adults in healthcare 
settings: (1) Starvation-relation malnutrition; (2) chronic disease-
related malnutrition; and (3) acute disease or injury-related 
malnutrition. The commenter also noted that hospital-acquired 
malnutrition from inadequate feeding practices is widespread. According 
to the commenter, screening patients for the detection of malnutrition 
allows for further follow-up sessions if warranted. In addition, the 
commenter stated that, through the process of early detection, the 
prevention and treatment for disease-related malnutrition will lead to 
improved outcomes such as patients acquiring fewer complications, 
hospitalizations, and readmissions.
    The commenter suggested that CMS also advocate for the creation of 
quality measures that encourage nutrition screening, assessment, and 
intervention to be included in various quality

[[Page 49354]]

reporting programs or other agency initiatives that focus on measuring 
quality of care.
    Response: We appreciate the commenter's suggestion. As stated 
previously, we did not propose to add or remove any HAC categories for 
FY 2016. Therefore, we will consider this topic for future rulemaking. 
We encourage the commenter to submit the specific list of conditions, 
including the ICD-10 coded data identifying the various types of 
malnutrition that the commenter is recommending as a candidate 
condition, along with any additional supporting documentation, for the 
other established criteria for a HAC as referenced earlier in this 
section.
    With regard to the commenter's recommendation to develop quality 
measures related to malnutrition in other quality reporting programs, 
we note that the quality reporting programs that involve measures are 
separate and distinct from the Deficit Reduction Act (DRA) HAC program. 
We refer the reader to section VII. of this FY 2016 IPPS/LTCH PPS final 
rule for information related to those programs.
    We also refer readers to section II.F.6. of the FY 2008 IPPS final 
rule with comment period (72 FR 47202 through 47218) and to section 
II.F.7. of the FY 2009 IPPS final rule (73 FR 48774 through 48491) for 
detailed discussion supporting our determination regarding each of the 
current conditions. We refer readers to the FY 2013 IPPS/LTCH PPS 
proposed rule (77 FR 27892 through 27898) and final rule (77 FR 53285 
through 53292) for the HAC policy for FY 2013, the FY 2014 IPPS/LTCH 
PPS proposed rule (78 FR 27509 through 27512) and final rule (78 FR 
50523 through 50527) for the HAC policy for FY 2014, and the FY 2015 
IPPS/LTCH PPS proposed rule (79 FR 28000 through 28003) and final rule 
(79 FR 49876 through 49880) for the HAC policy for FY 2015.
    After consideration of the public comments we received, as we 
proposed, we are not adding or removing any HAC categories for FY 2016. 
However, as described more fully in section III.F.7. of the preamble of 
this final rule, we will continue to monitor contemporary evidence-
based guidelines for selected, candidate, and previously considered 
HACs that provide specific recommendations for the prevention of the 
corresponding conditions in the acute hospital setting and may use this 
information to inform future rulemaking. In addition, we continue to 
encourage public dialogue about refinements to the HAC list through 
written stakeholder comments.
6. RTI Program Evaluation
    On September 30, 2009, a contract was awarded to RTI to evaluate 
the impact of the Hospital-Acquired Condition-Present on Admission 
(HAC-POA) provisions on the changes in the incidence of selected 
conditions, effects on Medicare payments, impacts on coding accuracy, 
unintended consequences, and infection and event rates. This was an 
intra-agency project with funding and technical support from CMS, OPHS, 
AHRQ, and CDC. The evaluation also examined the implementation of the 
program and evaluated additional conditions for future selection. The 
contract with RTI ended on November 30, 2012. Summary reports of RTI's 
analysis of the FYs 2009, 2010, and 2011 Med PAR data files for the 
HAC-POA program evaluation were included in the FY 2011 IPPS/LTCH PPS 
final rule (75 FR 50085 through 50101), the FY 2012 IPPS/LTCH PPS final 
rule (76 FR 51512 through 51522), and the FY 2013 IPPS/LTCH PPS final 
rule (77 FR 53292 through 53302). Summary and detailed data also were 
made publicly available on the CMS Web site at: http://www.cms.gov/HospitalAcqCond/01_Overview.asp and the RTI Web site at: http://www.rti.org/reports/cms/.
    In addition to the evaluation of HAC and POA Med PAR claims data, 
RTI also conducted analyses on readmissions due to HACs, the 
incremental costs of HACs to the health care system, a study of 
spillover effects and unintended consequences, as well as an updated 
analysis of the evidence-based guidelines for selected and previously 
considered HACs. Reports on these analyses have been made publicly 
available on the CMS Web site at: http://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/HospitalAcqCond/index.html.
7. RTI Reports on Evidence-Based Guidelines
    The RTI program evaluation included a report that provided 
references for all evidence-based guidelines available for each of the 
selected, candidate, and previously considered HACs that provided 
specific recommendations for the prevention of the corresponding 
conditions. Guidelines were primarily identified using the AHRQ 
National Guidelines Clearing House (NGCH) and the CDC, along with 
relevant professional societies. Guidelines published in the United 
States were used, if available. In the absence of U.S. guidelines for a 
specific condition, international guidelines were included.
    RTI prepared a final report to summarize its findings regarding 
these guidelines. This report is titled ``Evidence-Based Guidelines for 
Selected, Candidate, and Previously Considered Hospital-Acquired 
Conditions'' and can be found on the CMS Web site at: http://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/HospitalAcqCond/Downloads/Evidence-Based-Guidelines.pdf.
    Subsequent to this final report, RTI was awarded a new Evidence-
Based Guidelines Monitoring contract. Under this monitoring contract, 
RTI annually provides a summary report of the contemporary evidence-
based guidelines for selected, candidate, and previously considered 
HACs that provide specific recommendations for the prevention of the 
corresponding conditions in the acute care hospital setting. We 
received RTI's 2015 report and are making it available to the public on 
the CMS Hospital-Acquired Conditions Web page in the ``Downloads'' 
section at: http://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/HospitalAcqCond/index.html?redirect=/HospitalAcqCond/.

G. Changes to Specific MS-DRG Classifications

1. Discussion of Changes to Coding System and Basis for MS-DRG Updates
a. Conversion of MS-DRGs to the International Classification of 
Diseases, 10th Revision (ICD-10)
    Providers use the code sets under the ICD-9-CM coding system to 
report diagnoses and procedures for Medicare hospital inpatient 
services under the MS-DRG system. A later coding edition, the ICD-10 
coding system, includes the International Classification of Diseases, 
10th Revision, Clinical Modification (ICD-10-CM) for diagnosis coding 
and the International Classification of Diseases, 10th Revision, 
Procedure Coding System (ICD-10-PCS) for inpatient hospital procedure 
coding, as well as the Official ICD-10-CM and ICD-10-PCS Guidelines for 
Coding and Reporting. The ICD-10 coding system was initially adopted 
for transactions conducted on or after October 1, 2013, as described in 
the Health Insurance Portability and Accountability Act of 1996 (HIPAA) 
Administrative Simplification: Modifications to Medical Data Code Set 
Standards to Adopt ICD-10-CM and ICD-10-PCS Final Rule published in the 
Federal Register on January 16, 2009 (74 FR 3328 through 3362) 
(hereinafter referred to as the ``ICD-10-CM and ICD-10-PCS final 
rule''). However, the Secretary of

[[Page 49355]]

Health and Human Services issued a final rule that delayed the 
compliance date for ICD-10 from October 1, 2013, to October 1, 2014. 
That final rule, entitled ``Administrative Simplification: Adoption of 
a Standard for a Unique Health Plan Identifier; Addition to the 
National Provider Identifier Requirements; and a Change to the 
Compliance Date for ICD-10-CM and ICD-10-PCS Medical Data Code Sets,'' 
CMS-0040-F, was published in the Federal Register on September 5, 2012 
(77 FR 54664) and is available for viewing on the Internet at: http://www.gpo.gov/fdsys/pkg/FR-2012-09-05/pdf/2012-21238.pdf. On April 1, 
2014, the Protecting Access to Medicare Act of 2014 (PAMA) (Pub. L. 
113-93) was enacted, which specified that the Secretary may not adopt 
ICD-10 prior to October 1, 2015. Accordingly, the U.S. Department of 
Health and Human Services released a final rule in the Federal Register 
on August 4, 2014 (79 FR 45128 through 45134) that included a new 
compliance date that requires the use of ICD-10 beginning October 1, 
2015. The August 4, 2014 final rule is available for viewing on the 
Internet at: http://www.gpo.gov/fdsys/pkg/FR-2014-08-04/pdf/2014-18347.pdf. That final rule also requires HIPAA covered entities to 
continue to use ICD-9-CM through September 30, 2015.
    The anticipated move to ICD-10 necessitated the development of an 
ICD-10-CM/ICD-10-PCS version of the MS-DRGs. CMS began a project to 
convert the ICD-9-CM-based MS-DRGs to ICD-10 MS-DRGs. In response to 
the FY 2011 IPPS/LTCH PPS proposed rule, we received public comments on 
the creation of the ICD-10 version of the MS-DRGs, which will be 
implemented at the same time as ICD-10 (75 FR 50127 and 50128). While 
we did not propose an ICD-10 version of the MS-DRGs in the FY 2011 
IPPS/LTCH PPS proposed rule, we noted that we have been actively 
involved in converting current MS-DRGs from ICD-9-CM codes to ICD-10 
codes and sharing this information through the ICD-10 (previously ICD-
9-CM) Coordination and Maintenance Committee. We undertook this early 
conversion project to assist other payers and providers in 
understanding how to implement their own conversion projects. We posted 
ICD-10 MS-DRGs based on Version 26.0 (FY 2009) of the MS-DRGs. We also 
posted a paper that describes how CMS went about completing this 
project and suggestions for other payers and providers to follow. 
Information on the ICD-10 MS-DRG conversion project can be found on the 
ICD-10 MS-DRG Conversion Project Web site at: http://www.cms.hhs.gov/Medicare/Coding/ICD10/ICD-10-MS-DRG-Conversion-Project.html. We have 
continued to keep the public updated on our maintenance efforts for 
ICD-10-CM and ICD-10-PCS coding systems, as well as the General 
Equivalence Mappings that assist in conversion through the ICD-10 
(previously ICD-9-CM) Coordination and Maintenance Committee. 
Information on these committee meetings can be found on the CMS Web 
site at: http://www.cms.gov/Medicare/Coding/ICD9ProviderDiagnosticCodes/index.html.
    During FY 2011, we developed and posted Version 28 of the ICD-10 
MS-DRGs based on the FY 2011 MS-DRGs (Version 28) that we finalized in 
the FY 2011 IPPS/LTCH PPS final rule on the CMS Web site. This ICD-10 
MS-DRGs Version 28 also included the CC Exclusion List and the ICD-10 
version of the hospital-acquired conditions (HACs), which was not 
posted with Version 26. We also discussed this update at the September 
15-16, 2010 and the March 9-10, 2011 meetings of the ICD-9-CM 
Coordination and Maintenance Committee. The minutes of these two 
meetings are posted on the CMS Web site at: http://www.cms.gov/Medicare/Coding/ICD9ProviderDiagnosticCodes/index.html.
    We reviewed public comments on the ICD-10 MS-DRGs Version 28 and 
made updates as a result of these comments. We called the updated 
version the ICD-10 MS-DRGs Version 28-R1. We posted a Definitions 
Manual of ICD-10 MS-DRGs Version 28-R1 on our ICD-10 MS-DRG Conversion 
Project Web site. To make the review of Version 28-R1 updates easier 
for the public, we also made available pilot software on a CD ROM that 
could be ordered through the National Technical Information Service 
(NTIS). A link to the NTIS ordering page was provided on the CMS ICD-10 
MS-DRGs Web page. We stated that we believed that, by providing the 
ICD-10 MS-DRGs Version 28-R1 Pilot Software (distributed on CD ROM), 
the public would be able to more easily review and provide feedback on 
updates to the ICD-10 MS-DRGs. We discussed the updated ICD-10 MS-DRGs 
Version 28-R1 at the September 14, 2011 ICD-9-CM Coordination and 
Maintenance Committee meeting. We encouraged the public to continue to 
review and provide comments on the ICD-10 MS-DRGs so that CMS could 
continue to update the system.
    In FY 2012, we prepared the ICD-10 MS-DRGs Version 29, based on the 
FY 2012 MS-DRGs (Version 29) that we finalized in the FY 2012 IPPS/LTCH 
PPS final rule. We posted a Definitions Manual of ICD-10 MS-DRGs 
Version 29 on our ICD-10 MS-DRG Conversion Project Web site. We also 
prepared a document that describes changes made from Version 28 to 
Version 29 to facilitate a review. The ICD-10 MS-DRGs Version 29 was 
discussed at the ICD-9-CM Coordination and Maintenance Committee 
meeting on March 5, 2012. Information was provided on the types of 
updates made. Once again, the public was encouraged to review and 
comment on the most recent update to the ICD-10 MS-DRGs.
    CMS prepared the ICD-10 MS-DRGs Version 30 based on the FY 2013 MS-
DRGs (Version 30) that we finalized in the FY 2013 IPPS/LTCH PPS final 
rule. We posted a Definitions Manual of the ICD-10 MS-DRGs Version 30 
on our ICD-10 MS-DRG Conversion Project Web site. We also prepared a 
document that describes changes made from Version 29 to Version 30 to 
facilitate a review. We produced mainframe and computer software for 
Version 30, which was made available to the public in February 2013. 
Information on ordering the mainframe and computer software through 
NTIS was posted on the ICD-10 MS-DRG Conversion Project Web site. The 
ICD-10 MS-DRGs Version 30 computer software facilitated additional 
review of the ICD-10 MS-DRGs conversion.
    We provided information on a study conducted on the impact of 
converting MS-DRGs to ICD-10. Information on this study is summarized 
in a paper entitled ``Impact of the Transition to ICD-10 on Medicare 
Inpatient Hospital Payments.'' This paper was posted on the CMS ICD-10 
MS-DRGs Conversion Project Web site and was distributed and discussed 
at the September 15, 2010 ICD-9-CM Coordination and Maintenance 
Committee meeting. The paper described CMS' approach to the conversion 
of the MS-DRGs from ICD-9-CM codes to ICD-10 codes. The study was 
undertaken using the ICD-9-CM MS-DRGs Version 27 (FY 2010), which was 
converted to the ICD-10 MS-DRGs Version 27. The study estimated the 
impact on aggregate payment to hospitals and the distribution of 
payments across hospitals. The impact of the conversion from ICD-9-CM 
to ICD-10 on Medicare MS-DRG hospital payments was estimated using FY 
2009 Medicare claims data. The study found a hospital payment increase 
of 0.05 percent using the ICD-10 MS-DRGs Version 27.
    CMS provided an overview of this hospital payment impact study at 
the March 5, 2012 ICD-9-CM Coordination and Maintenance Committee 
meeting.

[[Page 49356]]

This presentation followed presentations on the creation of ICD-10 MS-
DRGs Version 29. A summary report of this meeting can be found on the 
CMS Web site at: http://www.cms.gov/Medicare/Coding/ICD9ProviderDiagnosticCodes/index.html. At the March 2012 meeting, CMS 
announced that it would produce an update on this impact study based on 
an updated version of the ICD-10 MS-DRGs. This update of the impact 
study was presented at the March 5, 2013 ICD-9-CM Coordination and 
Maintenance Committee meeting. The study found that moving from an ICD-
9-CM-based system to an ICD-10 MS-DRG replicated system would lead to 
DRG reassignments on only 1 percent of the 10 million MedPAR sample 
records used in the study. Ninety-nine percent of the records did not 
shift to another MS-DRG when using an ICD-10 MS-DRG system. For the 1 
percent of the records that shifted, 45 percent of the shifts were to a 
higher weighted MS-DRG, while 55 percent of the shifts were to lower 
weighted MS-DRGs. The net impact across all MS-DRGs was a reduction by 
4/10000 or minus 4 pennies per $100. The updated paper is posted on the 
CMS Web site at: http://www.cms.gov/Medicare/Coding/ICD10/ICD-10-MS-DRG-Conversion-Project.html under the ``Downloads'' section. 
Information on the March 5, 2013 ICD-9-CM Coordination and Maintenance 
Committee meeting can be found on the CMS Web site at: http://www.cms.gov/Medicare/Coding/ICD9ProviderDiagnosticCodes/ICD-9-CM-C-and-M-Meeting-Materials.html. This update of the impact paper and the ICD-
10 MS-DRG Version 30 software provided additional information to the 
public who were evaluating the conversion of the MS-DRGs to ICD-10 MS-
DRGs.
    CMS prepared the ICD-10 MS-DRGs Version 31.0 based on the FY 2014 
MS-DRGs (Version 31) that we finalized in the FY 2014 IPPS/LTCH PPS 
final rule. In November 2013, we posted a Definitions Manual of the 
ICD-10 MS-DRGs Version 31 on the ICD-10 MS-DRG Conversion Project Web 
site at: http://www.cms.gov/Medicare/Coding/ICD10/ICD-10-MS-DRG-Conversion-Project.html. We also prepared a document that described 
changes made from Version 30 to Version 31 to facilitate a review. We 
produced mainframe and computer software for Version 31, which was made 
available to the public in December 2013. Information on ordering the 
mainframe and computer software through NTIS was posted on the CMS Web 
site at: http://www.cms.gov/Medicare/Coding/ICD10/ICD-10-MS-DRG-Conversion-Project.html under the ``Related Links'' section. This ICD-
10 MS-DRGs Version 31 computer software facilitated additional review 
of the ICD-10 MS-DRGs conversion. We encouraged the public to submit to 
CMS any comments on areas where they believed the ICD-10 MS-DRGs did 
not accurately reflect grouping logic found in the ICD-9-CM MS-DRGs 
Version 31.
    We reviewed public comments received and developed an update of 
ICD-10 MS-DRGs Version 31, which we called ICD-10 MS-DRGs Version 31.0-
R. We made available a Definitions Manual of the ICD-10 MS-DRGs Version 
31.0-R on the ICD-10 MS-DRG Conversion Project Web site at: http://www.cms.gov/Medicare/Coding/ICD10/ICD-10-MS-DRG-Conversion-Project.html. We also prepared a document that describes changes made 
from Version 31 to Version 31-R to facilitate a review. We will 
continue to share ICD-10-MS-DRG conversion activities with the public 
through this Web site.
    CMS prepared the ICD-10 MS-DRGs Version 32 based on the FY 2015 MS-
DRGs (Version 32) that we finalized in the FY 2015 IPPS/LTCH PPS final 
rule. In November 2014, we made available a Definitions Manual of the 
ICD-10 MS DRGs Version 32 on the ICD-10 MS-DRG Conversion Project Web 
site at: http://www.cms.gov/Medicare/Coding/ICD10/ICD-10-MS-DRG-Conversion-Project.html. We also prepared a document that described 
changes made from Version 31-R to Version 32 to facilitate a review. We 
produced mainframe and computer software for Version 32, which was made 
available to the public in January 2015. Information on ordering the 
mainframe and computer software through NTIS was made available on the 
CMS Web site at: http://www.cms.gov/Medicare/Coding/ICD10/ICD-10-MS-DRG-Conversion-Project.html under the ``Related Links'' section. This 
ICD-10 MS-DRGs Version 32 computer software facilitated additional 
review of the ICD-10 MS-DRGs conversion. We encouraged the public to 
submit to CMS any comments on areas where they believed the ICD-10 MS-
DRGs did not accurately reflect grouping logic found in the ICD-9-CM 
MS-DRGs Version 32. We discuss five requests from the public to update 
the ICD-10 MS-DRGs Version 32 to better replicate the ICD-9-CM MS-DRGs 
in section II.G.3., 4., and 5. of the preamble of this FY 2016 IPPS/
LTCH PPS final rule. In the FY 2016 IPPS/LTCH PPS proposed rule (80 FR 
24351), we proposed to implement the MS-DRG code logic in the ICD-10 
MS-DRGs Version 32 along with any finalized updates to the ICD-10 MS-
DRGs Version 32 for the final ICD-10 MS-DRGs Version 33. In the 
proposed rule, we proposed the ICD-10 MS-DRGs Version 33 as the 
replacement logic for the ICD-9-CM based MS-DRGs Version 32 as part of 
the proposed MS-DRG updates for FY 2016. We invited public comments on 
how well the ICD-10 MS-DRGs Version 32 replicates the logic of the MS-
DRGs Version 32 based on ICD-9-CM codes.
    Comment: One commenter addressed an ICD-10 MS-DRG replication issue 
regarding the procedure code designation and MS-DRG assignment of two 
ICD-10-PCS codes in the ICD-10 MS-DRGs Version 32 Definitions Manual 
under Appendix E--Operating Room Procedures and Procedure Code MS-DRG 
Index. The commenter agreed with CMS that the two ICD-10-PCS codes 
identified in the FY 2016 IPPS/LTCH PPS proposed rule, 02HQ30Z 
(Insertion of pressure sensor monitoring device into right pulmonary 
artery, percutaneous approach) and 02HR30Z (Insertion of pressure 
sensor monitoring device into left pulmonary artery, percutaneous 
approach), were appropriate translations for ICD-9-CM procedure code 
38.26 (Insertion of implantable wireless pressure sensor without lead 
for intracardiac or great vessel hemodynamic monitoring), which 
identifies the CardioMEMSTM HF Monitoring System (80 FR 
24426). However, the commenter noted that, under the ICD-9-CM based MS-
DRGs Version 32 logic, procedure code 38.26 is designated as an 
operating room (O.R.) procedure for MS-DRG assignment and group to MS-
DRG 264 (Other Circulatory O.R. Procedures), while under the ICD-10 
based MS-DRGs Version 32 logic, the two ICD-10-PCS code translations 
are not recognized as O.R. procedures for purposes of MS-DRG 
assignment. Therefore, the commenter requested that the two ICD-10-PCS 
codes be designated as O.R. procedures within Appendix E of the ICD-10 
MS-DRG Definitions Manual and group to ICD-10 MS-DRG 264 to accurately 
replicate the ICD-9-CM MS-DRG Version 32 logic.
    Response: We agree with the commenter that this is an ICD-10 MS-DRG 
replication error. ICD-10-PCS codes 02HQ30Z and 02HR30Z, along with the 
other ICD-10-PCS codes describing the insertion of a pressure sensor 
monitoring device that are also appropriate translations for ICD-9-CM 
procedure code 38.26, should be designated as O.R. procedures within 
Appendix E of the ICD-10 MS-DRG

[[Page 49357]]

Definitions Manual and assigned to ICD-10 MS-DRG 264 to accurately 
replicate the ICD-9-CM MS-DRGs Version 32 logic. These other ICD-10-PCS 
codes describe the insertion of a pressure sensor monitoring device 
utilizing an open approach or a percutaneous endoscopic approach (for 
the right or left pulmonary artery). Therefore, to be consistent with 
the comparable ICD-10-PCS code translations describing a percutaneous 
approach and to accurately replicate the ICD-9-CM MS-DRGs Version 32 
logic for ICD-9-CM procedure code 38.26, the ICD-10-PCS codes listed 
below that describe the insertion of a pressure sensor monitoring 
device utilizing an open approach or a percutaneous endoscopic approach 
(for the right or left pulmonary artery) should also be designated as 
O.R. procedures and assigned to ICD-10 MS-DRG 264.
    After consideration of the public comments we received, as final 
policy for the FY 2016 ICD-10 MS-DRGs Version 33, we are designating 
the following ICD-10-PCS codes as O.R. procedures and assigning them to 
ICD-10 MS-DRG 264:
     02HQ00Z (Insertion of pressure sensor monitoring device 
into right pulmonary artery, open approach);
     02HQ30Z (Insertion of pressure sensor monitoring device 
into right pulmonary artery, percutaneous approach);
     02HQ40Z (Insertion of pressure sensor monitoring device 
into right pulmonary artery, percutaneous endoscopic approach);
     02HR00Z (Insertion of pressure sensor monitoring device 
into left pulmonary artery, open approach);
     02HR30Z (Insertion of pressure sensor monitoring device 
into left pulmonary artery, percutaneous approach); and
     02HR40Z (Insertion of pressure sensor monitoring device 
into left pulmonary artery, percutaneous endoscopic approach).
    Comment: One commenter addressed an ICD-10 MS-DRG replication issue 
concerning excisional debridements of deep pressure ulcers of the 
ankle. The commenter recommended that the following two ICD-10-PCS 
codes be added to ICD-10 MS-DRG 581 (Other Skin, Subcutaneous Tissue 
and Breast Procedures without CC/MCC) to accurately replicate the ICD-
9-CM MS-DRG logic: ICD-10-PCS procedure code 0LBT0ZZ (Excision of left 
ankle tendon, open approach) and ICD-10-PCS procedure code 0LBS0ZZ 
(Excision of right ankle tendon, open approach). The commenter stated 
that the ICD-9-CM procedure codes describing the excisional 
debridements of pressure ulcers that extend down into the ankle tendon 
are currently assigned to MS-DRG 581. However, the ICD-10-PCS codes 
capturing these procedures are not in the ICD-10-PCS MS-DRG 581.
    Response: We agree with the commenter that this is an ICD-10 MS-DRG 
replication error. ICD-9-CM code 83.39 (Excision of lesion of other 
soft tissue) captures this procedure and is assigned to ICD-9 MS-DRGs 
579, 580, and 581 (Other Skin, Subcutaneous Tissue and Breast 
Procedures with MCC, with CC, and without CC/MCC, respectively). 
Therefore, ICD-10-PCS codes 0LBT0ZZ and 0LBS0ZZ also should be assigned 
to ICD-10 MS-DRGs 579, 580, and 581.
    After consideration of the public comments received, we are 
assigning ICD-10-PCS procedure codes 0LBT0ZZ (Excision of left ankle 
tendon, open approach) and 0LBS0ZZ (Excision of right ankle tendon, 
open approach) to ICD-10 MS-DRGs 579, 580, and 581 (Other Skin, 
Subcutaneous Tissue and Breast Procedures with MCC, with CC, and 
without CC/MCC, respectively).
    Comment: One commenter addressing an ICD-10 MS-DRG replication 
issue requested that CMS add the following four post-delivery procedure 
codes to the ICD-10 version of MS-DRGs 774 and 775 (Vaginal Delivery 
with and without Complicating Diagnoses, respectively) under the ``Only 
Operating Room Procedures'' section. The commenter stated that these 
codes are currently assigned to the ICD-9-CM version of MS-DRGs 774 and 
775.
     0HBJXZZ (Excision of left upper leg skin, external 
approach);
     0DQR0ZZ (Repair anal sphincter, open approach (3rd degree 
obstetrical laceration repair);
     OUQJXZZ (Repair clitoris, external approach); and
     0UBMXZZ (Excision of vulva, external approach).
    The following table shows the equivalent ICD-9-CM codes provided by 
the requestor.

------------------------------------------------------------------------
       ICD-10-PCS Procedure code             ICD-9-CM Procedure code
------------------------------------------------------------------------
0UBMXZZ (Excision of vulva, external     71.3 (Other local excision or
 approach).                               destruction of vulva and
                                          perineum).
0DQR0ZZ (Repair anal sphincter, open     75.61(Repair of current
 approach (3rd degree obstetrical         obstetric laceration of rectum
 laceration repair).                      and sphincter ani).
0UQJXZZ (Repair clitoris, external       75.69 (Repair of current
 approach).                               obstetric laceration).
0HBJXZZ (Excision of left upper leg      86.3 (Local excision/
 skin, external approach).                destruction of lesion/tissue
                                          of skin and subcutaneous
                                          tissues).
------------------------------------------------------------------------

    Response: We examined the list of post-delivery procedure codes in 
ICD-9 MS-DRGs 774 and 775 under the ``Only Operating Room Procedures'' 
section and found that ICD-9-CM procedure code 71.3 is included. 
Therefore, we agree with the commenter that this oversight is a 
replication error and that ICD-10-PCS procedure code 0UBMXZZ should be 
assigned to ICD-10 MS-DRGs 774 and 775 under the ``Only Operating Room 
Procedures'' section. However, with regard to ICD-9-CM procedure codes 
75.61, 75.69, and 86.3, when we examined the list of post-delivery 
procedure codes in MS-DRGs 774 and 775 under the ``Only Operating Room 
Procedures'' section, we found that they were not included. Therefore, 
we disagree with adding ICD-10-PCS codes 0DQR0ZZ, 0UQJXZZ, and 0HBJXZZ 
to ICD-10 MS-DRGs 774 and 775 under the ``Only operating room 
Procedures'' section because these procedures are not currently 
captured in ICD-9 MS-DRGs 774 and 775. The omission of these three ICD-
10-PCS codes is not an ICD-10 MS-DRG replication error.
    After consideration of the public comments received, we are 
assigning ICD-10-PCS code 0UBMXZZ (Excision of vulva, external 
approach) to ICD-10 MS-DRGs 774 and 775 (Vaginal Delivery with and 
without Complicating Diagnoses, respectively) under the ``Only 
Operating Room Procedures'' section.
b. Basis for FY 2016 MS-DRG Updates
    CMS encourages input from our stakeholders concerning the annual 
IPPS updates when that input is made available to us by December 7 of 
the year prior to the next annual proposed rule update. For example, to 
be considered for any updates or changes in FY 2016, comments and 
suggestions should have been submitted by December 7, 2014. The 
comments that were submitted in a timely manner for

[[Page 49358]]

FY 2016 are discussed below in this section.
    Following are the changes we proposed to the MS-DRGs and our 
finalized policies for FY 2016. We invited public comments on each of 
the MS-DRG classification proposed changes described below, as well as 
our proposals to maintain certain existing MS-DRG classifications, 
which also are discussed below. In some cases, we proposed changes to 
the MS-DRG classifications based on our analysis of claims data. In 
other cases, we proposed to maintain the existing MS-DRG classification 
based on our analysis of claims data. For the FY 2016 proposed rule, 
our MS-DRG analysis was based on claims data from the December 2014 
update of the FY 2014 MedPAR file, which contains hospital bills 
received through September 30, 2014, for discharges occurring through 
September 30, 2014. In our discussion of the MS-DRG reclassification 
changes that follows, we refer to our analysis of claims data from the 
``December 2014 update of the FY 2014 MedPAR file.''
    As explained in previous rulemaking (76 FR 51487), in deciding 
whether to propose and to make further modification to the MS-DRGs for 
particular circumstances brought to our attention, we consider whether 
the resource consumption and clinical characteristics of the patients 
with a given set of conditions are significantly different than the 
remaining patients in the MS-DRG. We evaluate patient care costs using 
average costs and lengths of stay and rely on the judgment of our 
clinical advisors to decide whether patients are clinically distinct or 
similar to other patients in the MS-DRG. In evaluating resource costs, 
we consider both the absolute and percentage differences in average 
costs between the cases we select for review and the remainder of cases 
in the MS-DRG. We also consider variation in costs within these groups; 
that is, whether observed average differences are consistent across 
patients or attributable to cases that are extreme in terms of costs or 
length of stay, or both. Furthermore, we consider the number of 
patients who will have a given set of characteristics and generally 
prefer not to create a new MS-DRG unless it would include a substantial 
number of cases.
    In our examination of the claims data, we apply the following 
criteria established in FY 2008 (72 FR 47169) to determine if the 
creation of a new complication or comorbidity (CC) or major 
complication or comorbidity (MCC) subgroup within a base MS-DRG is 
warranted:
     A reduction in variance of costs of at least 3 percent.
     At least 5 percent of the patients in the MS-DRG fall 
within the CC or MCC subgroup.
     At least 500 cases are in the CC or MCC subgroup.
     There is at least a 20-percent difference in average costs 
between subgroups.
     There is a $2,000 difference in average costs between 
subgroups.
    In order to warrant creation of a CC or MCC subgroup within a base 
MS-DRG, the subgroup must meet all five of the criteria.
2. MDC 1 (Diseases and Disorders of the Nervous System): Endovascular 
Embolization (Coiling) Procedures
    We received a request again this year to change the MS-DRG 
assignment for endovascular embolization (coiling) procedures. This 
topic was discussed previously in the FY 2015 IPPS/LTCH PPS proposed 
rule (79 FR 28005 through 28006) and in the FY 2015 IPPS/LTCH PPS final 
rule (79 FR 49883 through 49886). For FY 2015, we did not change the 
MS-DRG assignment for endovascular embolization (coiling) procedures.
    After issuance of the FY 2015 IPPS/LTCH PPS final rule, we received 
a modified request from the commenter asking that CMS consider 
establishing four new MS-DRGs:
     Recommended MS-DRG XXX (Endovascular Intracranial 
Embolization Procedures with Principal Diagnosis of Hemorrhage);
     Recommended MS-DRG XXX (Endovascular Intracranial 
Embolization Procedures without Principal Diagnosis of Hemorrhage with 
MCC);
     Recommended MS-DRG XXX (Endovascular Intracranial 
Embolization Procedures without Principal Diagnosis of Hemorrhage with 
CC); and
     Recommended MS-DRG XXX (Endovascular Intracranial 
Embolization Procedures without Principal Diagnosis of Hemorrhage 
without CC/MCC).
    The requestor stated that establishing these new suggested MS-DRGs 
will promote clinical cohesiveness and resource comparability. The 
requestor stated that endovascular intracranial and endovascular 
embolization procedures are not similar to the open craniotomy 
procedures with which they are currently grouped. The requestor 
asserted that the differences in costs between endovascular 
intracranial procedures and open craniotomy procedures are significant, 
reflecting, for instance, the use of an operating suite versus an 
interventional vascular catheterization laboratory suite, intensive 
care and other costs.
    In conjunction with the recommended new MS-DRGs, the requestor 
recommended that the following ICD-9-CM codes, which include 
endovascular embolization procedures and additional intracranial 
procedures, be removed from MS-DRG 020 (Intracranial Vascular 
Procedures with Principal Diagnosis of Hemorrhage with MCC); MS-DRG 021 
(Intracranial Vascular Procedures with Principal Diagnosis of 
Hemorrhage with CC); MS-DRG 022 (Intracranial Vascular Procedures with 
Principal Diagnosis of Hemorrhage without CC/MCC); MS-DRG 023 
(Craniotomy with Major Device Implant/Acute Complex CNS Principal 
Diagnosis with MCC or Chemo Implant); MS-DRG 024 (Craniotomy with Major 
Device Implant/Acute Complex CNS Principal Diagnosis without MCC); MS-
DRG 025 (Craniotomy & Endovascular Intracranial Procedures with MCC); 
MS-DRG 026 (Craniotomy & Endovascular Intracranial Procedures with CC); 
and MS-DRG 027 (Craniotomy & Endovascular Intracranial Procedures 
without CC/MCC):
     00.62 (Percutaneous angioplasty of intracranial vessel);
     39.72 (Endovascular (total) embolization or occlusion of 
head and neck vessels);
     39.74 (Endovascular removal of obstruction from head and 
neck vessel(s));
     39.75 (Endovascular embolization or occlusion of vessel(s) 
of head or neck using bare coils);
     39.76 (Endovascular embolization or occlusion of vessel(s) 
of head or neck using bioactive coils); and
     39.79 (Other endovascular procedures on other vessels).
    The requestor asked that the four new requested MS-DRGs be created 
using these procedure codes. The requestor suggested that the first 
requested new MS-DRG would be MS-DRG XXX (Endovascular Intracranial 
Embolization Procedures with Principal Diagnosis of Hemorrhage). The 
principal diagnoses for hemorrhage would include the same hemorrhage 
codes in the current MS-DRGs 020, 021, and 022, which are as follows:
     094.87 (Syphilitic ruptured cerebral aneurysm);
     430 (Subarachnoid hemorrhage);
     431 (Intracerebral hemorrhage);
     432.0 (Nontraumatic extradural hemorrhage);
     432.1 (Subdural hemorrhage); and
     432.9 (Unspecified intracranial hemorrhage).
    For this first new requested MS-DRG, the requestor suggested that 
only the

[[Page 49359]]

following endovascular embolization procedure codes would be assigned:
     39.72 (Endovascular (total) embolization or occlusion of 
head and neck vessels);
     39.75 (Endovascular embolization or occlusion of vessel(s) 
of head or neck using bare coils); and
     39.76 (Endovascular embolization or occlusion of vessel(s) 
of head or neck using bioactive coils).
    The requestor recommended that the three additional new MS-DRGs 
would consist of a new base MS-DRG subdivided into three severity 
levels as follows:
     Recommended MS-DRG XXX (Endovascular Intracranial 
Embolization Procedures without Principal Diagnosis of Hemorrhage with 
MCC);
     Recommended MS-DRG XXX (Endovascular Intracranial 
Embolization Procedures without Principal Diagnosis of Hemorrhage with 
CC); and
     Recommended MS-DRG XXX (Endovascular Intracranial 
Embolization Procedures without Principal Diagnosis of Hemorrhage 
without CC/MCC).
    The requestor suggested that these three new recommended MS-DRGs 
would have endovascular embolization procedures as well as additional 
percutaneous and endovascular procedures as listed below:
     00.62 (Percutaneous angioplasty of intracranial vessel);
     39.72 (Endovascular (total) embolization or occlusion of 
head and neck vessels);
     39.74 (Endovascular removal of obstruction from head and 
neck vessel(s));
     39.75 (Endovascular embolization or occlusion of vessel(s) 
of head or neck using bare coils);
     39.76 (Endovascular embolization or occlusion of vessel(s) 
of head or neck using bioactive coils); and
     39.79 (Other endovascular procedures on other vessels).
    ICD-10-PCS provides the following more detailed codes for 
endovascular embolization, which are assigned to MS-DRGs 020, 021, 022, 
023, 024, 025, 026, and 027 in the ICD-10 MS-DRGs Version 32:

 ICD-10-PCS Codes for Endovascular Embolization Assigned to MS-DRGs 020
                Through 027 in ICD-10 MS-DRGs Version 32
------------------------------------------------------------------------
     ICD-10-PCS Code                      Code description
------------------------------------------------------------------------
03LG3BZ..................  Occlusion of intracranial artery with
                            bioactive intraluminal device, percutaneous
                            approach.
03LG3DZ..................  Occlusion of intracranial artery with
                            intraluminal device, percutaneous approach.
03LG4BZ..................  Occlusion of intracranial artery with
                            bioactive intraluminal device, percutaneous
                            endoscopic approach.
03LG4DZ..................  Occlusion of intracranial artery with
                            intraluminal device, percutaneous endoscopic
                            approach.
03LH3BZ..................  Occlusion of right common carotid artery with
                            bioactive intraluminal device, percutaneous
                            approach.
03LH3DZ..................  Occlusion of right common carotid artery with
                            intraluminal device, percutaneous approach.
03LH4BZ..................  Occlusion of right common carotid artery with
                            bioactive intraluminal device, percutaneous
                            endoscopic approach.
03LH4DZ..................  Occlusion of right common carotid artery with
                            intraluminal device, percutaneous endoscopic
                            approach.
03LJ3BZ..................  Occlusion of left common carotid artery with
                            bioactive intraluminal device, percutaneous
                            approach.
03LJ3DZ..................  Occlusion of left common carotid artery with
                            intraluminal device, percutaneous approach.
03LJ4BZ..................  Occlusion of left common carotid artery with
                            bioactive intraluminal device, percutaneous
                            endoscopic approach.
03LJ4DZ..................  Occlusion of left common carotid artery with
                            intraluminal device, percutaneous endoscopic
                            approach.
03LK3BZ..................  Occlusion of right internal carotid artery
                            with bioactive intraluminal device,
                            percutaneous approach.
03LK3DZ..................  Occlusion of right internal carotid artery
                            with intraluminal device, percutaneous
                            approach.
03LK4BZ..................  Occlusion of right internal carotid artery
                            with bioactive intraluminal device,
                            percutaneous endoscopic approach.
03LK4DZ..................  Occlusion of right internal carotid artery
                            with intraluminal device, percutaneous
                            endoscopic approach.
03LL3BZ..................  Occlusion of left internal carotid artery
                            with bioactive intraluminal device,
                            percutaneous approach.
03LL3DZ..................  Occlusion of left internal carotid artery
                            with intraluminal device, percutaneous
                            approach.
03LL4BZ..................  Occlusion of left internal carotid artery
                            with bioactive intraluminal device,
                            percutaneous endoscopic approach.
03LL4DZ..................  Occlusion of left internal carotid artery
                            with intraluminal device, percutaneous
                            endoscopic approach.
03LM3BZ..................  Occlusion of right external carotid artery
                            with bioactive intraluminal device,
                            percutaneous approach.
03LM3DZ..................  Occlusion of right external carotid artery
                            with intraluminal device, percutaneous
                            approach.
03LM4BZ..................  Occlusion of right external carotid artery
                            with bioactive intraluminal device,
                            percutaneous endoscopic approach.
03LM4DZ..................  Occlusion of right external carotid artery
                            with intraluminal device, percutaneous
                            endoscopic approach.
03LN3BZ..................  Occlusion of left external carotid artery
                            with bioactive intraluminal device,
                            percutaneous approach.
03LN3DZ..................  Occlusion of left external carotid artery
                            with intraluminal device, percutaneous
                            approach.
03LN4BZ..................  Occlusion of left external carotid artery
                            with bioactive intraluminal device,
                            percutaneous endoscopic approach.
03LN4DZ..................  Occlusion of left external carotid artery
                            with intraluminal device, percutaneous
                            endoscopic approach.
03LP3BZ..................  Occlusion of right vertebral artery with
                            bioactive intraluminal device, percutaneous
                            approach.
03LP3DZ..................  Occlusion of right vertebral artery with
                            intraluminal device, percutaneous approach.
03LP4BZ..................  Occlusion of right vertebral artery with
                            bioactive intraluminal device, percutaneous
                            endoscopic approach.
03LP4DZ..................  Occlusion of right vertebral artery with
                            intraluminal device, percutaneous endoscopic
                            approach.
03LQ3BZ..................  Occlusion of left vertebral artery with
                            bioactive intraluminal device, percutaneous
                            approach.
03LQ3DZ..................  Occlusion of left vertebral artery with
                            intraluminal device, percutaneous approach.
03LQ4BZ..................  Occlusion of left vertebral artery with
                            bioactive intraluminal device, percutaneous
                            endoscopic approach.
03LQ4DZ..................  Occlusion of left vertebral artery with
                            intraluminal device, percutaneous endoscopic
                            approach.
03LR3DZ..................  Occlusion of face artery with intraluminal
                            device, percutaneous approach.
03LR4DZ..................  Occlusion of face artery with intraluminal
                            device, percutaneous endoscopic approach.
03LS3DZ..................  Occlusion of right temporal artery with
                            intraluminal device, percutaneous approach.
03LS4DZ..................  Occlusion of right temporal artery with
                            intraluminal device, percutaneous endoscopic
                            approach.
03LT3DZ..................  Occlusion of left temporal artery with
                            intraluminal device, percutaneous approach.
03LT4DZ..................  Occlusion of left temporal artery with
                            intraluminal device, percutaneous endoscopic
                            approach.
03VG3BZ..................  Restriction of intracranial artery with
                            bioactive intraluminal device, percutaneous
                            approach.
03VG3DZ..................  Restriction of intracranial artery with
                            intraluminal device, percutaneous approach.
03VG4BZ..................  Restriction of intracranial artery with
                            bioactive intraluminal device, percutaneous
                            endoscopic approach.
03VG4DZ..................  Restriction of intracranial artery with
                            intraluminal device, percutaneous endoscopic
                            approach.
03VH3BZ..................  Restriction of right common carotid artery
                            with bioactive intraluminal device,
                            percutaneous approach.

[[Page 49360]]

 
03VH3DZ..................  Restriction of right common carotid artery
                            with intraluminal device, percutaneous
                            approach.
03VH4BZ..................  Restriction of right common carotid artery
                            with bioactive intraluminal device,
                            percutaneous endoscopic approach.
03VH4DZ..................  Restriction of right common carotid artery
                            with intraluminal device, percutaneous
                            endoscopic approach.
03VJ3BZ..................  Restriction of left common carotid artery
                            with bioactive intraluminal device,
                            percutaneous approach.
03VJ3DZ..................  Restriction of left common carotid artery
                            with intraluminal device, percutaneous
                            approach.
03VJ4BZ..................  Restriction of left common carotid artery
                            with bioactive intraluminal device,
                            percutaneous endoscopic approach.
03VJ4DZ..................  Restriction of left common carotid artery
                            with intraluminal device, percutaneous
                            endoscopic approach.
03VK3BZ..................  Restriction of right internal carotid artery
                            with bioactive intraluminal device,
                            percutaneous approach.
03VK3DZ..................  Restriction of right internal carotid artery
                            with intraluminal device, percutaneous
                            approach.
03VK4BZ..................  Restriction of right internal carotid artery
                            with bioactive intraluminal device,
                            percutaneous endoscopic approach.
03VK4DZ..................  Restriction of right internal carotid artery
                            with intraluminal device, percutaneous
                            endoscopic approach.
03VL3BZ..................  Restriction of left internal carotid artery
                            with bioactive intraluminal device,
                            percutaneous approach.
03VL3DZ..................  Restriction of left internal carotid artery
                            with intraluminal device, percutaneous
                            approach.
03VL4BZ..................  Restriction of left internal carotid artery
                            with bioactive intraluminal device,
                            percutaneous endoscopic approach.
03VL4DZ..................  Restriction of left internal carotid artery
                            with intraluminal device, percutaneous
                            endoscopic approach.
03VM3BZ..................  Restriction of right external carotid artery
                            with bioactive intraluminal device,
                            percutaneous approach.
03VM3DZ..................  Restriction of right external carotid artery
                            with intraluminal device, percutaneous
                            approach.
03VM4BZ..................  Restriction of right external carotid artery
                            with bioactive intraluminal device,
                            percutaneous endoscopic approach.
03VM4DZ..................  Restriction of right external carotid artery
                            with intraluminal device, percutaneous
                            endoscopic approach.
03VN3BZ..................  Restriction of left external carotid artery
                            with bioactive intraluminal device,
                            percutaneous approach.
03VN3DZ..................  Restriction of left external carotid artery
                            with intraluminal device, percutaneous
                            approach.
03VN4BZ..................  Restriction of left external carotid artery
                            with bioactive intraluminal device,
                            percutaneous endoscopic approach.
03VN4DZ..................  Restriction of left external carotid artery
                            with intraluminal device, percutaneous
                            endoscopic approach.
03VP3BZ..................  Restriction of right vertebral artery with
                            bioactive intraluminal device, percutaneous
                            approach.
03VP3DZ..................  Restriction of right vertebral artery with
                            intraluminal device, percutaneous approach.
03VP4BZ..................  Restriction of right vertebral artery with
                            bioactive intraluminal device, percutaneous
                            endoscopic approach.
03VP4DZ..................  Restriction of right vertebral artery with
                            intraluminal device, percutaneous endoscopic
                            approach.
03VQ3BZ..................  Restriction of left vertebral artery with
                            bioactive intraluminal device, percutaneous
                            approach.
03VQ3DZ..................  Restriction of left vertebral artery with
                            intraluminal device, percutaneous approach.
03VQ4BZ..................  Restriction of left vertebral artery with
                            bioactive intraluminal device, percutaneous
                            endoscopic approach.
03VQ4DZ..................  Restriction of left vertebral artery with
                            intraluminal device, percutaneous endoscopic
                            approach.
03VR3DZ..................  Restriction of face artery with intraluminal
                            device, percutaneous approach.
03VR4DZ..................  Restriction of face artery with intraluminal
                            device, percutaneous endoscopic approach.
03VS3DZ..................  Restriction of right temporal artery with
                            intraluminal device, percutaneous approach.
03VS4DZ..................  Restriction of right temporal artery with
                            intraluminal device, percutaneous endoscopic
                            approach.
03VT3DZ..................  Restriction of left temporal artery with
                            intraluminal device, percutaneous approach.
03VT4DZ..................  Restriction of left temporal artery with
                            intraluminal device, percutaneous endoscopic
                            approach.
03VU3DZ..................  Restriction of right thyroid artery with
                            intraluminal device, percutaneous approach.
03VU4DZ..................  Restriction of right thyroid artery with
                            intraluminal device, percutaneous endoscopic
                            approach.
03VV3DZ..................  Restriction of left thyroid artery with
                            intraluminal device, percutaneous approach.
03VV4DZ..................  Restriction of left thyroid artery with
                            intraluminal device, percutaneous endoscopic
                            approach.
------------------------------------------------------------------------

    For this request, as discussed in the FY 2016 IPPS/LTCH PPS 
proposed rule, we first examined claims data for all intracranial 
vascular procedure cases with a principal diagnosis of hemorrhage 
reported in MS-DRGs 020, 021, and 022 in the December 2014 update of 
the FY 2014 MedPAR file. The table below shows our findings. We found a 
total of 1,755 cases with an average length of stay ranging from 8.28 
days to 16.84 days and average costs ranging from $36,998 to $71,665 in 
MS-DRGs 020, 021, and 022.

                     Intracranial Vascular Procedures With Principal Diagnosis of Hemorrhage
----------------------------------------------------------------------------------------------------------------
                                                                     Number of    Average length
                             MS-DRG                                    cases          of stay      Average costs
----------------------------------------------------------------------------------------------------------------
MS-DRG 020 (with MCC)--All cases................................           1,285           16.84         $71,655
MS-DRG 021 (with CC)--All cases.................................             372           13.82          52,143
MS-DRG 022 (without CC/MCC)--All cases..........................              98            8.28          36,998
----------------------------------------------------------------------------------------------------------------

    Next, we examined claims data on the first part of the request, 
which was to create a new MS-DRG for endovascular intracranial 
embolization procedure cases with a principal diagnosis of hemorrhage 
that are currently assigned to MS-DRGs 020, 021, and 022. Our findings 
for the first part of this multi-part request are shown in the table 
below.

[[Page 49361]]



            Endovascular Intracranial Embolization Procedures With Principal Diagnosis of Hemorrhage
----------------------------------------------------------------------------------------------------------------
                                                                                 Average length
                            MS-DRG                             Number of cases      of stay       Average costs
----------------------------------------------------------------------------------------------------------------
Requested new combined MS-DRG................................           1,275             15.6          $67,831
----------------------------------------------------------------------------------------------------------------

    The requestor suggested that this new requested base MS-DRG would 
not be subdivided by severity levels. Using the requested code logic, 
cases with a principal diagnosis of hemorrhage and procedure codes 
39.72 (Endovascular (total) embolization or occlusion of head and neck 
vessels), 39.75 (Endovascular embolization or occlusion of vessel(s) of 
head or neck using bare coils), and 39.76 (Endovascular embolization or 
occlusion of vessel(s) of head or neck using bioactive coils) would be 
moved out of MS-DRGs 020, 021, and 022 and into a single new MS-DRG 
with no severity levels.
    As can be seen in the table above, the average costs for the new 
requested combined MS-DRG would be $67,831. The average costs for 
current MS-DRGs 020, 021, and 022 were $71,655, $52,143, and $36,998, 
respectively. Based on these findings, if we established this requested 
new MS-DRG, payments for those cases at the highest severity level (MS-
DRG 020, which had average costs of $71,655) would be reduced.
    In the FY 2016 IPPS/LTCH PPS proposed rule (80 FR 24351 through 
24356), we stated that we believe that maintaining the current MS-DRG 
assignment for these types of procedures is appropriate. Our clinical 
advisors stated that the current grouping of procedures within MS-DRGs 
020, 021, and 022 reflects patients who are unique in terms of 
utilization and complexity based on the three severity levels, which 
are specifically designed to capture clinical differences in these 
patients, and these factors support maintaining the current structure. 
Therefore, we did not propose to move cases with a principal diagnosis 
of hemorrhage and procedure codes 39.72, 39.75, and 39.76 out of MS-
DRGs 020, 021, and 022 and create a new base MS-DRG. We invited public 
comments on this proposal.
    As discussed earlier in this section, the requestor also 
recommended the creation of a new set of MS-DRGs for endovascular 
intracranial embolization procedures without a principal diagnosis of 
hemorrhage with MCC, with CC, and without CC/MCC. For these requested 
new MS-DRGs, the requestor suggested assignment of endovascular 
embolization procedures as well as certain other percutaneous and 
endovascular procedures. The complete list of endovascular intracranial 
embolization procedures developed by the requestor is as follows:
     00.62 (Percutaneous angioplasty of intracranial vessel);
     39.72 (Endovascular (total) embolization or occlusion of 
head and neck vessels);
     39.74 (Endovascular removal of obstruction from head and 
neck vessel(s));
     39.75 (Endovascular embolization or occlusion of vessel(s) 
of head or neck using bare coils);
     39.76 (Endovascular embolization or occlusion of vessel(s) 
of head or neck using bioactive coils); and
     39.79 (Other endovascular procedures on other vessels)
    The following table shows our findings from examination of claims 
data on endovascular intracranial procedures without a principal 
diagnosis of hemorrhage reported in MS-DRGs 023 through 027 from the 
December 2014 update of the FY 2014 MedPAR file.

                 Endovascular Intracranial Procedures Without Principal Diagnosis of Hemorrhage
----------------------------------------------------------------------------------------------------------------
                                                                     Number of    Average length
                             MS-DRG                                    cases          of stay      Average costs
----------------------------------------------------------------------------------------------------------------
MS-DRG 023--All cases...........................................           5,615           10.96         $37,784
MS-DRG 023--Cases with endovascular intracranial procedure                 1,510            8.88          39,666
 without diagnosis of hemorrhage................................
MS-DRG 024--All cases...........................................           1,848            5.93          26,195
MS-DRG 024--Cases with endovascular intracranial procedure                   867            5.80          27,975
 without diagnosis of hemorrhage................................
MS-DRG 025--All cases...........................................          16,949            9.35          29,970
MS-DRG 025--Cases with endovascular intracranial procedure                   650            8.52          44,082
 without diagnosis of hemorrhage................................
MS-DRG 026--All cases...........................................           8,075            6.09          21,414
MS-DRG 026--Cases with endovascular intracranial procedure                   778            3.07          26,594
 without diagnosis of hemorrhage................................
MS-DRG 027--All cases...........................................           9,883            3.15          16,613
MS-DRG 027--Cases with endovascular intracranial procedure                 1,793            1.66          22,244
 without diagnosis of hemorrhage................................
----------------------------------------------------------------------------------------------------------------

    As can be seen from this table, if we created a new set of MS-DRGs 
recommended by the requester, most of the cases would have to be moved 
out of MS-DRGs 023 and 027. The 1,510 cases that would have to be moved 
out of MS-DRG 023 have average costs of $39,666 compared to average 
costs of $37,784 for all cases in MS-DRG 023. The average costs for 
these cases are not significantly different from the average costs for 
all cases in MS-DRG 023. The average length of stay for the cases with 
endovascular intracranial procedure without a diagnosis of hemorrhage 
in MS-DRG 023 is 8.88 compared to 10.96 days for all cases in MS-DRG 
023. In the proposed rule, we stated that we believe that these data 
support the current MS-DRG assignment for MS-DRG 023. The 1,793 cases 
that would have to be moved out of MS-DRG 027 have average costs of 
$22,244 compared to the average costs of $16,613 for all cases in MS-
DRG 027. While the average costs for these cases are higher than for 
all cases in MS-DRG 027, one would

[[Page 49362]]

expect some procedures within an MS-DRG to have higher average costs 
and other procedures to have lower average costs than the overall 
average costs. Cases within the MS-DRGs describing endovascular 
intracranial procedures are grouped together based on similar clinical 
and resource criteria. Some cases will have average costs that are 
higher than the overall average costs for cases in the MS-DRG, while 
other cases will have lower average costs. These differences in average 
costs are found within all MS-DRGs. The average length of stay of MS-
DRG 027 cases with endovascular intracranial procedure without a 
diagnosis of hemorrhage is 1.66 days as compared to 3.15 days for all 
cases in MS-DRG 027. Therefore, while the average costs are higher for 
the cases with endovascular intracranial procedure without a diagnosis 
of hemorrhage than for all cases in MS-DRG 027, the length of stay is 
shorter.
    The 867 cases that would have to be moved out of MS-DRG 024 have 
average costs of $27,975 compared to average costs for all cases in MS-
DRG 024 of $26,195. The average costs for these cases are not 
significantly different than the average costs for all cases in MS-DRG 
024. The average length of stay for the 867 cases that would have to be 
moved out of MS-DRG 024 is 5.80 compared to 5.93 for all cases in MS-
DRG 024. Therefore, the lengths of stay for the cases also are quite 
similar in MS-DRG 024. In the FY 2016 IPPS/LTCH PPS proposed rule, we 
stated that we determined that these data findings support maintaining 
the current MS-DRG assignment of these procedures in MS-DRG 024.
    MS-DRGs 025 and 026 show the smallest number of cases that would 
have to be moved to the requested new MS-DRGs, but these cases have 
larger differences in average costs. The average costs of cases that 
would have to be moved out of MS-DRG 025 are $44,082 compared to 
$29,970 for all cases in MS-DRG 025. The average length of stay for the 
MS-DRG 025 cases with endovascular intracranial procedure without a 
diagnosis of hemorrhage is 8.52 days as compared to 9.35 days for all 
cases in MS-DRG 025. Therefore, the lengths of stay are similar for 
cases in MS-DRG 025. The average costs of cases that would have to be 
moved out of MS-DRG 026 are $26,594 compared to $21,414 for all cases. 
The average length of stay for cases that would have to be moved out of 
MS-DRG 026 is 3.07 days compared to 6.09 days for all cases in MS-DRG 
026, or almost half as long as for all cases in MS-DRG 026. As stated 
earlier, the average costs for cases that would be moved out of MS-DRGs 
023, 024, 025, 026, and 027 under this request are higher than the 
average costs for all cases in these MS-DRGs, with most of the cases 
coming out of MS-DRGs 023 and 027. The average costs for these 
particular cases in MS-DRG 023 are not significantly different from the 
average costs for all cases in MS-DRG 023. In addition, while the 
average costs are higher for the cases with an endovascular 
intracranial procedure without a diagnosis of hemorrhage than for all 
cases in MS-DRG 027, the length of stay is shorter. We determined that 
the overall data do not support making the requested MS-DRG updates to 
MS-DRGs 023, 024, 025, 026, and 027 and creating three new MS-DRGs. 
Therefore, we did not propose to make changes to the current structure 
for MS-DRGs 023 through 027.
    In summary, our clinical advisors reviewed each aspect of this 
multi-part request and advised us that the endovascular embolization 
procedures are appropriately assigned to MS-DRGs 020 through 027. They 
did not support removing the procedures (procedure codes 39.72, 39.75, 
and 39.76) from MS-DRGs 020, 021, and 022 and creating a single MS-DRG 
for endovascular intracranial embolization procedures with a principal 
diagnosis of hemorrhage with no severity levels. Our clinical advisors 
stated that the current MS-DRG grouping of three severity levels 
captures differences in clinical severity, average costs, and length of 
stay for these patients appropriately. Our clinical advisors also 
recommended maintaining the current MS-DRG assignments for endovascular 
embolization and other percutaneous and endovascular procedures within 
MS-DRGs 023 through 027. They stated that these procedures are all 
clinically similar to others in these MS-DRGs. In addition, they stated 
that the surgical techniques are all designed to correct the same 
clinical problem, and they advised against moving a select number of 
those procedures out of MS-DRGs 023 through 027.
    Based on the findings from our data analysis and the 
recommendations from our clinical advisors, in the FY 2016 IPPS/LTCH 
PPS proposed rule (80 FR 24356), we did not propose to create the four 
new MS-DRGs for endovascular intracranial embolization and other 
endovascular procedures recommended by the requestor. We proposed to 
maintain the current MS-DRG structure for MS-DRGs 020 through 027.
    We invited public comments on these two proposals.
    Comment: A number of commenters supported the proposal to maintain 
the current MS-DRG structure for MS-DRGs 020 through 027 and not to 
create four new MS-DRGs for endovascular intracranial embolization and 
other endovascular procedures. The commenters stated that the proposal 
was reasonable, given the data and information provided.
    One commenter disagreed with the proposal. The commenter stated 
that the data demonstrate that the cost of endovascular coil cases 
consistently exceeds the overall average cost of all cases within each 
of the MS-DRGs to which these procedures are currently assigned. 
Moreover, the commenter believed that it was inappropriate to minimize 
the clinical complexity of these procedures compared to other 
procedures in the current MS-DRGs.
    Response: We appreciate the commenters' support for our proposal to 
maintain the current MS-DRG structure for MS-DRGs 020 through 027 and 
not to create four new MS-DRGs for endovascular intracranial 
embolization and other endovascular procedures. In response to the 
commenter who disagreed with the proposal, as stated earlier in this 
section, while we recognize that the average costs of these cases are 
higher than the average costs of all cases in MS-DRGs 023 through 027, 
one would expect some procedures within an MS-DRG to have higher 
average costs and other procedures to have lower average costs than the 
overall average costs. Cases within the MS-DRGs describing endovascular 
intracranial procedures are grouped together based on similar clinical 
and resource criteria. Some cases will have average costs that are 
higher than the overall average costs for cases in the MS-DRG, while 
other cases will have lower average costs. Our clinical advisors 
recommended maintaining the current MS-DRG assignments for endovascular 
embolization and other percutaneous and endovascular procedures within 
MS-DRGs 023 through 027. They continue to believe that these procedures 
are all clinically similar to others in these MS-DRGs and that the 
surgical techniques are all designed to correct the same clinical 
problem, and continue to advise against moving a select number of those 
procedures out of MS-DRGs 020 through 027. Our clinical advisors stated 
that the endovascular intracranial embolizations and other endovascular 
procedures address the same clinical problems as other procedures 
assigned to MS-DRGs 020 through 027. Therefore, the cases in MS-DRGs 
020 through 027 are clinically similar.
    After consideration of the public comments we received, we are 
finalizing our proposal to maintain the

[[Page 49363]]

current MS-DRG structure for MS-DRGs 020 through 027 and not to create 
four new MS-DRGs for endovascular intracranial embolization and other 
endovascular procedures.
3. MDC 5 (Diseases and Disorders of the Circulatory System)
    a. Adding Severity Levels to MS-DRGs 245 Through 251
    During the comment period for the FY 2015 IPPS/LTCH PPS proposed 
rule, we received a comment that recommended establishing severity 
levels for MS-DRG 245 (AICD Generator Procedures) and including 
additional severity levels for MS-DRG 246 (Percutaneous Cardiovascular 
Procedure with Drug-Eluting Stent with MCC or 4+ Vessels/Stents); MS-
DRG 247 (Percutaneous Cardiovascular Procedure with Drug-Eluting Stent 
without MCC); MS-DRG 248 (Percutaneous Cardiovascular Procedure with 
Non-Drug-Eluting Stent with MCC or 4+ Vessels/Stents); MS-DRG 249 
(Percutaneous Cardiovascular Procedure with Non-Drug-Eluting Stent 
without MCC); MS-DRG 250 (Percutaneous Cardiovascular Procedure without 
Coronary Artery Stent with MCC); and MS-DRG 251 (Percutaneous 
Cardiovascular Procedure without Coronary Artery Stent without MCC).
    We considered this public comment to be outside of the scope of the 
FY 2015 IPPS/LTCH PPS proposed rule. Therefore, we did not address this 
comment in the FY 2015 IPPS/LTCH PPS final rule. However, we indicated 
that we would consider the public comment for possible proposals in 
future rulemaking as part of our annual review process.
    For the FY 2016 IPPS/LTCH PPS proposed rule, we received a 
separate, but related, request involving most of these same MS-DRGs. 
Therefore, for the FY 2016 IPPS/LTCH PPS proposed rule, we conducted a 
simultaneous analysis of claims data to address both the FY 2015 public 
comment request and the related FY 2016 request. We discuss both of 
these requests below.
b. Percutaneous Intracardiac Procedures
    We received a request to remove the cardiac ablation and other 
specified cardiovascular procedures from the following MS-DRGs, and to 
create new MS-DRGs to classify these procedures:
     MS-DRG 246 (Percutaneous Cardiovascular Procedure with 
Drug-Eluting Stent with MCC or 4+ Vessels/Stents);
     MS-DRG 247 (Percutaneous Cardiovascular Procedure with 
Drug-Eluting Stent without MCC);
     MS-DRG 248 (Percutaneous Cardiovascular Procedure with 
Non-Drug-Eluting Stent with MCC or 4+ Vessels/Stents);
     MS-DRG 249 (Percutaneous Cardiovascular Procedure with 
Non-Drug-Eluting Stent without MCC);
     MS-DRG 250 (Percutaneous Cardiovascular Procedure without 
Coronary Artery Stent with MCC); and
     MS-DRG 251 (Percutaneous Cardiovascular Procedure without 
Coronary Artery Stent without MCC).
    The commenter stated that, historically, the MS-DRGs listed above 
appropriately reflected the differential cost of percutaneous 
transluminal coronary angioplasty (PTCA) procedures with and without 
stents. The commenter noted that PTCA procedures with drug eluting 
stents were previously paid the highest, followed by PTCA procedures 
with bare metal stents and PTCA procedures with no stents, 
respectively. However, the commenter believed that, in recent years, 
the opposite has begun to occur and cases reporting a PTCA procedure 
without a stent are being paid more than cases reporting a PTCA 
procedure with a stent. The commenter further noted that cardiac 
ablation procedures and PTCA procedures without stents are currently 
assigned to the same MS-DRGs, notwithstanding that the procedures have 
different clinical objectives and patient diagnoses. The commenter 
indicated that cardiac ablation procedures are performed on patients 
with multiple distinct cardiac arrhythmias to alter electrical 
conduction systems of the heart, and PTCA procedures are performed on 
patients with coronary atherosclerosis to open blocked coronary 
arteries. The commenter also noted that cardiac ablation procedures are 
performed in the heart chambers by cardiac electrophysiologists, 
require significantly more resources, and require longer periods of 
time to complete. Conversely, PTCA procedures are performed in the 
coronary vessels by interventional cardiologists, require the use of 
less equipment, and require a shorter period of time to complete. 
Therefore, the commenter suggested that CMS create new MS-DRGs for 
percutaneous intracardiac procedures to help improve clinical 
homogeneity by differentiating percutaneous intracardiac procedures 
(performed within the heart chambers) from percutaneous intracoronary 
procedures (performed within the coronary vessels). The commenter 
further believed that creating new MS-DRGs for these procedures would 
also better reflect the resource cost of specialized equipment used for 
more complex structures of electrical conduction systems when 
performing cardiac ablation procedures.
    The following ICD-9-CM procedure codes identify and describe the 
cardiac ablation procedures and the other percutaneous intracardiac 
procedures that are currently classified under MS-DRGs 246 through 251 
and that the commenter recommended that CMS assign to the newly created 
MS-DRGs:
     35.52 (Repair of atrial septal defect with prosthesis, 
closed technique);
     35.96 (Percutaneous balloon valvuloplasty);
     35.97 (Percutaneous mitral valve repair with implant);
     37.26 (Catheter based invasive electrophysiologic 
testing);
     37.27 (Cardiac mapping);
     37.34 (Excision or destruction of other lesion or tissue 
of heart, endovascular approach);
     37.36 (Excision, destruction, or exclusion of left atrial 
appendage (LAA)); and
     37.90 (Insertion of left atrial appendage device).
    There are a number of ICD-10-PCS code translations that provide 
more detailed and specific information for each of the ICD-9-CM 
procedure codes listed above that also are currently classified under 
MS-DRGs 246 through 251 based on the GROUPER Version 32 ICD-10 MS-DRGs. 
The comparable ICD-10-PCS code translations for ICD-9-CM procedure code 
35.52 are shown in the following table.

     ICD-10-PCS Code Translations for ICD-9-CM Procedure Code 35.52
------------------------------------------------------------------------
     ICD-10-PCS Code                      Code description
------------------------------------------------------------------------
02U53JZ..................  Supplement atrial septum with synthetic
                            substitute, percutaneous approach.
02U54JZ..................  Supplement atrial septum with synthetic
                            substitute, percutaneous endoscopic
                            approach.
------------------------------------------------------------------------


[[Page 49364]]

    The comparable ICD-10-PCS code translations for ICD-9-CM procedure 
code 35.96 are shown in the following table.

        ICD-10-PCS Translations for ICD-9-CM Procedure Code 35.96
------------------------------------------------------------------------
     ICD-10-PCS Code                      Code description
------------------------------------------------------------------------
027F34Z..................  Dilation of aortic valve with drug-eluting
                            intraluminal device, percutaneous approach.
027F3DZ..................  Dilation of aortic valve with intraluminal
                            device, percutaneous approach.
027F3ZZ..................  Dilation of aortic valve, percutaneous
                            approach.
027F44Z..................  Dilation of aortic valve with drug-eluting
                            intraluminal device, percutaneous endoscopic
                            approach.
027F4DZ..................  Dilation of aortic valve with intraluminal
                            device, percutaneous endoscopic approach.
027F4ZZ..................  Dilation of aortic valve, percutaneous
                            endoscopic approach.
027G34Z..................  Dilation of mitral valve with drug-eluting
                            intraluminal device, percutaneous approach.
027G3DZ..................  Dilation of mitral valve with intraluminal
                            device, percutaneous approach.
027G3ZZ..................  Dilation of mitral valve, percutaneous
                            approach.
027G44Z..................  Dilation of mitral valve with drug-eluting
                            intraluminal device, percutaneous endoscopic
                            approach.
027G4DZ..................  Dilation of mitral valve with intraluminal
                            device, percutaneous endoscopic approach.
027G4ZZ..................  Dilation of mitral valve, percutaneous
                            endoscopic approach.
027H34Z..................  Dilation of pulmonary valve with drug-eluting
                            intraluminal device, percutaneous approach.
027H3DZ..................  Dilation of pulmonary valve with intraluminal
                            device, percutaneous approach.
027H3ZZ..................  Dilation of pulmonary valve, percutaneous
                            approach.
027H44Z..................  Dilation of pulmonary valve with drug-eluting
                            intraluminal device, percutaneous endoscopic
                            approach.
027H4DZ..................  Dilation of pulmonary valve with intraluminal
                            device, percutaneous endoscopic approach.
027H4ZZ..................  Dilation of pulmonary valve, percutaneous
                            endoscopic approach.
027J34Z..................  Dilation of tricuspid valve with drug-eluting
                            intraluminal device, percutaneous approach.
027J3DZ..................  Dilation of tricuspid valve with intraluminal
                            device, percutaneous approach.
027J3ZZ..................  Dilation of tricuspid valve, percutaneous
                            approach.
027J44Z..................  Dilation of tricuspid valve with drug-eluting
                            intraluminal device, percutaneous endoscopic
                            approach.
027J4DZ..................  Dilation of tricuspid valve with intraluminal
                            device, percutaneous endoscopic approach.
027J4ZZ..................  Dilation of tricuspid valve, percutaneous
                            endoscopic approach.
------------------------------------------------------------------------

    The ICD-10-PCS code translation for ICD-9-CM procedure code 35.97 
is 02UG3JZ (Supplement mitral valve with synthetic substitute, 
percutaneous approach).
    The ICD-10-PCS code translation for ICD-9-CM procedure code 37.26 
is 4A023FZ (Measurement of cardiac rhythm, percutaneous approach).
    The comparable ICD-10-PCS code translations for ICD-9-CM procedure 
code 37.27 are shown in the following table.

     ICD-10-PCS Code Translations for ICD-9-CM Procedure Code 37.27
------------------------------------------------------------------------
     ICD-10-PCS Code                      Code description
------------------------------------------------------------------------
02K83ZZ..................  Map conduction mechanism, percutaneous
                            approach.
02K84ZZ..................  Map conduction mechanism, percutaneous
                            endoscopic approach.
------------------------------------------------------------------------

    The comparable ICD-10-PCS code translations for ICD-9-CM procedure 
code 37.34 are shown in the following table:

     ICD-10-PCS Code Translations for ICD-9-CM Procedure Code 37.34
------------------------------------------------------------------------
     ICD-10-PCS Code                      Code description
------------------------------------------------------------------------
02553ZZ..................  Destruction of atrial septum, percutaneous
                            approach.
02563ZZ..................  Destruction of right atrium, percutaneous
                            approach.
02573ZZ..................  Destruction of left atrium, percutaneous
                            approach.
02583ZZ..................  Destruction of conduction mechanism,
                            percutaneous approach.
02593ZZ..................  Destruction of chordae tendineae,
                            percutaneous approach.
025F3ZZ..................  Destruction of aortic valve, percutaneous
                            approach.
025G3ZZ..................  Destruction of mitral valve, percutaneous
                            approach.
025H3ZZ..................  Destruction of pulmonary valve, percutaneous
                            approach.
025J3ZZ..................  Destruction of tricuspid valve, percutaneous
                            approach.
025K3ZZ..................  Destruction of right ventricle, percutaneous
                            approach.
025L3ZZ..................  Destruction of left ventricle, percutaneous
                            approach.
025M3ZZ..................  Destruction of ventricular septum,
                            percutaneous approach.
02B53ZZ..................  Excision of atrial septum, percutaneous
                            approach.
02B63ZZ..................  Excision of right atrium, percutaneous
                            approach.
02B73ZZ..................  Excision of left atrium, percutaneous
                            approach.
02B83ZZ..................  Excision of conduction mechanism,
                            percutaneous approach.
02B93ZZ..................  Excision of chordae tendineae, percutaneous
                            approach.

[[Page 49365]]

 
02BF3ZZ..................  Excision of aortic valve, percutaneous
                            approach.
02BG3ZZ..................  Excision of mitral valve, percutaneous
                            approach.
02BH3ZZ..................  Excision of pulmonary valve, percutaneous
                            approach.
02BJ3ZZ..................  Excision of tricuspid valve, percutaneous
                            approach.
02BM3ZZ..................  Excision of ventricular septum, percutaneous
                            approach.
02T83ZZ..................  Resection of conduction mechanism,
                            percutaneous approach.
------------------------------------------------------------------------

    The comparable ICD-10-PCS code translations for ICD-9-CM procedure 
code 37.36 are shown in the following table:

     ICD-10-PCS Code Translations for ICD-9-CM Procedure Code 37.36
------------------------------------------------------------------------
     ICD-10-PCS Code                      Code description
------------------------------------------------------------------------
02573ZK..................  Destruction of left atrial appendage,
                            percutaneous approach.
02574ZK..................  Destruction of left atrial appendage,
                            percutaneous endoscopic approach.
02B73ZK..................  Excision of left atrial appendage,
                            percutaneous approach.
02B74ZK..................  Excision of left atrial appendage,
                            percutaneous endoscopic approach.
02L73ZK..................  Occlusion of left atrial appendage,
                            percutaneous approach.
02L74ZK..................  Occlusion of left atrial appendage,
                            percutaneous endoscopic approach.
------------------------------------------------------------------------

    The comparable ICD-10-PCS code translations for ICD-9-CM procedure 
code 37.90 are shown in the following table:

     ICD-10-PCS Code Translations for ICD-9-CM Procedure Code 37.90
------------------------------------------------------------------------
     ICD-10-PCS Code                      Code description
------------------------------------------------------------------------
02L73CK..................  Occlusion of left atrial appendage with
                            extraluminal device, percutaneous approach.
02L73DK..................  Occlusion of left atrial appendage with
                            intraluminal device, percutaneous approach.
02L74CK..................  Occlusion of left atrial appendage with
                            extraluminal device, percutaneous endoscopic
                            approach.
02L74DK..................  Occlusion of left atrial appendage with
                            intraluminal device, percutaneous endoscopic
                            approach.
------------------------------------------------------------------------

    The ICD-10-PCS code translations listed above, along with their 
respective MS-DRG assignments, can be found in the ICD-10 MS-DRGs 
Version 32 Definitions Manual posted on the CMS Web site at: http://www.cms.gov/Medicare/Coding/ICD10/ICD-10-MS-DRG-Conversion-Project.html.
    As mentioned earlier, we received a separate, but related, request 
to add severity levels to MS-DRGs 246 through 251. We address this 
request at the end of this section.
    To address the first of these separate, but related, requests, we 
reviewed claims data for MS-DRGs 246 through 251 from the December 2014 
update of the FY 2014 MedPAR file. Our findings are shown in the 
following table:

                           Percutaneous Cardiovascular MS-DRGs With and Without Stents
----------------------------------------------------------------------------------------------------------------
                                                                     Number of    Average length
                             MS-DRG                                    cases          of stay      Average costs
----------------------------------------------------------------------------------------------------------------
MS-DRG 246--All cases...........................................          30,617            5.52         $23,855
MS-DRG 246--Cases with procedure codes 35.52, 35.96, 35.97,                  244            9.69          34.099
 37.26, 37.27, 37.34, 37.36, and 37.90..........................
MS-DRG 247--All cases...........................................          79,639            2.69          15,671
MS-DRG 247--Cases with procedure codes 35.52, 35.96, 35.97,                  260            5.20          25,797
 37.26, 37.27, 37.34, 37.36, and 37.90..........................
MS-DRG 248--All cases...........................................           9,310            6.37          22,504
MS-DRG 248--Cases with procedure codes 35.52, 35.96, 35.97,                  125           10.76          33,521
 37.26, 37.27, 37.34, 37.36, and 37.90..........................
MS-DRG 249--All cases...........................................          16,273            3.08          14,066
MS-DRG 249--Cases with procedure codes 35.52, 35.96, 35.97,                   81            5.12          23,710
 37.26, 37.27, 37.34, 37.36, and 37.90..........................
MS-DRG 250--All cases...........................................           9,275            7.07          22,902
MS-DRG 250--Cases with procedure codes 35.52, 35.96, 35.97,                5,826            7.90          24,841
 37.26, 37.27, 37.34, 37.36, and 37.90..........................
MS-DRG 251--All cases...........................................          20,945            3.25          15,757

[[Page 49366]]

 
MS-DRG 251--Cases with procedure codes 35.52, 35.96, 35.97,               14,436            3.39          17,290
 37.26, 37.27, 37.34, 37.36, and 37.90..........................
----------------------------------------------------------------------------------------------------------------

    As shown in the table above, there were a total of 30,617 cases in 
MS-DRG 246, with an average length of stay of 5.52 days and average 
costs of $23,855. For cases reporting a percutaneous intracardiac 
procedure in MS-DRG 246 (ICD-9-CM procedure codes 35.52, 35.96, 35.97, 
37.26, 37.27, 37.34, 37.36, and 37.90), there were a total of 244 
cases, with an average length of stay of 9.69 days and average costs of 
$34,099. For MS-DRGs 247 through 251, a similar pattern was identified; 
the data reflected that the average costs are higher and the average 
length of stay is greater for cases reporting a percutaneous 
intracardiac procedure in comparison to the average costs and average 
length of stay for all of the cases in their respective MS-DRGs.
    As reflected in the following table, a further analysis of the data 
showed that percutaneous intracardiac procedures represent a total of 
20,972 cases in MS-DRGs 246 through 251, with a greater average length 
of stay (4.79 days versus 3.62 days) and higher average costs ($19,810 
versus $17,532) in comparison to all of the remaining cases in MS-DRGs 
246 through 251.

                       Summary of Percutaneous Cardiovascular DRGs With and Without Stents
----------------------------------------------------------------------------------------------------------------
                                                                     Number of    Average length
                             MS-DRG                                    cases          of stay      Average costs
----------------------------------------------------------------------------------------------------------------
MS-DRGs 246 through 251--Cases with procedure codes 35.52,                20,972            4.79         $19,810
 35.96, 35.97, 37.26, 37.27, 37.34, 37.36, and 37.90............
MS-DRGs 246 through 251--Cases without procedure codes 35.52,            145,087            3.62          17,532
 35.96, 35.97, 37.26, 37.27, 37.34, 37.36, and 37.90............
----------------------------------------------------------------------------------------------------------------

    We stated in the FY 2016 IPPS/LTCH PPS proposed rule that the 
results of these data analyses support removing procedures performed 
within the heart chambers using intracardiac techniques from MS-DRGs 
246 through 251, and assigning these procedures to separate MS-DRGs. 
The results of these data analyses also supported subdividing these MS-
DRGs using the ``with MCC'' and ``without MCC'' severity levels based 
on the application of the criteria established in the FY 2008 IPPS 
final rule (72 FR 47169), and described in section II.G.1.b. of the 
preamble of the proposed rule, that must be met to warrant the creation 
of a CC or an MCC subgroup within a base MS-DRG. Our clinical advisors 
also agreed that this differentiation would improve the clinical 
homogeneity of these MS-DRGs by separating percutaneous intracardiac 
procedures (performed within the heart chambers) from percutaneous 
intracoronary procedures (performed within the coronary vessels). In 
addition, we believe that creating these new MS-DRGs would better 
reflect the resource cost of specialized equipment used to perform more 
complex structures of electrical conduction systems during cardiac 
ablation procedures. Therefore, for FY 2016, we proposed to create two 
new MS-DRGs to classify percutaneous intracardiac procedures (80 
FR24359). Specifically, we proposed to create MS-DRG 273, entitled 
``Percutaneous Intracardiac Procedures with MCC,'' and MS-DRG 274, 
entitled ``Percutaneous Intracardiac Procedures without MCC,'' and to 
assign the procedures performed within the heart chambers using 
intracardiac techniques to the two proposed new MS-DRGs. We proposed 
that existing percutaneous intracoronary procedures with and without 
stents continue to be assigned to the other MS-DRGs to reflect that 
those procedures are performed within the coronary vessels and require 
fewer resources.
    The table below represents the distribution of cases, average 
length of stay, and average costs for these proposed two new MS-DRGs.

                          Proposed New MS-DRGs for Percutaneous Intracardiac Procedures
----------------------------------------------------------------------------------------------------------------
                                                                     Number of    Average length
                             MS-DRG                                    cases          of stay      Average costs
----------------------------------------------------------------------------------------------------------------
Proposed MS-DRG 273 with MCC....................................           6,195            8.03         $25,380
Proposed MS-DRG 274 without MCC.................................          14,777            3.44          17,475
----------------------------------------------------------------------------------------------------------------

    We invited public comments on our proposal to create the two new 
MS-DRGs for percutaneous intracardiac procedures for FY 2016. In 
addition, we invited public comments on the ICD-10-PCS code 
translations that were presented earlier in this section and our 
proposal to assign these procedure codes to the proposed new MS-DRGs 
273 and 274.
    Comment: Several commenters supported the proposal to create 
proposed new MS-DRG 273 and MS-DRG 274 to improve clinical homogeneity 
and better reflect resource costs. The commenters stated that the 
proposal was reasonable, given the data and information provided. The 
commenters also agreed with the proposed ICD-10-PCS code translations 
and assignment of those codes to the proposed new MS-DRGs.
    Several commenters commended CMS for conducting the analysis and 
continuing to make further refinements to the MS-DRGs. One commenter 
specifically expressed appreciation for CMS' display of cost and length 
of stay data in the analysis, in addition to the clinical factors that 
support

[[Page 49367]]

differentiation of intracardiac procedures from intracoronary 
procedures. This commenter recommended that, if the two proposed MS-
DRGs are finalized, CMS continue to monitor them after ICD-10 
implementation in an effort to mitigate potential unintended 
consequences. The commenter also suggested that, in the future, 
additional procedure codes may warrant assignment to the proposed new 
MS-DRGs. Another commenter stated that adopting the proposal to create 
the new MS-DRGs will lead to more appropriate payment.
    Response: We appreciate the commenters' support. We agree that 
creating these new MS-DRGs will better reflect utilization of resources 
and clinical cohesiveness for intracardiac procedures in comparison to 
intracoronary procedures, as well as provide for appropriate payment 
for the procedures.
    Comment: One commenter supported the proposal but also requested 
that CMS provide additional information on how the payment rate will be 
adjusted for the remaining existing MS-DRGs (246 through 251) following 
the creation of proposed new MS-DRGs 273 and 274.
    Response: We thank the commenter for its support. For payment rate 
updates to all of the MS-DRGs for FY 2016, we refer readers to Table 5 
associated with this final rule (which is available via the Internet on 
the CMS Web site at: http://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/AcuteInpatientPPS/index.html).
    After consideration of the public comments we received, we are 
finalizing our proposal to create MS-DRGs 273 (Percutaneous 
Intracardiac Procedures with MCC) and MS-DRG 274 (Percutaneous 
Intracardiac Procedures without MCC) for the FY 2016 ICD-10 MS-DRGs 
Version 33.
    As mentioned earlier in this section, we received a similar request 
in response to the FY 2015 IPPS/LTCH PPS proposed rule to add severity 
levels to MS-DRGs 246 through 251. We considered this public comment to 
be outside of the scope of the FY 2015 IPPS/LTCH PPS proposed rule. 
Therefore, we did not address this comment in the FY 2015 IPPS/LTCH PPS 
final rule. However, we indicated that we would consider the public 
comment for possible proposals in future rulemaking as part of our 
annual review process. Specifically, the commenter recommended 
including additional severity levels for MS-DRGs 246 through 251 and 
establishing severity levels for MS-DRG 245 (AICD Generator 
Procedures).
    For our data analysis for this recommendation, we examined claims 
data from the December 2014 update of the FY 2014 MedPAR file to 
determine if including additional severity levels in MS-DRGs 246 
through 251 was warranted. During our analysis, we applied the criteria 
established in the FY 2008 IPPS final rule (72 FR 47169), as described 
in section II.G.1.b. of the preamble of the proposed rule. As shown in 
the table below, we collapsed MS-DRGs 246 through 251 into base MS-DRGs 
(MS-DRGs 246, 248, and 250) by suggested severity level and applied the 
criteria.

        Percutaneous Cardiovascular MS-DRG With and Without Stent Procedures by Suggested Severity Level
----------------------------------------------------------------------------------------------------------------
                                                                     Number of    Average length
                             MS-DRG                                    cases          of stay      Average costs
----------------------------------------------------------------------------------------------------------------
Suggested MS-DRG 246 with MCC...................................          30,617            5.52         $23,855
Suggested MS-DRG 246 with CC....................................          45,313            2.96          16,233
Suggested MS-DRG 246 without CC/MCC.............................          34,326            2.33          14,928
Suggested MS-DRG 248 with MCC...................................           9,310            6.37          22,504
Suggested MS-DRG 248 with CC....................................           9,510            3.49          14,798
Suggested MS-DRG 248 without CC/MCC.............................           6,763            2.51          13,037
Suggested MS-DRG 250 with MCC...................................           9,275            7.07          22,903
Suggested MS-DRG 250 with CC....................................          11,653            3.80          16,113
Suggested MS-DRG 250 without CC/MCC.............................           9,292            2.56          15,310
----------------------------------------------------------------------------------------------------------------

    We found that the criterion that there be a $2,000 difference in 
average costs between subgroups was not met. Specifically, between the 
``with CC'' and ``without CC/MCC'' subgroups for base MS-DRG 246, the 
difference in average costs was only $1,305; for base MS-DRG 248, the 
difference in average costs was only $1,761; and for base MS-DRG 250, 
the difference in average costs was only $803. The results of the data 
analysis of MS-DRGs 246 through 251 confirmed, and our clinical 
advisors agreed, that the existing 2-way severity level splits for 
these MS-DRGs (with MCC and without MCC) are appropriate, as displayed 
in the table below.

                           Percutaneous Cardiovascular MS-DRGs With and Without Stents
----------------------------------------------------------------------------------------------------------------
                                                                     Number of    Average length
                             MS-DRG                                    cases          of stay      Average costs
----------------------------------------------------------------------------------------------------------------
MS-DRG 246--All cases...........................................          30,617            5.52         $23,855
MS-DRG 247--All cases...........................................          79,639            2.69          15,671
MS-DRG 248--All cases...........................................           9,310            6.37          22,504
MS-DRG 249--All cases...........................................          16,273            3.08          14,066
MS-DRG 250--All cases...........................................           9,275            7.07          22,903
MS-DRG 251--All cases...........................................          20,945            3.25          15,757
----------------------------------------------------------------------------------------------------------------

    Therefore, we did not propose to further subdivide the severity 
levels for MS-DRGs 246 through 251. We invited public comments on our 
proposal not to create additional severity levels for MS-DRGs 246 
through 251.
    Comment: Several commenters supported the proposal not to create 
additional severity levels for MS-DRGs 246 through 251. The commenters 
stated that the proposal was reasonable,

[[Page 49368]]

given the data and information provided.
    Response: We appreciate the commenters' support. Therefore, we are 
finalizing our proposal to not create additional severity levels for 
MS-DRGs 246-251 for the FY 2016 ICD-10 MS-DRGs Version 33.
    Using the same MedPAR claims data for FY 2014, we separately 
examined cases in MS-DRG 245 to determine whether to subdivide this MS-
DRG into severity levels. As displayed in the table below, the results 
of the FY 2014 data analysis showed there were a total of 1,699 cases, 
with an average length of stay of 5.49 days and average costs of 
$34,287, in MS-DRG 245.

                                            AICD Generator Procedures
----------------------------------------------------------------------------------------------------------------
                                                                                 Average length
                            MS-DRG                             Number of cases      of stay       Average costs
----------------------------------------------------------------------------------------------------------------
MS-DRG 245--All cases........................................           1,699             5.49          $34,287
----------------------------------------------------------------------------------------------------------------

    We applied the five criteria established in the FY 2008 IPPS final 
rule (72 FR 47169), as described in section II.G.1.b. of the preamble 
of the proposed rule, to determine if it was appropriate to subdivide 
MS-DRG 245 into severity levels. The table below illustrates our 
findings.

----------------------------------------------------------------------------------------------------------------
                                                                     Number of    Average length
      AICD Generator procedures by suggested severity level            cases          of stay      Average costs
----------------------------------------------------------------------------------------------------------------
Suggested MS-DRG 245 with MCC...................................             542            8.15         $40,004
Suggested MS-DRG 245 with CC....................................             939            4.51         $32,237
Suggested MS-DRG 245 without CC/MCC.............................             218            3.12         $28,907
----------------------------------------------------------------------------------------------------------------

    Based on the analysis of the FY 2014 claims data for MS-DRG 245, 
the results supported creating a ``with MCC'' and a ``without MCC'' 
severity level split. However, our clinical advisors indicated that it 
would not be clinically appropriate to add severity levels based on an 
isolated year's data fluctuation because this could lead to a lack of 
stability in MS-DRG payments. We agreed with our clinical advisors and 
noted that we annually conduct an analysis of base MS-DRGs to evaluate 
if additional severity levels are warranted. This analysis includes 2 
years of MedPAR claims data to specifically compare data results from 1 
year to the next to avoid making determinations about whether 
additional severity levels are warranted based on an isolated year's 
data fluctuation. Generally, in past years, for our review of requests 
to add or establish severity levels, in our analysis of the most recent 
claims data, there was at least one criterion that was not met. 
Therefore, it was not necessary to further analyze data beyond 1 year. 
However, the results of our analysis of claims data in the December 
2014 update of the FY 2014 MedPAR file for this particular request 
involving MS-DRG 245 demonstrate that all five criteria to establish 
subgroups were met, and, therefore, it was necessary to also examine 
the FY 2013 MedPAR claims data file.
    The results of our analysis from the December 2013 update of the FY 
2013 claims data for MS-DRG 245 are shown in the table below.

                                            AICD Generator Procedures
----------------------------------------------------------------------------------------------------------------
                                                                                 Average length
                            MS-DRG                             Number of cases      of stay       Average costs
----------------------------------------------------------------------------------------------------------------
MS-DRG 245--All cases........................................           1,850             4.81          $33,272
----------------------------------------------------------------------------------------------------------------

    The FY 2013 claims data for MS-DRG 245 did not support creating any 
severity levels because the data did not meet one or more of the five 
required criteria for creating new severity levels. The data did not 
meet the requirement for a 3-way severity level split (with MCC, with 
CC, and without CC/MCC) or a 2-way severity level split (with MCC and 
without MCC) because there were not at least 500 cases in the MCC 
subgroup. While the data did meet this particular criterion for the 2-
way severity level split of ``with CC/MCC'' and ``without CC/MCC'' 
because there were at least 500 cases in the CC subgroup, the data did 
not meet the criterion that there be at least a 20-percent difference 
in average costs between subgroups, as shown in the table below.

                                            AICD Generator Procedures
----------------------------------------------------------------------------------------------------------------
                                                                     Number of    Average length
               MS-DRG by suggested severity level                      cases          of stay      Average costs
----------------------------------------------------------------------------------------------------------------
MS-DRG 245 with MCC.............................................              44            7.32         $39,536
MS-DRG 245 with CC..............................................           1,118            4.26         $31,786
MS-DRG 245 without CC/MCC.......................................             288            3.10         $29,383
----------------------------------------------------------------------------------------------------------------

    As stated previously, we believe that 2 years of data showing that 
the requested CC or MCC subgroup meets all five of the established 
criteria for creating severity levels are needed in order to support a 
proposal to add

[[Page 49369]]

severity levels for MS-DRG 245. Our clinical advisors also agreed that 
it would not be clinically appropriate to add severity levels based on 
an isolated year's data fluctuation because this could lead to a lack 
of stability in payments. Therefore, we did not propose to add severity 
levels for MS-DRG 245 for FY 2016. We invited public comments on the 
results of our analysis and our proposal not to create severity levels 
for MS-DRG 245.
    Comment: Several commenters supported the proposal not to create 
severity levels for MS-DRG 245. The commenters stated that the proposal 
was reasonable, given the data and information provided. One commenter 
specifically noted that it understood the rationale of CMS' proposal 
based on analysis of the FY 2013 and FY 2014 data fluctuation. However, 
the commenter recommended that a followup analysis be conducted for the 
FY 2017 IPPS/LTCH PPS proposed rule.
    Response: We appreciate the commenters' support. We intend to 
conduct a followup analysis for MS-DRG 245 in the FY 2017 IPPS/LTCH PPS 
proposed rule as the commenter recommended.
    After consideration of the public comments we received, we are 
finalizing our proposal not to create severity levels for MS-DRG 245 in 
FY 2016.
c. Zilver[supreg] PTX Drug-Eluting Peripheral Stent (Zilver[supreg] 
PTX[supreg])
    The Zilver[supreg] PTX Drug-Eluting Peripheral Stent 
(Zilver[supreg] PTX[supreg]) was approved for new technology add-on 
payments in FY 2014 (78 FR 50583 through 50585). Cases involving the 
Zilver[supreg] PTX[supreg] that are eligible for new technology add-on 
payments are identified by ICD-9-CM procedure code 00.60 (Insertion of 
drug-eluting stent(s) of superficial femoral artery).
    We received a request from the manufacturer for an extension of new 
technology add-on payments for Zilver[supreg] PTX[supreg] in FY 2016. 
In the request, the manufacturer asked CMS to consider three options 
for procedure code 00.60 for FY 2016. The first option was to extend 
the new technology add-on payment through FY 2016. The request to 
extend the new technology add-on payment is addressed in section 
II.I.3.e. of the preamble of the proposed rule and this final rule. The 
second option was to establish a new family of MS-DRGs for procedures 
involving drug-eluting stents used in the peripheral (noncoronary) 
vasculature. The third option was to assign all Zilver[supreg] 
PTX[supreg] cases to MS-DRG 252 even if there is no MCC (which would 
necessitate revising the MS-DRG title to ``Other Vascular Procedures).
    ICD-10-PCS provides the following more detailed procedure codes for 
the insertion of drug-eluting stents of superficial femoral artery:
     047K04Z (Dilation of right femoral artery with drug-
eluting intraluminal device, open approach);
     047K34Z (Dilation of right femoral artery with drug-
eluting intraluminal device, percutaneous approach);
     047K44Z (Dilation of right femoral artery with drug-
eluting intraluminal device, percutaneous endoscopic approach);
     047L04Z (Dilation of left femoral artery with drug-eluting 
intraluminal device, open approach);
     047L34Z (Dilation of left femoral artery with drug-eluting 
intraluminal device, percutaneous approach); and
     047L44Z (Dilation of left femoral artery with drug-eluting 
intraluminal device, percutaneous endoscopic approach).
    We examined claims data for cases involving the drug-eluting 
peripheral stent procedures reported in the December 2014 update of the 
FY 2014 MedPAR file for MS-DRGs 252, 253, and 254 (Other Vascular 
Procedures with MCC, with CC and without CC/MCC, respectively). The 
following table illustrates our findings.

                                    Drug-Eluting Peripheral Stent Procedures
----------------------------------------------------------------------------------------------------------------
                                                                     Number of    Average length
                             MS-DRG                                    cases          of stay      Average costs
----------------------------------------------------------------------------------------------------------------
MS-DRG 252--All cases...........................................          30,696            7.89         $23,935
MS-DRG 252--Cases with procedure code 00.60.....................             133            9.08          32,623
MS-DRG 253--All cases...........................................          34,746            5.68          19,030
MS-DRG 253--Cases with procedure code 00.60.....................             353            4.99          25,396
MS-DRG 254--All cases...........................................          15,394            2.99          12,629
MS-DRG 254--Cases with procedure code 00.60.....................             115            2.62          21,461
----------------------------------------------------------------------------------------------------------------

    Our findings showed that there were only 601 peripheral angioplasty 
cases with a drug-eluting stent reported. Of the 601 peripheral 
angioplasty cases with a drug-eluting stent, 133 cases were in MS-DRG 
252, 353 cases were in MS-DRG 253, and 115 cases were in MS-DRG 254. 
The average costs for the drug-eluting stent cases in MS-DRGs 252, 253, 
and 254 were $32,623, $25,396, and $21,461, respectively. The average 
costs for all cases in MS-DRGs 252, 253, and 254 were $23,935, $19,030, 
and $12,629, respectively. The average costs for the drug-eluting stent 
cases in MS-DRG 253 ($25,396) were higher than the average costs for 
all cases in MS-DRG 252 ($23,935). However, the average costs for the 
drug-eluting stent cases in MS-DRG 254 ($21,461) were lower than the 
average costs for all cases in MS-DRG 252 ($23,935).
    We determined that the small number of cases (601) did not provide 
justification to create a new set of MS-DRGs specifically for 
angioplasty of peripheral arteries using drug-eluting stents. In 
addition, the data did not support assigning all the drug-eluting stent 
cases to the highest severity level (MS-DRG 252), even when there is 
not an MCC, because the average costs for the drug-eluting stent cases 
in MS-DRG 254 ($21,461) were lower than the average costs for all cases 
in MS-DRG 252 ($23,935). The average length of stay for drug-eluting 
stent cases in MS-DRG 254 was 2.62 days compared to 7.89 days for all 
cases in MS-DRG 252. Cases are grouped together based on similar 
clinical and resource criteria.
    Our clinical advisors recommended making no MS-DRG updates for 
peripheral angioplasty cases with a drug-eluting stent and considered 
the current MS-DRG assignment appropriate. Our clinical advisors agreed 
that the small number of peripheral angioplasty cases with a drug-
eluting stent does not support creating a new MS-DRG for this specific 
type of treatment. They stated that the cases are clinically similar to 
other cases within MS-DRGs 252, 253, and 254. Considering the data for 
peripheral angioplasty cases with a drug-eluting stent found reported 
in MS-DRGs 252, 253, and 254 and the input from our clinical advisors, 
in the FY 2016 IPPS/

[[Page 49370]]

LTCH proposed rule (80 FR 24362), we did not propose to make any MS-DRG 
updates for peripheral angioplasty cases with a drug-eluting stent. We 
proposed to maintain the current MS-DRG assignments for these cases in 
MS-DRGs 252, 253, and 254. We invited public comments on our proposal.
    Comment: A number of commenters supported the proposal to maintain 
the current MS-DRG assignments for peripheral angioplasty cases with a 
drug-eluting stent in MS-DRGs 252, 253, and 254. The commenters stated 
that the proposal was reasonable, given the data and information 
provided.
    One commenter, the manufacturer, expressed concern with the 
proposal and asked CMS to reconsider its recommendation for denying the 
request that all Zilver[supreg] PTX[supreg] cases be assigned to MS-DRG 
252 even if there were no MCC. The commenter stated that it is true 
that assignment of all drug-eluting cases to MS-DRG 252 would result in 
an overpayment for cases with a drug-eluting stent that currently are 
assigned to MS-DRG 254. However, the commenter stated that these cases 
represent only 19 percent of the drug-eluting stent cases, and that the 
overpayment of these cases would be modest because the average cost of 
drug-eluting stent cases in MS-DRG 254 is only $2,500 less than the 
average cost of all cases in MS-DRG 252. The commenter stated that 
there would be an underpayment for all the drug-eluting stent cases if 
the cases continue to be assigned to MS-DRGs 252, 253, and 254. The 
commenter stated that implementing its original request would allow 
more adequate payment to hospitals using the Zilver[supreg] PTX[supreg] 
technology and thus remove a potential financial barrier to Medicare 
providers desiring to provide access of this technology to their 
patients.
    Another commenter asserted that it understood CMS' concern that the 
agency could be overpaying for uncomplicated cases by assigning all 
drug-eluting stent cases to MS-DRG 252, even if they did not have a 
MCC. However, the commenter stated that CMS is underpaying all drug-
eluting stent cases by maintaining the current MS-DRG assignments for 
these procedures. The commenter expressed concern regarding patient 
access to this technology.
    Response: We appreciate the commenters' support for our proposal to 
maintain the current MS-DRG for drug-eluting stent cases in MS-DRGs 
252, 253, and 254. Our clinical advisors have also reexamined this 
issue and continue to advise us that the cases reporting procedure code 
00.60 are appropriately classified within MS-DRG 252, 253, or 254.
    In regard to the commenters who disagreed with our proposal, as 
stated earlier, the data do not support assigning all the drug-eluting 
stent cases to the highest severity level (MS-DRG 252), even when there 
is not an MCC. We note that while the average costs for MS-DRG 254 
(lowest severity level) may only represent 19 percent of the drug-
eluting stent cases as shown in the table above, the MS-DRGs are 
comprised of a distinct structure with respect to the types of patients 
within each severity level. This structure is based on an organizing 
principle that patients at the MCC level, the highest severity level, 
are those patients who are generally sicker, consume an increased 
utilization of resources, and require more complex services. 
Disregarding this structure solely for the purpose of increasing 
payment for patients who are not similar in terms of their severity of 
illness and resource utilization would be inconsistent with how the MS-
DRGs are otherwise defined within the classification system.
    In addition, as the requester pointed out in its own comments, ``it 
is the nature of a MS-DRG system that there will be variations in cost 
between different hospitalizations that fall into the same MS-DRG or 
MS-DRGs--each MS-DRG will have some cases that are higher and some 
cases that are lower than the average costs for the entire MS-DRG.'' We 
believe that the higher average costs for the drug-eluting stent cases 
can be attributed to the cost of the device and not necessarily because 
the patients receiving these stents are more severely ill.
    With regard to the commenters' concerns regarding patient access to 
the technology with the expiration of the new technology add-on 
payment, we would expect that hospitals that now have experience with 
the technology and have observed favorable clinical outcomes for their 
patients would nonetheless consider the technology to be worth the 
investment. Accordingly, we will continue to monitor cases with the 
Zilver[supreg] PTX[supreg] technology to determine if modifications are 
warranted to the MS-DRG structure in future rulemaking.
    After consideration of the public comments we received, we are 
finalizing our proposal to maintain the current structure for MS-DRG 
assignments for procedures involving drug-eluting stents in MS-DRG 252, 
253, or 254 for FY 2016.
    d. Percutaneous Mitral Valve Repair System--Proposed Revision of 
ICD-10-PCS Version 32 Logic
    We received a comment which brought to our attention that the ICD-
10 MS-DRGs Version 32 assignment for ICD-10-PCS procedure code 02UG3JZ 
(Supplement mitral valve with synthetic substitute, percutaneous 
approach) does not accurately replicate the ICD-9-CM MS-DRGs Version 
32, which assigns this procedure code to the following MS-DRGs:
     MS-DRG 231 (Coronary Bypass with PTCA with MCC);
     MS-DRG 232 (Coronary Bypass with PTCA without MCC);
     MS-DRG 246 (Percutaneous Cardiovascular Procedure with 
Drug-Eluting Stent with MCC or 4+ Vessels/Stents);
     MS DRG 247 (Percutaneous Cardiovascular Procedure with 
Drug-Eluting Stent without MCC);
     MS-DRG 248 (Percutaneous Cardiovascular Procedure with 
Non-Drug-Eluting Stent with MCC or 4+ Vessels/Stents);
     MS DRG 249 (Percutaneous Cardiovascular Procedure with 
Non-Drug-Eluting Stent without MCC);
     MS-DRG 250 (Percutaneous Cardiovascular Procedure without 
Coronary Artery Stent with MCC); and
     MS-DRG 251 (Percutaneous Cardiovascular Procedure without 
Coronary Artery Stent without MCC).
    We agree with the commenter that the ICD-10 MS-DRGs logic should be 
consistent with the ICD-9 MS-DRGs logic; that is, the ICD-10 MS-DRGs 
Version 32 should replicate the ICD-9-CM MS-DRGs Version 32. Therefore, 
in the FY 2016 IPPS/LTCH PPS proposed rule, for the proposed FY 2016 
ICD-10 MS-DRGs Version 33, we proposed to assign ICD-10-PCS procedure 
code 02UG3JZ to MS-DRGs 231 and 232 and MS-DRGs 246 through 251 (80 FR 
24362). We invited public comments on this proposal.
    Comment: Several commenters agreed with the proposal to assign ICD-
10-PCS procedure code 02UG3JZ to ICD-10 MS-DRGs 231 and 232 and MS-DRGs 
246 through 251 to accurately replicate the ICD-9-CM MS-DRGs Version 32 
logic. The commenters also noted that, as discussed in the FY 2016 
IPPS/LTCH PPS proposed rule (80 FR 24356 through 24359), for the FY 
2016 ICD-10 MS-DRGs Version 33, CMS proposed to create two new ICD-10 
MS-DRGs which include ICD-10-PCS procedure code 02UG3JZ. The commenters 
recognized that, if proposed new MS-DRGs 273 and 274 (Percutaneous 
Intracardiac Procedures with and without MCC, respectively) were 
finalized for FY 2016, ICD-10-PCS procedure code 02UG3JZ would then 
group to those new MS-DRGs. The

[[Page 49371]]

commenters requested that CMS confirm the MS-DRG assignment.
    Response: We appreciate the commenters' support for our proposal to 
accurately replicate the assignment of ICD-10-PCS procedure code 
02UG3JZ under the ICD-10 MS-DRGs. As discussed earlier in section 
III.G.3.a. of this final rule, we are finalizing our proposal to create 
ICD-10 MS-DRGs 273 and 274 (Percutaneous Intracardiac Procedures with 
and without MCC, respectively). After consideration of the public 
comments we received, we are confirming as final policy for the FY 2016 
ICD-10 MS-DRGs Version 33 that ICD-10-PCS procedure code 02UG3JZ 
(Supplement mitral valve with synthetic substitute, percutaneous 
approach) is assigned to new ICD-10 MS-DRGs 273 and 274 and will 
continue to be assigned to MS-DRGs 231 and 232 (Coronary Bypass with 
PTC with MCC and without MCC, respectively).
e. Major Cardiovascular Procedures: Zenith[supreg] Fenestrated 
Abdominal Aortic Aneurysm (AAA) Graft
    New technology add-on payments for the Zenith[supreg] Fenestrated 
Abdominal Aortic Aneurysm (AAA) Graft (Zenith[supreg] F. Graft) will 
end on September 30, 2015. Cases involving the Zenith[supreg] F. Graft 
are identified by ICD-9-CM procedure code 39.78 (Endovascular 
implantation of branching or fenestrated graft(s) in aorta) in MS-DRGs 
237 and 238 (Major Cardiovascular Procedures with and without MCC, 
respectively). For additional information on the Zenith[supreg] F. 
Graft, we refer readers to the FY 2015 IPPS/LTCH PPS final rule (79 FR 
49921 through 49922).
    We received a request to reassign procedures described by ICD-9-CM 
procedure code 39.78 to the highest severity level in MS-DRGs 237 and 
238, including in instances when there is not an MCC present, or to 
create a new MS-DRG that would contain all endovascular aneurysm repair 
procedures. We note that, in addition to ICD-9-CM procedure code 39.78, 
ICD-9-CM procedure code 39.71 (Endovascular implantation of other graft 
in abdominal aorta) also describes endovascular aneurysm repair 
procedures.
    There are a number of ICD-10-PCS code translations that provide 
more detailed and specific information for each of ICD-9-CM codes 39.71 
and 39.78 that also currently group to MS-DRGs 237 and 238 in the ICD-
10 MS-DRGs Version 32. The comparable ICD-10-PCS code translations for 
ICD-9-CM procedure code 39.71 and 39.78 are shown in the following 
tables:

     ICD-10-PCS Code Translations for ICD-9-CM Procedure Code 39.71
------------------------------------------------------------------------
     ICD-10-PCS Code                      Code description
------------------------------------------------------------------------
04U03JZ..................  Supplement abdominal aorta with synthetic
                            substitute, percutaneous approach.
04U04JZ..................  Supplement abdominal aorta with synthetic
                            substitute, percutaneous endoscopic
                            approach.
04V03DZ..................  Restriction of abdominal aorta with
                            intraluminal device, percutaneous approach.
04V04DZ..................  Restriction of abdominal aorta with
                            intraluminal device, percutaneous endoscopic
                            approach.
------------------------------------------------------------------------


     ICD-10-PCS Code Translations for ICD-9-CM Procedure Code 39.78
------------------------------------------------------------------------
     ICD-10-PCS Code                      Code description
------------------------------------------------------------------------
04V03DZ..................  Restriction of abdominal aorta with
                            intraluminal device, percutaneous approach.
04V04DZ..................  Restriction of abdominal aorta with
                            intraluminal device, percutaneous endoscopic
                            approach.
------------------------------------------------------------------------
Note: As discussed later in this section, the FY 2016 IPPS/LTCH PPS
  proposed rule listed the dilation codes ICD-10-PCS 04793DZ through
  04754DZ as possible translations for ICD-9-CM procedure code 39.78.
  For this final rule, we are only listing those codes that as
  ``standalone'' procedures are assigned to new MS-DRGs 268 and 269.

    We analyzed claims data reporting ICD-9-CM procedure code 39.78 for 
cases assigned to MS-DRGs 237 and 238 in the December 2014 update of 
the FY 2014 MedPAR file. We found a total of 18,340 cases, with an 
average length of stay of 9.46 days and average costs of $36,355 in MS-
DRG 237. We found 332 cases reporting ICD-9-CM procedure code 39.78, 
with an average length of stay of 8.46 days and average costs of 
$51,397 in MS-DRG 237. For MS-DRG 238, we found a total of 32,227 
cases, with an average length of stay of 3.72 days and average costs of 
$25,087. We found 1,927 cases reporting ICD-9-CM procedure code 39.78, 
with an average length of stay of 2.52 days and average costs of 
$31,739 in MS-DRG 238.

                                       Zenith Fenestrated Graft Procedures
----------------------------------------------------------------------------------------------------------------
                                                                     Number of    Average length
                             MS-DRG                                    cases          of stay      Average costs
----------------------------------------------------------------------------------------------------------------
MS-DRG 237--All cases...........................................          18,340            9.46         $36,355
MS-DRG 237--Cases with procedure code 39.78.....................             332            8.46          51,397
MS-DRG 238--All cases...........................................          32,227            3.72          25,087
MS-DRG 238--Cases with procedure code 39.78.....................           1,927            2.52          31,739
----------------------------------------------------------------------------------------------------------------

    As illustrated in the table above, the results of the data analysis 
indicate that the average costs for cases reporting procedure code 
39.78 assigned to MS-DRG 238 were higher than the average costs for all 
cases in MS-DRG 238 ($31,739 compared to $25,087). In addition, the 
average costs for the 1,927 cases reporting procedure code 39.78 
assigned to MS-DRG 238 were $4,616 less than the costs of all cases 
assigned to MS-DRG 237. We determined that moving cases reporting 
procedure code 39.78 from MS-DRG 238 to MS-DRG 237 would result in 
overpayments. We

[[Page 49372]]

also noted that the average length of stay for the 1,927 cases 
reporting procedure code 39.78 in MS-DRG 238 was 2.52 days in 
comparison to the average length of stay for all cases in MS-DRG 237 of 
9.46 days. Our clinical advisors did not agree with moving cases 
reporting procedure code 39.78 to a higher severity level (with MCC) 
MS-DRG.
    We believe that the higher average costs could be attributed to the 
cost of the device. The Zenith[supreg] F. Graft is the only fenestrated 
graft device currently approved by the FDA. Therefore, this 
manufacturer is able to set its own costs in the market. We pointed out 
that the IPPS is not designed to pay solely for the cost of devices. 
More importantly, moving cases that greatly differ in their severity of 
illness and complexity of resources into a higher severity level MS-
DRG, in the absence of an MCC, would conflict with the objective of the 
MS-DRGs, which is to maintain homogeneous subgroups that are different 
from one another in terms of utilization of resources, that have enough 
volume to be meaningful, and that improve our ability to explain 
variance in resource use (72 FR 47169). Therefore, we did not propose 
to reassign all cases reporting procedure code 39.78 from MS-DRG 238 to 
MS-DRG 237, as the commenter requested.
    However, we recognized that the results of the data analysis also 
demonstrated that the average costs for cases reporting ICD-9-CM 
procedure code 39.78 are higher in both MS-DRG 237 and MS-DRG 238 in 
comparison to all cases in each respective MS-DRG. As these higher 
average costs could be attributable to the cost of the device, we noted 
the commenter's concern that the end of the new technology add-on 
payment for Zenith[supreg] F. Graft, effective September 30, 2015, may 
result in reduced payment to hospitals and potentially lead to issues 
involving access to care for the subset of beneficiaries who would 
benefit from treatment with the Zenith[supreg] F. Graft. We continued 
to review the data to explore other alternatives as we analyzed 
additional claims data in response to the second part of the request 
from the commenter; that is, to create a new MS-DRG that would contain 
all endovascular aneurysm repair procedures.
    In our evaluation of the claims data in response to the request to 
create a new MS-DRG, we again reviewed claims data from the December 
2014 update of the FY 2014 MedPAR file. We began our analysis by 
examining claims data for cases reporting ICD-9-CM procedure codes 
39.71 and 39.78 assigned to MS-DRGs 237 and 238. Our findings are shown 
in the table below.

                                     Endovascular Abdominal Aorta Procedures
----------------------------------------------------------------------------------------------------------------
                                                                     Number of    Average length
                             MS-DRG                                    cases          of stay      Average costs
----------------------------------------------------------------------------------------------------------------
MS-DRG 237--All cases...........................................          18,340            9.46         $36,355
MS-DRG 237--Cases with procedure codes 39.71 and 39.78..........           2,425            8.34          47,363
MS-DRG 238--All cases...........................................          32,227            3.72          25,087
MS-DRG 238--Cases with procedure codes 39.71 and 39.78..........          16,502            2.27          28,998
----------------------------------------------------------------------------------------------------------------

    As shown in the table above, the average costs for cases involving 
endovascular abdominal aorta aneurysm repair procedures assigned to MS-
DRG 237 were higher than the average costs of all cases assigned to MS-
DRGs 237. The average costs for cases reporting ICD-9-CM procedure 
codes 39.71 and 39.78 assigned to MS-DRG 237 were $47,363 compared to 
the average costs of $36,355 for all cases assigned to MS-DRG 237 and 
$25,087 for all cases assigned to MS-DRG 238. Similarly, the average 
costs for cases reporting ICD-9-CM procedure codes 39.71 and 39.78 
assigned to MS-DRG 238 were higher than the average costs of all cases 
assigned to MS-DRG 238 ($28,998 compared to $25,087). The average 
length of stay for cases reporting ICD-9-CM procedure codes 39.71 and 
39.78 in MS-DRGs 237 and 238 were also shorter than the average length 
of stay for all cases in the respective MS-DRG.
    Our clinical advisors did not support creating a new MS-DRG 
specifically for endovascular abdominal aortic aneurysm repair 
procedures only. Therefore, we reviewed other procedure codes currently 
assigned to MS-DRGs 237 and 238 and found that there were a number of 
procedures with varying resource requirements and clinical indications 
that could be analyzed further. We agreed with our clinical advisors 
that further analysis was warranted to determine how we could better 
recognize resource utilization, clinical complexity, and average costs 
by separating the more complex, more invasive, and more expensive 
procedures used to treat more severely ill individuals from the less 
complex, less invasive, and less expensive procedures currently grouped 
to these MS-DRGs.
    Therefore, we evaluated all of the procedures currently assigned to 
MS-DRGs 237 and 238. In our evaluation, we found that MS-DRGs 237 and 
238 contained two distinct groups of procedures. We found a high volume 
of less invasive procedures, such as pericardiotomies and pulsation 
balloon implants, that had substantially lower costs than the more 
invasive procedures, such as open and endovascular repairs of the aorta 
with replacement grafts. We found that the more invasive procedures 
were primarily associated with procedures on the aorta and heart assist 
procedures.
    For this next phase of our analysis, the following procedure codes 
were designated as the more complex, more invasive procedures:
     37.41 (Implantation of prosthetic cardiac support device 
around the heart);
     37.49 (Other repair of heart and pericardium);
     37.55 (Removal of internal biventricular heart replacement 
system);
     37.64 (Removal of external heart assist system(s) or 
device(s));
     38.04 (Incision of vessel, aorta);
     38.14 (Endarterectomy, aorta);
     38.34 (Resection of vessel with anastomosis, aorta);
     38.44 (Resection of vessel with replacement, aorta, 
abdominal);
     38.64 (Other excision of vessels, aorta, abdominal);
     38.84 (Other surgical occlusion of vessels, aorta, 
abdominal);
     39.24 (Aorta-renal bypass);
     39.71 (Endovascular implantation of other graft in 
abdominal aorta); and
     39.78 (Endovascular implantation of branching or 
fenestrated graft(s) in aorta).
    There are a number of ICD-10-PCS code translations that provide 
more detailed and specific information for each of the ICD-9-CM codes 
listed above that also currently group to MS-DRGs 237 and 238 in the 
ICD-10 MS-DRGs Version 32. The comparable ICD-10-PCS code translations 
for these ICD-

[[Page 49373]]

9-CM procedure codes are shown in the following table:

     ICD-10-PCS Code Translations for ICD-9-CM Procedure Code 37.41
------------------------------------------------------------------------
     ICD-10-PCS Code                      Code description
------------------------------------------------------------------------
02UA0JZ..................  Supplement heart with synthetic substitute,
                            open approach.
02UA3JZ..................  Supplement heart with synthetic substitute,
                            percutaneous approach.
02UA4JZ..................  Supplement heart with synthetic substitute,
                            percutaneous endoscopic approach.
------------------------------------------------------------------------

    For the ICD-9-CM codes that result in greater than 50 ICD-10-PCS 
comparable code translations, we refer readers to Table 6P (ICD-10-PCS 
Code Translations for MS-DRG Changes) for this FY 2016 final rule 
(which is available via the Internet on the CMS Web site at: http://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/AcuteInpatientPPS/index.html). The table includes the MDC topic, the 
ICD-9-CM code, and the ICD-10-PCS code translations.

     ICD-10-PCS Code Translations for ICD-9-CM Procedure Code 37.49
------------------------------------------------------------------------
 
-------------------------------------------------------------------------
The comparable ICD-10-PCS code translations for ICD-9-CM procedure code
 37.49 are shown in Table 6P.1a for this final rule that is available
 via the Internet on the CMS Web site at: http://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/AcuteInpatientPPS/index.html.
------------------------------------------------------------------------


     ICD-10-PCS Code Translations for ICD-9-CM Procedure Code 37.55
------------------------------------------------------------------------
     ICD-10-PCS Code                      Code description
------------------------------------------------------------------------
02PA0QZ..................  Removal of implantable heart assist system
                            from heart, open approach.
02PA3QZ..................  Removal of implantable heart assist system
                            from heart, percutaneous approach.
02PA4QZ..................  Removal of implantable heart assist system
                            from heart, percutaneous endoscopic
                            approach.
------------------------------------------------------------------------


     ICD-10-PCS Code Translations for ICD-9-CM Procedure Code 37.64
------------------------------------------------------------------------
     ICD-10-PCS Code                      Code description
------------------------------------------------------------------------
02PA0RZ..................  Removal of external heart assist system from
                            heart, open approach.
02PA3RZ..................  Removal of external heart assist system from
                            heart, percutaneous approach.
02PA4RZ..................  Removal of external heart assist system from
                            heart, percutaneous endoscopic approach.
------------------------------------------------------------------------


     ICD-10-PCS Code Translations for ICD-9-CM Procedure Code 38.04
------------------------------------------------------------------------
     ICD-10-PCS Code                      Code description
------------------------------------------------------------------------
02CW0ZZ..................  Extirpation of matter from thoracic aorta,
                            open approach.
02CW3ZZ..................  Extirpation of matter from thoracic aorta,
                            percutaneous approach.
02CW4ZZ..................  Extirpation of matter from thoracic aorta,
                            percutaneous endoscopic approach.
04C00ZZ..................  Extirpation of matter from abdominal aorta,
                            open approach.
04C03ZZ..................  Extirpation of matter from abdominal aorta,
                            percutaneous approach.
04C04ZZ..................  Extirpation of matter from abdominal aorta,
                            percutaneous endoscopic approach.
------------------------------------------------------------------------


     ICD-10-PCS Code Translations for ICD-9-CM Procedure Code 38.14
------------------------------------------------------------------------
     ICD-10-PCS Code                      Code description
------------------------------------------------------------------------
02CW0ZZ..................  Extirpation of matter from thoracic aorta,
                            open approach.
02CW3ZZ..................  Extirpation of matter from thoracic aorta,
                            percutaneous approach.
02CW4ZZ..................  Extirpation of matter from thoracic aorta,
                            percutaneous endoscopic approach.
04C00ZZ..................  Extirpation of matter from abdominal aorta,
                            open approach.
04C03ZZ..................  Extirpation of matter from abdominal aorta,
                            percutaneous approach.
04C04ZZ..................  Extirpation of matter from abdominal aorta,
                            percutaneous endoscopic approach.
------------------------------------------------------------------------


[[Page 49374]]


     ICD-10-PCS Code Translations for ICD-9-CM Procedure Code 38.34
------------------------------------------------------------------------
     ICD-10-PCS Code                      Code description
------------------------------------------------------------------------
02BW0ZZ..................  Excision of thoracic aorta, open approach.
02BW4ZZ..................  Excision of thoracic aorta, percutaneous
                            endoscopic approach.
04B00ZZ..................  Excision of abdominal aorta, open approach.
04B04ZZ..................  Excision of abdominal aorta, percutaneous
                            endoscopic approach.
------------------------------------------------------------------------


     ICD-10-PCS Code Translations for ICD-9-CM Procedure Code 38.44
------------------------------------------------------------------------
     ICD-10-PCS Code                      Code description
------------------------------------------------------------------------
04R007Z..................  Replacement of abdominal aorta with
                            autologous tissue substitute, open approach.
04R00JZ..................  Replacement of abdominal aorta with synthetic
                            substitute, open approach.
04R00KZ..................  Replacement of abdominal aorta with
                            nonautologous tissue substitute, open
                            approach.
04R047Z..................  Replacement of abdominal aorta with
                            autologous tissue substitute, percutaneous
                            endoscopic approach.
04R04JZ..................  Replacement of abdominal aorta with synthetic
                            substitute, percutaneous endoscopic
                            approach.
04R04KZ..................  Replacement of abdominal aorta with
                            nonautologous tissue substitute,
                            percutaneous endoscopic approach.
------------------------------------------------------------------------


     ICD-10-PCS Code Translations for ICD-9-CM Procedure Code 38.64
------------------------------------------------------------------------
     ICD-10-PCS Code                      Code description
------------------------------------------------------------------------
04500ZZ..................  Destruction of abdominal aorta, open
                            approach.
04503ZZ..................  Destruction of abdominal aorta, percutaneous
                            approach.
04504ZZ..................  Destruction of abdominal aorta, percutaneous
                            endoscopic approach.
04B00ZZ..................  Excision of abdominal aorta, open approach.
04B03ZZ..................  Excision of abdominal aorta, percutaneous
                            approach.
04B04ZZ..................  Excision of abdominal aorta, percutaneous
                            endoscopic approach.
------------------------------------------------------------------------


     ICD-10-PCS Code Translations for ICD-9-CM Procedure Code 38.84
------------------------------------------------------------------------
     ICD-10-PCS Code                      Code description
------------------------------------------------------------------------
04L00CZ..................  Occlusion of abdominal aorta with
                            extraluminal device, open approach.
04L00DZ..................  Occlusion of abdominal aorta with
                            intraluminal device, open approach.
04L00ZZ..................  Occlusion of abdominal aorta, open approach.
04L03CZ..................  Occlusion of abdominal aorta with
                            extraluminal device, percutaneous approach.
04L03DZ..................  Occlusion of abdominal aorta with
                            intraluminal device, percutaneous approach.
04L03ZZ..................  Occlusion of abdominal aorta, percutaneous
                            approach.
04L04CZ..................  Occlusion of abdominal aorta with
                            extraluminal device, percutaneous endoscopic
                            approach.
04L04DZ..................  Occlusion of abdominal aorta with
                            intraluminal device, percutaneous endoscopic
                            approach.
04L04ZZ..................  Occlusion of abdominal aorta, percutaneous
                            endoscopic approach.
------------------------------------------------------------------------


     ICD-10-PCS Code Translations for ICD-9-CM Procedure Code 39.24
------------------------------------------------------------------------
     ICD-10-PCS Code                      Code description
------------------------------------------------------------------------
0410093..................  Bypass abdominal aorta to right renal artery
                            with autologous venous tissue, open
                            approach.
0410094..................  Bypass abdominal aorta to left renal artery
                            with autologous venous tissue, open
                            approach.
0410095..................  Bypass abdominal aorta to bilateral renal
                            artery with autologous venous tissue, open
                            approach.
04100A3..................  Bypass abdominal aorta to right renal artery
                            with autologous arterial tissue, open
                            approach.
04100A4..................  Bypass abdominal aorta to left renal artery
                            with autologous arterial tissue, open
                            approach.
04100A5..................  Bypass abdominal aorta to bilateral renal
                            artery with autologous arterial tissue, open
                            approach.
04100J3..................  Bypass abdominal aorta to right renal artery
                            with synthetic substitute, open approach.
04100J4..................  Bypass abdominal aorta to left renal artery
                            with synthetic substitute, open approach.
04100J5..................  Bypass abdominal aorta to bilateral renal
                            artery with synthetic substitute, open
                            approach.
04100K3..................  Bypass abdominal aorta to right renal artery
                            with nonautologous tissue substitute, open
                            approach.
04100K4..................  Bypass abdominal aorta to left renal artery
                            with nonautologous tissue substitute, open
                            approach.
04100K5..................  Bypass abdominal aorta to bilateral renal
                            artery with nonautologous tissue substitute,
                            open approach.
04100Z3..................  Bypass abdominal aorta to right renal artery,
                            open approach.
04100Z4..................  Bypass abdominal aorta to left renal artery,
                            open approach.
04100Z5..................  Bypass abdominal aorta to bilateral renal
                            artery, open approach.
0410493..................  Bypass abdominal aorta to right renal artery
                            with autologous venous tissue, percutaneous
                            endoscopic approach.
0410494..................  Bypass abdominal aorta to left renal artery
                            with autologous venous tissue, percutaneous
                            endoscopic approach.
0410495..................  Bypass abdominal aorta to bilateral renal
                            artery with autologous venous tissue,
                            percutaneous endoscopic approach.
04104A3..................  Bypass abdominal aorta to right renal artery
                            with autologous arterial tissue,
                            percutaneous endoscopic approach.

[[Page 49375]]

 
04104A4..................  Bypass abdominal aorta to left renal artery
                            with autologous arterial tissue,
                            percutaneous endoscopic approach.
04104A5..................  Bypass abdominal aorta to bilateral renal
                            artery with autologous arterial tissue,
                            percutaneous endoscopic approach.
04104J3..................  Bypass abdominal aorta to right renal artery
                            with synthetic substitute, percutaneous
                            endoscopic approach.
04104J4..................  Bypass abdominal aorta to left renal artery
                            with synthetic substitute, percutaneous
                            endoscopic approach.
04104J5..................  Bypass abdominal aorta to bilateral renal
                            artery with synthetic substitute,
                            percutaneous endoscopic approach.
04104K3..................  Bypass abdominal aorta to right renal artery
                            with nonautologous tissue substitute,
                            percutaneous endoscopic approach
04104K4..................  Bypass abdominal aorta to left renal artery
                            with nonautologous tissue substitute,
                            percutaneous endoscopic approach.
04104K5..................  Bypass abdominal aorta to bilateral renal
                            artery with nonautologous tissue substitute,
                            percutaneous endoscopic approach.
04104Z3..................  Bypass abdominal aorta to right renal artery,
                            percutaneous endoscopic approach.
04104Z4..................  Bypass abdominal aorta to left renal artery,
                            percutaneous endoscopic approach.
04104Z5..................  Bypass abdominal aorta to bilateral renal
                            artery, percutaneous endoscopic approach
------------------------------------------------------------------------


     ICD-10-PCS Code Translations for ICD-9-CM Procedure Code 39.71
------------------------------------------------------------------------
     ICD-10-PCS Code                      Code description
------------------------------------------------------------------------
04U03JZ..................  Supplement abdominal aorta with synthetic
                            substitute, percutaneous approach.
04U04JZ..................  Supplement abdominal aorta with synthetic
                            substitute, percutaneous endoscopic
                            approach.
04V03DZ..................  Restriction of abdominal aorta with
                            intraluminal device, percutaneous approach.
04V04DZ..................  Restriction of abdominal aorta with
                            intraluminal device, percutaneous endoscopic
                            approach
------------------------------------------------------------------------


     ICD-10-PCS Code Translations for ICD-9-CM Procedure Code 39.78
------------------------------------------------------------------------
     ICD-10-PCS Code                      Code description
------------------------------------------------------------------------
04793DZ..................  Dilation of right renal artery with
                            intraluminal device, percutaneous approach.
04794DZ..................  Dilation of right renal artery with
                            intraluminal device, percutaneous endoscopic
                            approach.
047A3DZ..................  Dilation of left renal artery with
                            intraluminal device, percutaneous approach.
047A4DZ..................  Dilation of left renal artery with
                            intraluminal device, percutaneous endoscopic
                            approach.
04753DZ..................  Dilation of superior mesenteric artery with
                            intraluminal device, percutaneous approach.
04754DZ..................  Dilation of superior mesenteric artery with
                            intraluminal device, percutaneous endoscopic
                            approach.
04U03JZ..................  Supplement abdominal aorta with synthetic
                            substitute, percutaneous approach.
04U04JZ..................  Supplement abdominal aorta with synthetic
                            substitute, percutaneous endoscopic
                            approach.
04V03DZ..................  Restriction of abdominal aorta with
                            intraluminal device, percutaneous approach.
04V04DZ..................  Restriction of abdominal aorta with
                            intraluminal device, percutaneous endoscopic
                            approach.
------------------------------------------------------------------------

    For the next phase of our analysis, the procedure codes shown in 
the following table were designated as the less complex, less invasive 
procedures.

 ICD-9-CM Procedure Codes That Were Designated as the Less Complex, Less
                           Invasive Procedures
------------------------------------------------------------------------
 ICD-9-CM Procedure code                  Code description
------------------------------------------------------------------------
35.00....................  Closed heart valvotomy, unspecified valve.
35.01....................  Closed heart valvotomy, aortic valve.
35.02....................  Closed heart valvotomy, mitral valve.
35.03....................  Closed heart valvotomy, pulmonary valve.
35.04....................  Closed heart valvotomy, tricuspid valve.
37.12....................  Pericardiotomy.
37.24....................  Biopsy of pericardium.
37.31....................  Pericardiectomy.
37.61....................  Implant of pulsation balloon.
37.67....................  Implantation of cardiomyostimulation system.
37.91....................  Open chest cardiac massage.
37.99....................  Other operations on heart and pericardium.
38.05....................  Incision of vessel, other thoracic vessels.
38.06....................  Incision of vessel, abdominal arteries.
38.07....................  Incision of vessel, abdominal veins.
38.15....................  Endarterectomy, other thoracic vessels.
38.16....................  Endarterectomy, abdominal arteries.
38.35....................  Resection of vessel with anastomosis, other
                            thoracic vessels.
38.36....................  Resection of vessel with anastomosis,
                            abdominal arteries.
38.37....................  Resection of vessel with anastomosis,
                            abdominal veins.
38.46....................  Resection of vessel with replacement,
                            abdominal arteries.

[[Page 49376]]

 
38.47....................  Resection of vessel with replacement,
                            abdominal veins.
38.55....................  Ligation and stripping of varicose veins,
                            other thoracic vessels.
38.65....................  Other excision of vessels, thoracic vessels.
38.66....................  Other excision of vessels, abdominal
                            arteries.
38.67....................  Other excision of vessels, abdominal veins.
38.85....................  Other surgical occlusion of vessels, thoracic
                            vessels.
38.86....................  Other surgical occlusion of vessels,
                            abdominal arteries.
38.87....................  Other surgical occlusion of vessels,
                            abdominal veins.
39.0.....................  Systemic to pulmonary artery shunt.
39.1.....................  Intra-abdominal venous shunt.
39.21....................  Caval-pulmonary artery anastomosis.
39.22....................  Aorta-subclavian-carotid bypass.
39.23....................  Other intrathoracic vascular shunt or bypass.
39.25....................  Aorta-iliac-femoral bypass.
39.26....................  Other intra-abdominal vascular shunt or
                            bypass.
39.52....................  Other repair of aneurysm.
39.54....................  Re-entry operation (aorta).
39.72....................  Endovascular (total) embolization or
                            occlusion of head and neck vessels.
39.75....................  Endovascular embolization or occlusion of
                            vessel(s) of head or neck using bare coils.
39.76....................  Endovascular embolization or occlusion of
                            vessel(s) of head or neck using bioactive
                            coils.
39.79....................  Other endovascular procedures on other
                            vessels.
------------------------------------------------------------------------

    There are a number of ICD-10-PCS code translations that provide 
more detailed and specific information for each of the ICD-9-CM codes 
listed in the table immediately above that also currently group to MS-
DRGs 237 and 238 in the ICD-10 MS-DRGs Version 32. The comparable ICD-
10-PCS code translations for these ICD-9-CM procedure codes are shown 
in the following tables:

     ICD-10-PCS Code Translations for ICD-9-CM Procedure Code 35.00
------------------------------------------------------------------------
ICD-10-PCS Procedure code                 Code description
------------------------------------------------------------------------
02NF3ZZ..................  Release aortic valve, percutaneous approach.
02NF4ZZ..................  Release aortic valve, percutaneous endoscopic
                            approach.
02NG3ZZ..................  Release mitral valve, percutaneous approach.
02NG4ZZ..................  Release mitral valve, percutaneous endoscopic
                            approach.
02NH3ZZ..................  Release pulmonary valve, percutaneous
                            approach.
02NH4ZZ..................  Release pulmonary valve, percutaneous
                            endoscopic approach.
02NJ3ZZ..................  Release tricuspid valve, percutaneous
                            approach.
02NJ4ZZ..................  Release tricuspid valve, percutaneous
                            endoscopic approach.
------------------------------------------------------------------------


     ICD-10-PCS Code Translations for ICD-9-CM Procedure Code 35.01
------------------------------------------------------------------------
ICD-10-PCS Procedure code                 Code description
------------------------------------------------------------------------
02CF3ZZ..................  Extirpation of matter from aortic valve,
                            percutaneous approach.
02CF4ZZ..................  Extirpation of matter from aortic valve,
                            percutaneous endoscopic approach.
02NF3ZZ..................  Release aortic valve, percutaneous approach.
02NF4ZZ..................  Release aortic valve, percutaneous endoscopic
                            approach.
------------------------------------------------------------------------


     ICD-10-PCS Code Translations for ICD-9-CM Procedure Code 35.02
------------------------------------------------------------------------
ICD-10-PCS Procedure code                 Code description
------------------------------------------------------------------------
02CG3ZZ..................  Extirpation of matter from mitral valve,
                            percutaneous approach.
02CG4ZZ..................  Extirpation of matter from mitral valve,
                            percutaneous endoscopic approach.
02NG3ZZ..................  Release mitral valve, percutaneous approach.
02NG4ZZ..................  Release mitral valve, percutaneous endoscopic
                            approach.
------------------------------------------------------------------------


[[Page 49377]]


     ICD-10-PCS Code Translations for ICD-9-CM Procedure Code 35.03
------------------------------------------------------------------------
     ICD-10-PCS Code                      Code description
------------------------------------------------------------------------
02CH3ZZ..................  Extirpation of matter from pulmonary valve,
                            percutaneous approach.
02CH4ZZ..................  Extirpation of matter from pulmonary valve,
                            percutaneous endoscopic approach.
02NH3ZZ..................  Release Pulmonary Valve, Percutaneous
                            Approach.
02NH4ZZ..................  Release Pulmonary Valve, Percutaneous
                            Endoscopic Approach.
------------------------------------------------------------------------


     ICD-10-PCS Code Translations for ICD-9-CM Procedure Code 35.04
------------------------------------------------------------------------
     ICD-10-PCS Code                      Code description
------------------------------------------------------------------------
02CJ3ZZ..................  Extirpation of matter from tricuspid valve,
                            percutaneous approach.
02CJ4ZZ..................  Extirpation of matter from tricuspid valve,
                            percutaneous endoscopic approach.
02NJ3ZZ..................  Release tricuspid valve, percutaneous
                            approach.
02NJ4ZZ..................  Release tricuspid valve, percutaneous
                            endoscopic approach.
------------------------------------------------------------------------


     ICD-10-PCS Code Translations for ICD-9-CM Procedure Code 37.12
------------------------------------------------------------------------
     ICD-10-PCS Code                      Code description
------------------------------------------------------------------------
02CN0ZZ..................  Extirpation of matter from pericardium, open
                            approach.
02CN3ZZ..................  Extirpation of matter from pericardium,
                            percutaneous approach.
02CN4ZZ..................  Extirpation of matter from pericardium,
                            percutaneous endoscopic approach.
02HN00Z..................  Insertion of pressure sensor monitoring
                            device into pericardium, open approach.
02HN02Z..................  Insertion of monitoring device into
                            pericardium, open approach.
02HN30Z..................  Insertion of pressure sensor monitoring
                            device into pericardium, percutaneous
                            approach.
02HN32Z..................  Insertion of monitoring device into
                            pericardium, percutaneous approach.
02HN40Z..................  Insertion of pressure sensor monitoring
                            device into pericardium, percutaneous
                            endoscopic approach.
02HN42Z..................  Insertion of monitoring device into
                            pericardium, percutaneous endoscopic
                            approach.
02NN0ZZ..................  Release pericardium, open approach.
02NN3ZZ..................  Release pericardium, percutaneous approach.
02NN4ZZ..................  Release pericardium, percutaneous endoscopic
                            approach.
0W9D00Z..................  Drainage of pericardial cavity with drainage
                            device, open approach.
0W9D0ZX..................  Drainage of pericardial cavity, open
                            approach, diagnostic.
0W9D0ZZ..................  Drainage of pericardial cavity, open
                            approach.
0WCD0ZZ..................  Extirpation of matter from pericardial
                            cavity, open approach.
0WCD3ZZ..................  Extirpation of matter from pericardial
                            cavity, percutaneous approach.
0WCD4ZZ..................  Extirpation of matter from pericardial
                            cavity, percutaneous endoscopic approach.
0WHD03Z..................  Insertion of infusion device into pericardial
                            cavity, open approach.
0WHD0YZ..................  Insertion of other device into pericardial
                            cavity, open approach.
0WHD33Z..................  Insertion of infusion device into pericardial
                            cavity, percutaneous approach.
0WHD3YZ..................  Insertion of other device into pericardial
                            cavity, percutaneous approach.
0WHD43Z..................  Insertion of infusion device into pericardial
                            cavity, percutaneous endoscopic approach.
0WHD4YZ..................  Insertion of other device into pericardial
                            cavity, percutaneous endoscopic approach.
0WPD00Z..................  Removal of drainage device from pericardial
                            cavity, open approach.
0WPD01Z..................  Removal of radioactive element from
                            pericardial cavity, open approach.
0WPD03Z..................  Removal of infusion device from pericardial
                            cavity, open approach.
0WPD0YZ..................  Removal of other device from pericardial
                            cavity, open approach.
0WPD30Z..................  Removal of drainage device from pericardial
                            cavity, percutaneous approach.
0WPD31Z..................  Removal of radioactive element from
                            pericardial cavity, percutaneous approach.
0WPD33Z..................  Removal of infusion device from pericardial
                            cavity, percutaneous approach.
0WPD3YZ..................  Removal of other device from pericardial
                            cavity, percutaneous approach.
0WPD40Z..................  Removal of drainage device from pericardial
                            cavity, percutaneous endoscopic approach.
0WPD41Z..................  Removal of radioactive element from
                            pericardial cavity, percutaneous endoscopic
                            approach.
0WPD43Z..................  Removal of infusion device from pericardial
                            cavity, percutaneous endoscopic approach.
0WPD4YZ..................  Removal of other device from pericardial
                            cavity, percutaneous endoscopic approach.
0WWD00Z..................  Revision of drainage device in pericardial
                            cavity, open approach.
0WWD01Z..................  Revision of radioactive element in
                            pericardial cavity, open approach.
0WWD03Z..................  Revision of infusion device in pericardial
                            cavity, open approach.
0WWD0YZ..................  Revision of other device in pericardial
                            cavity, open approach.
0WWD30Z..................  Revision of drainage device in pericardial
                            cavity, percutaneous approach.
0WWD31Z..................  Revision of radioactive element in
                            pericardial cavity, percutaneous approach.
0WWD33Z..................  Revision of infusion device in pericardial
                            cavity, percutaneous approach.
0WWD3YZ..................  Revision of other device in pericardial
                            cavity, percutaneous approach.
0WWD40Z..................  Revision of drainage device in pericardial
                            cavity, percutaneous endoscopic approach.
0WWD41Z..................  Revision of radioactive element in
                            pericardial cavity, percutaneous endoscopic
                            approach.
0WWD43Z..................  Revision of infusion device in pericardial
                            cavity, percutaneous endoscopic approach.
0WWD4YZ..................  Revision of other device in pericardial
                            cavity, percutaneous endoscopic approach.
------------------------------------------------------------------------


[[Page 49378]]


     ICD-10-PCS Code Translations for ICD-9-CM Procedure Code 37.24
------------------------------------------------------------------------
     ICD-10-PCS Code                      Code description
------------------------------------------------------------------------
02BN0ZX..................  Excision of pericardium, open approach,
                            diagnostic.
02BN3ZX..................  Excision of pericardium, percutaneous
                            approach, diagnostic.
02BN4ZX..................  Excision of pericardium, percutaneous
                            endoscopic approach, diagnostic.
------------------------------------------------------------------------


     ICD-10-PCS Code Translations for ICD-9-CM Procedure Code 37.31
------------------------------------------------------------------------
     ICD-10-PCS Code                      Code description
------------------------------------------------------------------------
025N0ZZ..................  Destruction of pericardium, open approach.
025N3ZZ..................  Destruction of pericardium, percutaneous
                            approach.
025N4ZZ..................  Destruction of pericardium, percutaneous
                            endoscopic approach.
02BN0ZZ..................  Excision of pericardium, open approach.
02BN3ZZ..................  Excision of pericardium, percutaneous
                            approach.
02BN4ZZ..................  Excision of pericardium, percutaneous
                            endoscopic approach.
02TN0ZZ..................  Resection of pericardium, open approach.
02TN3ZZ..................  Resection of pericardium, percutaneous
                            approach.
02TN4ZZ..................  Resection of pericardium, percutaneous
                            endoscopic approach.
------------------------------------------------------------------------


     ICD-10-PCS Code Translations for ICD-9-CM Procedure Code 37.61
------------------------------------------------------------------------
     ICD-10-PCS Code                      Code description
------------------------------------------------------------------------
5A02110..................  Assistance with cardiac output using balloon
                            pump, intermittent.
5A02210..................  Assistance with cardiac output using balloon
                            pump, continuous.
------------------------------------------------------------------------


     ICD-10-PCS Code Translations for ICD-9-CM Procedure Code 37.67
------------------------------------------------------------------------
     ICD-10-PCS Code                      Code description
------------------------------------------------------------------------
02QA0ZZ..................  Repair heart, open approach.
02QA3ZZ..................  Repair heart, percutaneous approach.
02QA4ZZ..................  Repair heart, percutaneous endoscopic
                            approach.
------------------------------------------------------------------------


     ICD-10-PCS Code Translations for ICD-9-CM Procedure Code 37.91
------------------------------------------------------------------------
     ICD-10-PCS Code                      Code description
------------------------------------------------------------------------
02QA0ZZ..................  Repair heart, open approach.
------------------------------------------------------------------------


     ICD-10-PCS Code Translations for ICD-9-CM Procedure Code 37.99
------------------------------------------------------------------------
     ICD-10-PCS Code                      Code description
------------------------------------------------------------------------
02880ZZ..................  Division of conduction mechanism, open
                            approach.
02883ZZ..................  Division of conduction mechanism,
                            percutaneous approach.
02884ZZ..................  Division of conduction mechanism,
                            percutaneous endoscopic approach.
------------------------------------------------------------------------


     ICD-10-PCS Code Translations for ICD-9-CM Procedure Code 38.05
------------------------------------------------------------------------
 
-------------------------------------------------------------------------
The comparable ICD-10-PCS code translations for ICD-9-CM procedure code
 38.05 are shown in Table 6P.1b for this final rule, which is available
 via the Internet on the CMS Web site at: http://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/AcuteInpatientPPS/index.html.
------------------------------------------------------------------------


     ICD-10-PCS Code Translations for ICD-9-CM Procedure Code 38.06
------------------------------------------------------------------------
     ICD-10-PCS Code                      Code description
------------------------------------------------------------------------
04C10ZZ..................  Extirpation of matter from celiac artery,
                            open approach.
04C13ZZ..................  Extirpation of matter from celiac artery,
                            percutaneous approach.

[[Page 49379]]

 
04C14ZZ..................  Extirpation of matter from celiac artery,
                            percutaneous endoscopic approach.
04C20ZZ..................  Extirpation of matter from gastric artery,
                            open approach.
04C23ZZ..................  Extirpation of matter from gastric artery,
                            percutaneous approach.
04C24ZZ..................  Extirpation of matter from gastric artery,
                            percutaneous endoscopic approach.
04C30ZZ..................  Extirpation of matter from hepatic artery,
                            open approach.
04C33ZZ..................  Extirpation of matter from hepatic artery,
                            percutaneous approach.
04C34ZZ..................  Extirpation of matter from hepatic artery,
                            percutaneous endoscopic approach.
04C40ZZ..................  Extirpation of matter from splenic artery,
                            open approach.
04C43ZZ..................  Extirpation of matter from splenic artery,
                            percutaneous approach.
04C44ZZ..................  Extirpation of matter from splenic artery,
                            percutaneous endoscopic approach.
04C50ZZ..................  Extirpation of matter from superior
                            mesenteric artery, open approach.
04C53ZZ..................  Extirpation of matter from superior
                            mesenteric artery, percutaneous approach.
04C54ZZ..................  Extirpation of matter from superior
                            mesenteric artery, percutaneous endoscopic
                            approach.
04C60ZZ..................  Extirpation of matter from right colic
                            artery, open approach.
04C63ZZ..................  Extirpation of matter from right colic
                            artery, percutaneous approach.
04C64ZZ..................  Extirpation of matter from right colic
                            artery, percutaneous endoscopic approach.
04C70ZZ..................  Extirpation of matter from left colic artery,
                            open approach.
04C73ZZ..................  Extirpation of matter from left colic artery,
                            percutaneous approach.
04C74ZZ..................  Extirpation of matter from left colic artery,
                            percutaneous endoscopic approach.
04C80ZZ..................  Extirpation of matter from middle colic
                            artery, open approach.
04C83ZZ..................  Extirpation of matter from middle colic
                            artery, percutaneous approach.
04C84ZZ..................  Extirpation of matter from middle colic
                            artery, percutaneous endoscopic approach.
04C90ZZ..................  Extirpation of matter from right renal
                            artery, open approach.
04C93ZZ..................  Extirpation of matter from right renal
                            artery, percutaneous approach.
04C94ZZ..................  Extirpation of matter from right renal
                            artery, percutaneous endoscopic approach.
04CA0ZZ..................  Extirpation of matter from left renal artery,
                            open approach.
04CA3ZZ..................  Extirpation of matter from left renal artery,
                            percutaneous approach.
04CA4ZZ..................  Extirpation of matter from left renal artery,
                            percutaneous endoscopic approach.
04CB0ZZ..................  Extirpation of matter from inferior
                            mesenteric artery, open approach.
04CB3ZZ..................  Extirpation of matter from inferior
                            mesenteric artery, percutaneous approach.
04CB4ZZ..................  Extirpation of matter from inferior
                            mesenteric artery, percutaneous endoscopic
                            approach.
04CC0ZZ..................  Extirpation of matter from right common iliac
                            artery, open approach.
04CC3ZZ..................  Extirpation of matter from right common iliac
                            artery, percutaneous approach.
04CC4ZZ..................  Extirpation of matter from right common iliac
                            artery, percutaneous endoscopic approach.
04CD0ZZ..................  Extirpation of matter from left common iliac
                            artery, open approach.
04CD3ZZ..................  Extirpation of matter from left common iliac
                            artery, percutaneous approach.
04CD4ZZ..................  Extirpation of matter from left common iliac
                            artery, percutaneous endoscopic approach.
04CE0ZZ..................  Extirpation of matter from right internal
                            iliac artery, open approach.
04CE3ZZ..................  Extirpation of matter from right internal
                            iliac artery, percutaneous approach.
04CE4ZZ..................  Extirpation of matter from right internal
                            iliac artery, percutaneous endoscopic
                            approach.
04CF0ZZ..................  Extirpation of matter from left internal
                            iliac artery, open approach.
04CF3ZZ..................  Extirpation of matter from left internal
                            iliac artery, percutaneous approach.
04CF4ZZ..................  Extirpation of matter from left internal
                            iliac artery, percutaneous endoscopic
                            approach.
04CH0ZZ..................  Extirpation of matter from right external
                            iliac artery, open approach.
04CH3ZZ..................  Extirpation of matter from right external
                            iliac artery, percutaneous approach.
04CH4ZZ..................  Extirpation of matter from right external
                            iliac artery, percutaneous endoscopic
                            approach.
04CJ0ZZ..................  Extirpation of matter from left external
                            iliac artery, open approach.
04CJ3ZZ..................  Extirpation of matter from left external
                            iliac artery, percutaneous approach.
04CJ4ZZ..................  Extirpation of matter from left external
                            iliac artery, percutaneous endoscopic
                            approach.
------------------------------------------------------------------------


     ICD-10-PCS Code Translations for ICD-9-CM Procedure Code 38.07
------------------------------------------------------------------------
     ICD-10-PCS Code                      Code description
------------------------------------------------------------------------
06C00ZZ..................  Extirpation of matter from inferior vena
                            cava, open approach.
06C03ZZ..................  Extirpation of matter from inferior vena
                            cava, percutaneous approach.
06C04ZZ..................  Extirpation of matter from inferior vena
                            cava, percutaneous endoscopic approach.
06C10ZZ..................  Extirpation of matter from splenic vein, open
                            approach.
06C13ZZ..................  Extirpation of matter from splenic vein,
                            percutaneous approach.
06C14ZZ..................  Extirpation of matter from splenic vein,
                            percutaneous endoscopic approach.
06C20ZZ..................  Extirpation of matter from gastric vein, open
                            approach.
06C23ZZ..................  Extirpation of matter from gastric vein,
                            percutaneous approach.
06C24ZZ..................  Extirpation of matter from gastric vein,
                            percutaneous endoscopic approach.
06C40ZZ..................  Extirpation of matter from hepatic vein, open
                            approach.
06C43ZZ..................  Extirpation of matter from hepatic vein,
                            percutaneous approach.
06C44ZZ..................  Extirpation of matter from hepatic vein,
                            percutaneous endoscopic approach.
06C50ZZ..................  Extirpation of matter from superior
                            mesenteric vein, open approach.
06C53ZZ..................  Extirpation of matter from superior
                            mesenteric vein, percutaneous approach.
06C54ZZ..................  Extirpation of matter from superior
                            mesenteric vein, percutaneous endoscopic
                            approach.

[[Page 49380]]

 
06C60ZZ..................  Extirpation of matter from inferior
                            mesenteric vein, open approach.
06C63ZZ..................  Extirpation of matter from inferior
                            mesenteric vein, percutaneous approach.
06C64ZZ..................  Extirpation of matter from inferior
                            mesenteric vein, percutaneous endoscopic
                            approach.
06C70ZZ..................  Extirpation of matter from colic vein, open
                            approach.
06C73ZZ..................  Extirpation of matter from colic vein,
                            percutaneous approach.
06C74ZZ..................  Extirpation of matter from colic vein,
                            percutaneous endoscopic approach.
06C80ZZ..................  Extirpation of matter from portal vein, open
                            approach.
06C83ZZ..................  Extirpation of matter from portal vein,
                            percutaneous approach.
06C84ZZ..................  Extirpation of matter from portal vein,
                            percutaneous endoscopic approach.
06C90ZZ..................  Extirpation of matter from right renal vein,
                            open approach.
06C93ZZ..................  Extirpation of matter from right renal vein,
                            percutaneous approach.
06C94ZZ..................  Extirpation of matter from right renal vein,
                            percutaneous endoscopic approach.
06CB0ZZ..................  Extirpation of matter from left renal vein,
                            open approach.
06CB3ZZ..................  Extirpation of matter from left renal vein,
                            percutaneous approach.
06CB4ZZ..................  Extirpation of matter from left renal vein,
                            percutaneous endoscopic approach.
06CC0ZZ..................  Extirpation of matter from right common iliac
                            vein, open approach.
06CC3ZZ..................  Extirpation of matter from right common iliac
                            vein, percutaneous approach.
06CC4ZZ..................  Extirpation of matter from right common iliac
                            vein, percutaneous endoscopic approach.
06CD0ZZ..................  Extirpation of matter from left common iliac
                            vein, open approach.
06CD3ZZ..................  Extirpation of matter from left common iliac
                            vein, percutaneous approach.
06CD4ZZ..................  Extirpation of matter from left common iliac
                            vein, percutaneous endoscopic approach.
06CF0ZZ..................  Extirpation of matter from right external
                            iliac vein, open approach.
06CF3ZZ..................  Extirpation of matter from right external
                            iliac vein, percutaneous approach.
06CF4ZZ..................  Extirpation of matter from right external
                            iliac vein, percutaneous endoscopic
                            approach.
06CG0ZZ..................  Extirpation of matter from left external
                            iliac vein, open approach.
06CG3ZZ..................  Extirpation of matter from left external
                            iliac vein, percutaneous approach.
06CG4ZZ..................  Extirpation of matter from left external
                            iliac vein, percutaneous endoscopic
                            approach.
06CH0ZZ..................  Extirpation of matter from right hypogastric
                            vein, open approach.
06CH3ZZ..................  Extirpation of matter from right hypogastric
                            vein, percutaneous approach.
06CH4ZZ..................  Extirpation of matter from right hypogastric
                            vein, percutaneous endoscopic approach.
06CJ0ZZ..................  Extirpation of matter from left hypogastric
                            vein, open approach.
06CJ3ZZ..................  Extirpation of matter from left hypogastric
                            vein, percutaneous approach.
06CJ4ZZ..................  Extirpation of matter from left hypogastric
                            vein, percutaneous endoscopic approach.
------------------------------------------------------------------------


     ICD-10-PCS Code Translations for ICD-9-CM Procedure Code 38.15
------------------------------------------------------------------------
     ICD-10-PCS Code                      Code description
------------------------------------------------------------------------
02CP0ZZ..................  Extirpation of matter from pulmonary trunk,
                            open approach.
02CP3ZZ..................  Extirpation of matter from pulmonary trunk,
                            percutaneous approach.
02CP4ZZ..................  Extirpation of matter from pulmonary trunk,
                            percutaneous endoscopic approach.
02CQ0ZZ..................  Extirpation of matter from right pulmonary
                            artery, open approach.
02CQ3ZZ..................  Extirpation of matter from right pulmonary
                            artery, percutaneous approach.
02CQ4ZZ..................  Extirpation of matter from right pulmonary
                            artery, percutaneous endoscopic approach.
02CR0ZZ..................  Extirpation of matter from left pulmonary
                            artery, open approach.
02CR3ZZ..................  Extirpation of matter from left pulmonary
                            artery, percutaneous approach.
02CR4ZZ..................  Extirpation of matter from left pulmonary
                            artery, percutaneous endoscopic approach.
02CS0ZZ..................  Extirpation of matter from right pulmonary
                            vein, open approach.
02CS3ZZ..................  Extirpation of matter from right pulmonary
                            vein, percutaneous approach.
02CS4ZZ..................  Extirpation of matter from right pulmonary
                            vein, percutaneous endoscopic approach.
02CT0ZZ..................  Extirpation of matter from left pulmonary
                            vein, open approach.
02CT3ZZ..................  Extirpation of matter from left pulmonary
                            vein, percutaneous approach.
02CT4ZZ..................  Extirpation of matter from left pulmonary
                            vein, percutaneous endoscopic approach.
02CV0ZZ..................  Extirpation of matter from superior vena
                            cava, open approach.
02CV3ZZ..................  Extirpation of matter from superior vena
                            cava, percutaneous approach.
02CV4ZZ..................  Extirpation of matter from superior vena
                            cava, percutaneous endoscopic approach.
03C00ZZ..................  Extirpation of matter from right internal
                            mammary artery, open approach.
03C03ZZ..................  Extirpation of matter from right internal
                            mammary artery, percutaneous approach.
03C04ZZ..................  Extirpation of matter from right internal
                            mammary artery, percutaneous endoscopic
                            approach.
03C10ZZ..................  Extirpation of matter from left internal
                            mammary artery, open approach.
03C13ZZ..................  Extirpation of matter from left internal
                            mammary artery, percutaneous approach.
03C14ZZ..................  Extirpation of matter from left internal
                            mammary artery, percutaneous endoscopic
                            approach.
03C20ZZ..................  Extirpation of matter from innominate artery,
                            open approach.
03C23ZZ..................  Extirpation of matter from innominate artery,
                            percutaneous approach.
03C24ZZ..................  Extirpation of matter from innominate artery,
                            percutaneous endoscopic approach.
03C30ZZ..................  Extirpation of matter from right subclavian
                            artery, open approach.
03C33ZZ..................  Extirpation of matter from right subclavian
                            artery, percutaneous approach.
03C34ZZ..................  Extirpation of matter from right subclavian
                            artery, percutaneous endoscopic approach.
03C40ZZ..................  Extirpation of matter from left subclavian
                            artery, open approach.

[[Page 49381]]

 
03C43ZZ..................  Extirpation of matter from left subclavian
                            artery, percutaneous approach.
03C44ZZ..................  Extirpation of matter from left subclavian
                            artery, percutaneous endoscopic approach.
------------------------------------------------------------------------


     ICD-10-PCS Code Translations for ICD-9-CM Procedure Code 38.16
------------------------------------------------------------------------
 
-------------------------------------------------------------------------
The comparable ICD-10-PCS code translations for ICD-9-CM procedure code
 38.16 are shown in Table 6P.1c for this final rule, which is available
 via the Internet on the CMS Web site at: http://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/AcuteInpatientPPS/index.html.
------------------------------------------------------------------------


     ICD-10-PCS Code Translations for ICD-9-CM Procedure Code 38.35
------------------------------------------------------------------------
     ICD-10-PCS Code                      Code description
------------------------------------------------------------------------
02BP0ZZ..................  Excision of pulmonary trunk, open approach.
02BP4ZZ..................  Excision of pulmonary trunk, percutaneous
                            endoscopic approach.
02BQ0ZZ..................  Excision of right pulmonary artery, open
                            approach.
02BQ4ZZ..................  Excision of right pulmonary artery,
                            percutaneous endoscopic approach.
02BR0ZZ..................  Excision of left pulmonary artery, open
                            approach.
02BR4ZZ..................  Excision of left pulmonary artery,
                            percutaneous endoscopic approach.
02BS0ZZ..................  Excision of right pulmonary vein, open
                            approach.
02BS4ZZ..................  Excision of right pulmonary vein,
                            percutaneous endoscopic approach.
02BT0ZZ..................  Excision of left pulmonary vein, open
                            approach.
02BT4ZZ..................  Excision of left pulmonary vein, percutaneous
                            endoscopic approach.
02BV0ZZ..................  Excision of superior vena cava, open
                            approach.
02BV4ZZ..................  Excision of superior vena cava, percutaneous
                            endoscopic approach.
03B00ZZ..................  Excision of right internal mammary artery,
                            open approach.
03B04ZZ..................  Excision of right internal mammary artery,
                            percutaneous endoscopic approach.
03B10ZZ..................  Excision of left internal mammary artery,
                            open approach.
03B14ZZ..................  Excision of left internal mammary artery,
                            percutaneous endoscopic approach.
03B20ZZ..................  Excision of innominate artery, open approach.
03B24ZZ..................  Excision of innominate artery, percutaneous
                            endoscopic approach.
03B30ZZ..................  Excision of right subclavian artery, open
                            approach.
03B34ZZ..................  Excision of right subclavian artery,
                            percutaneous endoscopic approach.
03B40ZZ..................  Excision of left subclavian artery, open
                            approach.
03B44ZZ..................  Excision of left subclavian artery,
                            percutaneous endoscopic approach.
05B00ZZ..................  Excision of azygos vein, open approach.
05B04ZZ..................  Excision of azygos vein, percutaneous
                            endoscopic approach.
05B10ZZ..................  Excision of hemiazygos vein, open approach.
05B14ZZ..................  Excision of hemiazygos vein, percutaneous
                            endoscopic approach.
05B30ZZ..................  Excision of right innominate vein, open
                            approach.
05B34ZZ..................  Excision of right innominate vein,
                            percutaneous endoscopic approach.
05B40ZZ..................  Excision of left innominate vein, open
                            approach.
05B44ZZ..................  Excision of left innominate vein,
                            percutaneous endoscopic approach.
05B50ZZ..................  Excision of right subclavian vein, open
                            approach.
05B54ZZ..................  Excision of right subclavian vein,
                            percutaneous endoscopic approach.
05B60ZZ..................  Excision of left subclavian vein, open
                            approach.
05B64ZZ..................  Excision of left subclavian vein,
                            percutaneous endoscopic approach.
------------------------------------------------------------------------


     ICD-10-PCS Code Translations for ICD-9-CM Procedure Code 38.36
------------------------------------------------------------------------
     ICD-10-PCS Code                      Code description
------------------------------------------------------------------------
04B10ZZ..................  Excision of celiac artery, open approach.
04B14ZZ..................  Excision of celiac artery, percutaneous
                            endoscopic approach.
04B20ZZ..................  Excision of gastric artery, open approach.
04B24ZZ..................  Excision of gastric artery, percutaneous
                            endoscopic approach.
04B30ZZ..................  Excision of hepatic artery, open approach.
04B34ZZ..................  Excision of hepatic artery, percutaneous
                            endoscopic approach.
04B40ZZ..................  Excision of splenic artery, open approach.
04B44ZZ..................  Excision of splenic artery, percutaneous
                            endoscopic approach.
04B50ZZ..................  Excision of superior mesenteric artery, open
                            approach.
04B54ZZ..................  Excision of superior mesenteric artery,
                            percutaneous endoscopic approach.
04B60ZZ..................  Excision of right colic artery, open
                            approach.
04B64ZZ..................  Excision of right colic artery, percutaneous
                            endoscopic approach.
04B70ZZ..................  Excision of left colic artery, open approach.
04B74ZZ..................  Excision of left colic artery, percutaneous
                            endoscopic approach.

[[Page 49382]]

 
04B80ZZ..................  Excision of middle colic artery, open
                            approach.
04B84ZZ..................  Excision of middle colic artery, percutaneous
                            endoscopic approach.
04B90ZZ..................  Excision of right renal artery, open
                            approach.
04B94ZZ..................  Excision of right renal artery, percutaneous
                            endoscopic approach.
04BA0ZZ..................  Excision of left renal artery, open approach.
04BA4ZZ..................  Excision of left renal artery, percutaneous
                            endoscopic approach.
04BB0ZZ..................  Excision of inferior mesenteric artery, open
                            approach.
04BB4ZZ..................  Excision of inferior mesenteric artery,
                            percutaneous endoscopic approach.
04BC0ZZ..................  Excision of right common iliac artery, open
                            approach.
04BC4ZZ..................  Excision of right common iliac artery,
                            percutaneous endoscopic approach.
04BD0ZZ..................  Excision of left common iliac artery, open
                            approach.
04BD4ZZ..................  Excision of left common iliac artery,
                            percutaneous endoscopic approach.
04BE0ZZ..................  Excision of right internal iliac artery, open
                            approach.
04BE4ZZ..................  Excision of right internal iliac artery,
                            percutaneous endoscopic approach.
04BF0ZZ..................  Excision of left internal iliac artery, open
                            approach.
04BF4ZZ..................  Excision of left internal iliac artery,
                            percutaneous endoscopic approach.
04BH0ZZ..................  Excision of right external iliac artery, open
                            approach.
04BH4ZZ..................  Excision of right external iliac artery,
                            percutaneous endoscopic approach.
04BJ0ZZ..................  Excision of left external iliac artery, open
                            approach.
04BJ4ZZ..................  Excision of left external iliac artery,
                            percutaneous endoscopic approach.
------------------------------------------------------------------------


     ICD-10-PCS Code Translations for ICD-9-CM Procedure Code 38.37
------------------------------------------------------------------------
     ICD-10-PCS Code                      Code description
------------------------------------------------------------------------
06B00ZZ..................  Excision of inferior vena cava, open
                            approach.
06B04ZZ..................  Excision of inferior vena cava, percutaneous
                            endoscopic approach.
06B10ZZ..................  Excision of splenic vein, open approach.
06B14ZZ..................  Excision of splenic vein, percutaneous
                            endoscopic approach.
06B20ZZ..................  Excision of gastric vein, open approach.
06B24ZZ..................  Excision of gastric vein, percutaneous
                            endoscopic approach.
06B40ZZ..................  Excision of hepatic vein, open approach.
06B44ZZ..................  Excision of hepatic vein, percutaneous
                            endoscopic approach.
06B50ZZ..................  Excision of superior mesenteric vein, open
                            approach.
06B54ZZ..................  Excision of superior mesenteric vein,
                            percutaneous endoscopic approach.
06B60ZZ..................  Excision of inferior mesenteric vein, open
                            approach.
06B64ZZ..................  Excision of inferior mesenteric vein,
                            percutaneous endoscopic approach.
06B70ZZ..................  Excision of colic vein, open approach.
06B74ZZ..................  Excision of colic vein, percutaneous
                            endoscopic approach.
06B80ZZ..................  Excision of portal vein, open approach.
06B84ZZ..................  Excision of portal vein, percutaneous
                            endoscopic approach.
06B90ZZ..................  Excision of right renal vein, open approach.
06B94ZZ..................  Excision of right renal vein, percutaneous
                            endoscopic approach.
06BB0ZZ..................  Excision of left renal vein, open approach.
06BB4ZZ..................  Excision of left renal vein, percutaneous
                            endoscopic approach.
06BC0ZZ..................  Excision of right common iliac vein, open
                            approach.
06BC4ZZ..................  Excision of right common iliac vein,
                            percutaneous endoscopic approach.
06BD0ZZ..................  Excision of left common iliac vein, open
                            approach.
06BD4ZZ..................  Excision of left common iliac vein,
                            percutaneous endoscopic approach.
06BF0ZZ..................  Excision of right external iliac vein, open
                            approach.
06BF4ZZ..................  Excision of right external iliac vein,
                            percutaneous endoscopic approach.
06BG0ZZ..................  Excision of left external iliac vein, open
                            approach.
06BG4ZZ..................  Excision of left external iliac vein,
                            percutaneous endoscopic approach.
06BH0ZZ..................  Excision of right hypogastric vein, open
                            approach.
06BH4ZZ..................  Excision of right hypogastric vein,
                            percutaneous endoscopic approach.
06BJ0ZZ..................  Excision of left hypogastric vein, open
                            approach.
06BJ4ZZ..................  Excision of left hypogastric vein,
                            percutaneous endoscopic approach.
------------------------------------------------------------------------


     ICD-10-PCS Code Translations for ICD-9-CM Procedure Code 38.46
------------------------------------------------------------------------
     ICD-10-PCS Code                      Code description
------------------------------------------------------------------------
The comparable ICD-10-PCS code translations for ICD-9-CM procedure code
 38.46 are shown in Table 6P.1d for this final rule, which is available
 via the Internet on the CMS Web site at: http://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/AcuteInpatientPPS/index.html..
------------------------------------------------------------------------


[[Page 49383]]


     ICD-10-PCS Code Translations for ICD-9-CM Procedure Code 38.47
------------------------------------------------------------------------
 
-------------------------------------------------------------------------
The comparable ICD-10-PCS code translations for ICD-9-CM procedure code
 38.47 are shown in Table 6P.1e for this final rule, which is available
 via the Internet on the CMS Web site at: http://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/AcuteInpatientPPS/index.html.
------------------------------------------------------------------------

    There is not an equivalent ICD-10-PCS code translation for ICD-9-CM 
procedure code 38.55.

     ICD-10-PCS Code Translations for ICD-9-CM Procedure Code 38.65
------------------------------------------------------------------------
     ICD-10-PCS Code                      Code description
------------------------------------------------------------------------
The comparable ICD-10-PCS code translations for ICD-9-CM procedure code
 38.65 are shown in Table 6P.1f for this final rule, which is available
 via the Internet on the CMS Web site at: http://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/AcuteInpatientPPS/index.html..
------------------------------------------------------------------------


     ICD-10-PCS Code Translations for ICD-9-CM Procedure Code 38.66
------------------------------------------------------------------------
     ICD-10-PCS Code                      Code description
------------------------------------------------------------------------
The comparable ICD-10-PCS code translations for ICD-9-CM procedure code
 38.66 are shown in Table 6P.1g for this final rule, which is available
 via the Internet on the CMS Web site at: http://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/AcuteInpatientPPS/index.html..
------------------------------------------------------------------------


     ICD-10-PCS Code Translations for ICD-9-CM Procedure Code 38.67
------------------------------------------------------------------------
     ICD-10-PCS Code                      Code description
------------------------------------------------------------------------
The comparable ICD-10-PCS code translations for ICD-9-CM procedure code
 38.67 are shown in Table 6P.1h for this final rule, which is available
 via the Internet on the CMS Web site at: http://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/AcuteInpatientPPS/index.html..
------------------------------------------------------------------------


     ICD-10-PCS Code Translations for ICD-9-CM Procedure Code 38.85
------------------------------------------------------------------------
     ICD-10-PCS Code                      Code description
------------------------------------------------------------------------
The comparable ICD-10-PCS code translations for ICD-9-CM procedure code
 38.85 are shown in Table 6P.1i for this final rule, which is available
 via the Internet on the CMS Web site at: http://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/AcuteInpatientPPS/index.html..
------------------------------------------------------------------------


     ICD-10-PCS Code Translations for ICD-9-CM Procedure Code 38.86
------------------------------------------------------------------------
     ICD-10-PCS Code                      Code description
------------------------------------------------------------------------
The comparable ICD-10-PCS code translations for ICD-9-CM procedure code
 38.86 are shown in Table 6P.1j for this final rule, which is available
 via the Internet on the CMS Web site at: http://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/AcuteInpatientPPS/index.html..
------------------------------------------------------------------------


     ICD-10-PCS Code Translations for ICD-9-CM Procedure Code 38.87
------------------------------------------------------------------------
     ICD-10-PCS Code                      Code description
------------------------------------------------------------------------
The comparable ICD-10-PCS code translations for ICD-9-CM procedure code
 38.87 are shown in Table 6P.1k for this final rule, which is available
 via the Internet on the CMS Web site at: http://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/AcuteInpatientPPS/index.html..
------------------------------------------------------------------------


[[Page 49384]]


      ICD-10-PCS Code Translations for ICD-9-CM Procedure Code 39.0
------------------------------------------------------------------------
     ICD-10-PCS Code                      Code description
------------------------------------------------------------------------
The comparable ICD-10-PCS code translations for ICD-9-CM procedure code
 39.0 are shown in Table 6P.1l for this final rule, which is available
 via the Internet on the CMS Web site at: http://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/AcuteInpatientPPS/index.html..
------------------------------------------------------------------------


      ICD-10-PCS Code Translations for ICD-9-CM Procedure Code 39.1
------------------------------------------------------------------------
     ICD-10-PCS Code                      Code description
------------------------------------------------------------------------
The comparable ICD-10-PCS code translations for ICD-9-CM procedure code
 39.1 are shown in Table 6P.1m for this final rule, which is available
 via the Internet on the CMS Web site at: http://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/AcuteInpatientPPS/index.html..
------------------------------------------------------------------------


     ICD-10-PCS Code Translations for ICD-9-CM Procedure Code 39.21
------------------------------------------------------------------------
     ICD-10-PCS Code                      Code description
------------------------------------------------------------------------
021V09P..................  Bypass superior vena cava to pulmonary trunk
                            with autologous venous tissue, open
                            approach.
021V09Q..................  Bypass superior vena cava to right pulmonary
                            artery with autologous venous tissue, open
                            approach.
021V09R..................  Bypass superior vena cava to left pulmonary
                            artery with autologous venous tissue, open
                            approach.
021V0AP..................  Bypass superior vena cava to pulmonary trunk
                            with autologous arterial tissue, open
                            approach.
021V0AQ..................  Bypass superior vena cava to right pulmonary
                            artery with autologous arterial tissue, open
                            approach.
021V0AR..................  Bypass superior vena cava to left pulmonary
                            artery with autologous arterial tissue, open
                            approach.
021V0JP..................  Bypass superior vena cava to pulmonary trunk
                            with synthetic substitute, open approach.
021V0JQ..................  Bypass superior vena cava to right pulmonary
                            artery with synthetic substitute, open
                            approach.
021V0JR..................  Bypass superior vena cava to left pulmonary
                            artery with synthetic substitute, open
                            approach.
021V0KP..................  Bypass superior vena cava to pulmonary trunk
                            with nonautologous tissue substitute, open
                            approach.
021V0KQ..................  Bypass superior vena cava to right pulmonary
                            artery with nonautologous tissue substitute,
                            open approach.
021V0KR..................  Bypass superior vena cava to left pulmonary
                            artery with nonautologous tissue substitute,
                            open approach.
021V0ZP..................  Bypass superior vena cava to pulmonary trunk,
                            open approach.
021V0ZQ..................  Bypass superior vena cava to right pulmonary
                            artery, open approach.
021V0ZR..................  Bypass superior vena cava to left pulmonary
                            artery, open approach.
021V49P..................  Bypass superior vena cava to pulmonary trunk
                            with autologous venous tissue, percutaneous
                            endoscopic approach.
021V49Q..................  Bypass superior vena cava to right pulmonary
                            artery with autologous venous tissue,
                            percutaneous endoscopic approach.
021V49R..................  Bypass superior vena cava to left pulmonary
                            artery with autologous venous tissue,
                            percutaneous endoscopic approach.
021V4AP..................  Bypass superior vena cava to pulmonary trunk
                            with autologous arterial tissue,
                            percutaneous endoscopic approach.
021V4AQ..................  Bypass superior vena cava to right pulmonary
                            artery with autologous arterial tissue,
                            percutaneous endoscopic approach.
021V4AR..................  Bypass superior vena cava to left pulmonary
                            artery with autologous arterial tissue,
                            percutaneous endoscopic approach.
021V4JP..................  Bypass superior vena cava to pulmonary trunk
                            with synthetic substitute, percutaneous
                            endoscopic approach.
021V4JQ..................  Bypass superior vena cava to right pulmonary
                            artery with synthetic substitute,
                            percutaneous endoscopic approach.
021V4JR..................  Bypass superior vena cava to left pulmonary
                            artery with synthetic substitute,
                            percutaneous endoscopic approach.
021V4KP..................  Bypass superior vena cava to pulmonary trunk
                            with nonautologous tissue substitute,
                            percutaneous endoscopic approach.
021V4KQ..................  Bypass superior vena cava to right pulmonary
                            artery with nonautologous tissue substitute,
                            percutaneous endoscopic approach.
021V4KR..................  Bypass superior vena cava to left pulmonary
                            artery with nonautologous tissue substitute,
                            percutaneous endoscopic approach.
021V4ZP..................  Bypass superior vena cava to pulmonary trunk,
                            percutaneous endoscopic approach.
021V4ZQ..................  Bypass superior vena cava to right pulmonary
                            artery, percutaneous endoscopic approach.
021V4ZR..................  Bypass superior vena cava to left pulmonary
                            artery, percutaneous endoscopic approach.
------------------------------------------------------------------------


     ICD-10-PCS Code Translations for ICD-9-CM Procedure Code 39.22
------------------------------------------------------------------------
     ICD-10-PCS Code                      Code description
------------------------------------------------------------------------
021W09B..................  Bypass thoracic aorta to subclavian with
                            autologous venous tissue, open approach).
021W09D..................  Bypass thoracic aorta to carotid with
                            autologous venous tissue, open approach).
021W0AB..................  Bypass thoracic aorta to subclavian with
                            autologous arterial tissue, open approach.
021W0AD..................  Bypass thoracic aorta to carotid with
                            autologous arterial tissue, open approach.
021W0JB..................  Bypass thoracic aorta to subclavian with
                            synthetic substitute, open approach.
021W0JD..................  Bypass thoracic aorta to carotid with
                            synthetic substitute, open approach.
021W0KB..................  Bypass thoracic aorta to subclavian with
                            nonautologous tissue substitute, open
                            approach.
021W0KD..................  Bypass thoracic aorta to carotid with
                            nonautologous tissue substitute, open
                            approach.
021W0ZB..................  Bypass thoracic aorta to subclavian, open
                            approach.
021W0ZD..................  Bypass thoracic aorta to carotid, open
                            approach.
021W49B..................  Bypass thoracic aorta to subclavian with
                            autologous venous tissue, percutaneous
                            endoscopic approach.
021W49D..................  Bypass thoracic aorta to carotid with
                            autologous venous tissue, percutaneous
                            endoscopic approach.
021W4AB..................  Bypass thoracic aorta to subclavian with
                            autologous arterial tissue, percutaneous
                            endoscopic approach.
021W4AD..................  Bypass thoracic aorta to carotid with
                            autologous arterial tissue, percutaneous
                            endoscopic approach.

[[Page 49385]]

 
021W4JB..................  Bypass thoracic aorta to subclavian with
                            synthetic substitute, percutaneous
                            endoscopic approach.
021W4JD..................  Bypass thoracic aorta to carotid with
                            synthetic substitute, percutaneous
                            endoscopic approach.
021W4KB..................  Bypass thoracic aorta to subclavian with
                            nonautologous tissue substitute,
                            percutaneous endoscopic approach.
021W4KD..................  Bypass thoracic aorta to carotid with
                            nonautologous tissue substitute,
                            percutaneous endoscopic approach.
021W4ZB..................  Bypass thoracic aorta to subclavian,
                            percutaneous endoscopic approach.
021W4ZD..................  Bypass thoracic aorta to carotid,
                            percutaneous endoscopic approach.
------------------------------------------------------------------------


     ICD-10-PCS Code Translations for ICD-9-CM Procedure Code 39.23
------------------------------------------------------------------------
     ICD-10-PCS Code                      Code description
------------------------------------------------------------------------
The comparable ICD-10-PCS code translations for ICD-9-CM procedure code
 39.23 are shown in Table 6P.1n for this final rule, which is available
 via the Internet on the CMS Web site at: http://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/AcuteInpatientPPS/index.html..
------------------------------------------------------------------------


     ICD-10-PCS Code Translations for ICD-9-CM Procedure Code 39.25
------------------------------------------------------------------------
     ICD-10-PCS Code                      Code description
------------------------------------------------------------------------
The comparable ICD-10-PCS code translations for ICD-9-CM procedure code
 39.25 are shown in Table 6P.1o for this final rule, which is available
 via the Internet on the CMS Web site at: http://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/AcuteInpatientPPS/index.html..
------------------------------------------------------------------------


     ICD-10-PCS Code Translations for ICD-9-CM Procedure Code 39.26
------------------------------------------------------------------------
     ICD-10-PCS Code                      Code description
------------------------------------------------------------------------
The comparable ICD-10-PCS code translations for ICD-9-CM procedure code
 39.26 are shown in Table 6P.1p for this final rule, which is available
 via the Internet on the CMS Web site at: http://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/AcuteInpatientPPS/index.html..
------------------------------------------------------------------------


     ICD-10-PCS Code Translations for ICD-9-CM Procedure Code 39.52
------------------------------------------------------------------------
     ICD-10-PCS Code                      Code description
------------------------------------------------------------------------
The comparable ICD-10-PCS code translations for ICD-9-CM procedure code
 39.52 are shown in Table 6P.1q for this final rule, which is available
 via the Internet on the CMS Web site at: http://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/AcuteInpatientPPS/index.html..
------------------------------------------------------------------------


     ICD-10-PCS Code Translations for ICD-9-CM Procedure Code 39.54
------------------------------------------------------------------------
     ICD-10-PCS Code                      Code description
------------------------------------------------------------------------
02QW0ZZ..................  Repair thoracic aorta, open approach.
02QW3ZZ..................  Repair thoracic aorta, percutaneous approach.
02QW4ZZ..................  Repair thoracic aorta, percutaneous
                            endoscopic approach.
------------------------------------------------------------------------


     ICD-10-PCS Code Translations for ICD-9-CM Procedure Code 39.72
------------------------------------------------------------------------
     ICD-10-PCS Code                      Code description
------------------------------------------------------------------------
03LR0DZ..................  Occlusion of face artery with intraluminal
                            device, open approach.
03LR3DZ..................  Occlusion of face artery with intraluminal
                            device, percutaneous approach.
03LR4DZ..................  Occlusion of face artery with intraluminal
                            device, percutaneous endoscopic approach.
03LS0DZ..................  Occlusion of right temporal artery with
                            intraluminal device, open approach.
03LS3DZ..................  Occlusion of right temporal artery with
                            intraluminal device, percutaneous approach.
03LS4DZ..................  Occlusion of right temporal artery with
                            intraluminal device, percutaneous endoscopic
                            approach.
03LT0DZ..................  Occlusion of left temporal artery with
                            intraluminal device, open approach.
03LT3DZ..................  Occlusion of left temporal artery with
                            intraluminal device, percutaneous approach.

[[Page 49386]]

 
03LT4DZ..................  Occlusion of left temporal artery with
                            intraluminal device, percutaneous endoscopic
                            approach.
------------------------------------------------------------------------


     ICD-10-PCS Code Translations for ICD-9-CM Procedure Code 39.75
------------------------------------------------------------------------
     ICD-10-PCS Code                      Code description
------------------------------------------------------------------------
The comparable ICD-10-PCS code translations for ICD-9-CM procedure code
 39.75 are shown in Table 6P.1r for this final rule, which is available
 via the Internet on the CMS Web site at: http://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/AcuteInpatientPPS/index.html..
------------------------------------------------------------------------


     ICD-10-PCS Code Translations for ICD-9-CM Procedure Code 39.76
------------------------------------------------------------------------
     ICD-10-PCS Code                      Code description
------------------------------------------------------------------------
The comparable ICD-10-PCS code translations for ICD-9-CM procedure code
 39.76 are shown in Table 6P.1s for this final rule, which is available
 via the Internet on the CMS Web site at: http://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/AcuteInpatientPPS/index.html..
------------------------------------------------------------------------


     ICD-10-PCS Code Translations for ICD-9-CM Procedure Code 39.79
------------------------------------------------------------------------
     ICD-10-PCS Code                      Code description
------------------------------------------------------------------------
The comparable ICD-10-PCS code translations for ICD-9-CM procedure code
 39.79 are shown in Table 6P.1t for this final rule, which is available
 via the Internet on the CMS Web site at: http://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/AcuteInpatientPPS/index.html..
------------------------------------------------------------------------

    As previously stated, we separated the more complex, more invasive 
procedures from the less complex, less invasive procedures to continue 
our evaluation of the procedures assigned to MS-DRGs 237 and 238. Our 
data analysis showed that the distribution of cases, the average length 
of stay, and average costs of the more complex, more invasive aortic 
and heart assist procedures and the less complex, less invasive other 
cardiovascular procedures would be more appropriately reflected if we 
classified these distinguishing types of procedures under newly created 
MS-DRGs, as reflected in the table below.

                              Major Cardiovascular Procedures with and without MCC
----------------------------------------------------------------------------------------------------------------
                                                                     Number of    Average length
                             MS-DRG                                    cases          of stay      Average costs
----------------------------------------------------------------------------------------------------------------
MS-DRGs 237 and 238--Combined...................................          50,567             5.8         $29,174
MS-DRGs 237 and 238--Cases with more complex, more invasive               22,278             4.0          31,729
 procedure codes (37.41; 37.49; 37.55; 37.64; 38.04; 38.14;
 38.34; 38.44; 38.64; 38.84; 39.24; 39.71, and 39.78)...........
MS-DRGs 237 and 238--Cases with less complex, less invasive               28,289             7.1          27,162
 procedure codes (35.00; 35.01; 35.02; 35.03; 35.04; 37.12;
 37.24; 37.31; 37.61; 37.67; 37.91; 37.99; 38.05; 38.06; 38.07;
 38.15; 38.16; 38.35; 38.36; 38.37; 38.46; 38.47; 38.55; 38.65;
 38.66; 38.67; 38.85; 38.86; 38.87; 39.0; 39.1; 39.21; 39.22;
 39.23; 39.25; 39.26; 39.52; 39.54; 39.72; 39.75; 39.76; and
 39.79).........................................................
----------------------------------------------------------------------------------------------------------------

    Our clinical advisors reviewed the results of the analysis and 
agreed that distinguishing the more complex, more invasive procedures 
from the less complex, less invasive procedures would result in 
improved clinical coherence for the various cardiovascular procedures 
currently assigned to MS-DRGs 237 and 238, as listed previously. 
Therefore, for FY 2016, we proposed to delete MS-DRGs 237 and 238. When 
we applied our established criteria to determine if the creation of a 
new CC or MCC subgroup within a base MS-DRG is warranted, we determined 
that a 2-way severity level split (with MCC and without MCC) was 
justified. Therefore, we proposed to create two new MS-DRGs that would 
contain the more complex, more invasive aortic and heart assist 
procedures currently assigned to MS-DRGs 237 and 238, as listed 
previously. We proposed to create MS-DRG 268, entitled ``Aortic and 
Heart Assist Procedures Except Pulsation Balloon with MCC,'' and MS-DRG 
269, entitled ``Aortic and Heart Assist Procedures Except Pulsation 
Balloon without MCC.'' The table below shows the distribution of cases 
and the average length of stay and average costs of the more complex, 
more invasive procedures for aortic and heart assistance for the 
proposed new MS-DRGs 268 and 269.

[[Page 49387]]



                           Proposed New MS-DRGs for Aortic and Heart Assist Procedures
----------------------------------------------------------------------------------------------------------------
                                                                     Number of    Average length
                             MS-DRG                                    cases          of stay      Average costs
----------------------------------------------------------------------------------------------------------------
Proposed New MS-DRG 268 with MCC................................           4,182           10.03         $45,996
Proposed New MS-DRG 269 without MCC.............................          18,096            2.68          28,431
----------------------------------------------------------------------------------------------------------------

    We invited public comments on this proposal and the ICD-10-PCS code 
translations for these procedures shown earlier in this section, which 
we also proposed to assign to proposed new MS-DRGs 268 and 269.
    In addition, when we further applied our established criteria to 
determine if the creation of a new CC or MCC subgroup for the remaining 
procedures was warranted, we determined that a 3-way severity level 
split (with MCC, with CC, and without CC/MCC) was justified. Therefore, 
we proposed to create three new MS-DRGs that would contain the 
remaining cardiovascular procedures that were designated as the less 
complex, less invasive procedures, as listed previously. For FY 2016, 
we proposed to create MS-DRG 270, entitled ``Other Major Cardiovascular 
Procedures with MCC''; MS-DRG 271, entitled ``Other Major 
Cardiovascular Procedures with CC''; and MS-DRG 272, entitled ``Other 
Major Cardiovascular Procedures without CC/MCC,'' and to assign the 
less complex, less invasive cardiovascular procedures shown earlier in 
this section to these proposed new MS-DRGs. We believed that, as shown 
in the table below, the distribution of cases and average length of 
stay and average costs of these procedures would be more appropriately 
reflected when these types of procedures are classified under these 
proposed new MS-DRGs.

                         Proposed New MS-DRGs for Other Major Cardiovascular Procedures
----------------------------------------------------------------------------------------------------------------
                                                                     Number of    Average length
                             MS-DRG                                    cases          of stay      Average costs
----------------------------------------------------------------------------------------------------------------
Proposed New MS-DRG 270 with MCC................................          14,158             9.3         $33,507
Proposed New MS-DRG 271 with CC.................................           9,648            5.99          22,800
Proposed New MS-DRG 272 without CC/MCC..........................           4,483            3.08          16,438
----------------------------------------------------------------------------------------------------------------

    We invited public comments on this proposal and the ICD-10-PCS code 
translations for the less complex, less invasive cardiovascular 
procedures shown earlier in this section, which we also proposed to 
assign to proposed new MS-DRGs 270, 271, and 272.
    In summary, for FY 2016, we proposed to delete MS-DRGs 237 and 238, 
and to create the following five new MS-DRGs:
     Proposed new MS-DRG 268 (Aortic and Heart Assist 
Procedures Except Pulsation Balloon with MCC);
     Proposed new MS-DRG 269 (Aortic and Heart Assist 
Procedures Except Pulsation Balloon without MCC);
     Proposed new MS-DRG 270 (Other Major Cardiovascular 
Procedures with MCC);
     Proposed new MS-DRG 271 (Other Major Cardiovascular 
Procedures with CC); and
     Proposed new MS-DRG 272 (Other Major Cardiovascular 
Procedures without CC/MCC).
    We also proposed to assign the more complex, more invasive 
cardiovascular procedures identified in our analysis and the ICD-10-PCS 
code translations to proposed new MS-DRGs 268 and 269. In addition, we 
proposed to assign the less complex, less invasive cardiovascular 
procedures identified in our analysis and the ICD-10-PCS code 
translations to proposed new MS-DRGs 270, 271, and 272. We encouraged 
public comments on our proposal to create these proposed new MS-DRGs, 
as well as the ICD-10-PCS code translations that we proposed to assign 
to the corresponding proposed new MS-DRGs.
    Comment: Several commenters supported the proposal to delete MS-
DRGs 237 and 238 and to create five new proposed MS-DRGs 268, 269, 270, 
271, and 272 to distinguish the more complex, more invasive procedures 
from the less complex, less invasive procedures resulting in improved 
clinical coherence for the various cardiovascular procedures currently 
assigned to MS-DRGs 237 and 238. Commenters stated that the proposal 
was reasonable, given the data and information provided.
    One commenter who supported the creation of proposed new MS-DRGs 
268 and 269 expressed additional support with regard to how these 
proposed new MS-DRGs would incorporate selected high resource surgical 
aortic and visceral vessel procedures, as well as selected high 
resource extra-cardiac procedures. The commenter agreed that, in terms 
of resource utilization and clinical coherency, the procedures included 
would be classified appropriately to the proposed new MS-DRGs. However, 
this commenter requested clarification on some of the ICD-10-PCS code 
translations that were listed for ICD-9-CM procedure code 39.78 
(Endovascular implantation of branching or fenestrated graft(s) in 
aorta). The commenter stated that, as displayed in the FY 2016 IPPS/
LTCH PPS proposed rule (80 FR 24363), the dilation of right and left 
renal arteries and the superior mesenteric artery (procedures described 
by ICD-10-PCS codes 04793DZ through 04754DZ) also appear to be proposed 
for grouping to proposed MS-DRGs 268 and 269. The commenter believed 
that CMS did not intend to classify those dilation codes as ``stand 
alone'' procedures that would be assigned to proposed new MS-DRGs 268 
and 269. The commenter stated that the ICD-10-PCS dilation codes should 
not be necessary as translations for ICD-9-CM procedure code 39.78.
    Another commenter commended CMS on the timing of the proposal to 
establish proposed new MS-DRGs 268 and 269. The commenter stated that 
this proposal will allow patients requiring fenestrated grafts 
continued access to care in FY 2016, as the new-technology add-on 
payment for the Zenith Fenestrated Graft device is expiring September 
30, 2015. The commenter also stated that, currently, there is not an 
appropriate mechanism to ensure access to these procedures, especially 
in rural hospitals, and that this proposal would change that.
    Other commenters stated that the proposed new MS-DRGs would better 
recognize clinical homogeneity and

[[Page 49388]]

resource requirements for the range of major cardiovascular procedures.
    Response: We appreciate the commenters' support of our proposal to 
delete MS-DRGs 237 and 238 and to create proposed new MS-DRGs 268 
through 272.
    In response to the comment requesting clarification on some of the 
ICD-10-PCS code translations that were listed for ICD-9-CM procedure 
code 39.78, the commenter is correct. It was not our intent to classify 
those dilation codes (ICD-10-PCS codes 04793DZ through 04754DZ) as 
``stand alone'' procedures that would be assigned to proposed new MS-
DRGs 268 and 269. Rather, we proposed those codes for consideration as 
supplemental codes to more fully describe the procedure performed. We 
agree with the commenter that these dilation codes are not necessary 
translations for ICD-9-CM procedure code 39.78 and as ``stand alone'' 
procedures they would be assigned to their own separate and clinically 
appropriate ICD-10 MS-DRG.
    As we reviewed the translations for ICD-9-CM procedure code 39.78 
in response to the commenter's request, we reviewed all the comparable 
ICD-10-PCS code translations that we proposed to assign to proposed new 
MS-DRGs 268 through 272. Specifically, we reviewed the list of the more 
complex, more invasive procedures that we proposed to assign to 
proposed MS-DRGs 268 and 269 and the list of the less complex, less 
invasive procedures that we proposed to assign to proposed MS-DRGs 270 
through 272. We determined that the ICD-10-PCS translations for ICD-9-
CM procedure code 37.49 (Other repair of heart and pericardium) as 
displayed in Table 6P.1a of the proposed rule were not complete. There 
was an inadvertent omission of an additional 78 ICD-10-PCS comparable 
code translations. Therefore, we are providing an updated Table 6P for 
this final rule, which is available via the Internet on the CMS Web 
site at: http://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/AcuteInpatientPPS/index.html. We note that this list of ICD-10-PCS code 
translations for ICD-9-CM procedure code 37.49 is consistent with the 
list of possible code translations found in the General Equivalency 
Maps (GEMs) files provided for public use available via the Internet on 
the CMS Web site at: http://www.cms.gov/Medicare/Coding/ICD10/index.html.
    In conducting this review, our clinical advisors also determined 
that ICD-9-CM procedure code 37.49 and the corresponding ICD-10-PCS 
comparable code translations would be more appropriately classified 
under proposed new MS-DRGs 270 through 272 versus proposed new MS-DRGs 
268 and 269. This decision is consistent with our proposal to assign 
less invasive procedures, such as pericardiotomies and pulsation 
balloon implants, to proposed new MS-DRGs 270 through 272. This 
procedure code captures procedures that are similar to the other 
procedures included in the proposal for MS-DRGs 270 through 272 
involving the pericardium such as ICD-9-CM procedure codes 37.12 
(Pericardiotomy), 37.24 (Biopsy of pericardium) and 37.61 
(Pericardiectomy) and does not relate to the more complex, more 
invasive aortic and heart assist procedures that we proposed to assign 
to proposed MS-DRGs 268 and 269. According to our clinical advisors, 
the ICD-10-PCS code translations for ICD-9-CM procedure code 37.49 also 
do not constitute the level of complexity or resources similar to the 
other procedures that we proposed to assign to proposed new MS-DRGs 268 
and 269. In addition, our clinical advisors determined that ICD-9-CM 
procedure code 39.54 (Re-entry operation (aorta)) and the corresponding 
ICD-10-PCS comparable code translations would be more appropriately 
classified under proposed new MS-DRGs 268 through 269 versus proposed 
new MS-DRGs 270 through 272. This decision is consistent with our 
proposal to assign more invasive procedures, such as open and 
endovascular repairs of the aorta with replacement grafts, to proposed 
new MS-DRGs 268 and 269. According to our clinical advisors, the 
procedure described by ICD-9-CM procedure code 39.54 and the comparable 
ICD-10-PCS code translations are precisely indicated for the aorta, 
and, as such, the procedure code belongs under proposed new MS-DRGs 268 
and 269 along with the other aorta and heart assist procedures.
    Comment: One commenter requested clarification on certain ICD-10-
PCS code translations for proposed new MS-DRGs 268 through 272 and how 
they relate to the General Equivalency Maps (GEMs) and ICD-10-PCS to 
ICD-9-CM Reimbursement Mappings files. The commenter noted that there 
were instances where more than one ICD-9-CM procedure code could be 
translated to an ICD-10-PCS code that was included in the proposed new 
MS-DRGs, as well as listed in the Reimbursement Mappings file. The 
commenter submitted an example where ICD-10-PCS code 04V00DZ 
(Restriction of abdominal aorta with intraluminal device, open 
approach) was listed as a comparable ICD-10-PCS translation for ICD-9-
CM procedure code 39.52 (Other repair of aneurysm) in the proposal for 
proposed new MS-DRGs 270 through 272. However, the commenter stated 
that, in the FY 2015 Reimbursement Mappings file, this same ICD-10-PCS 
code (04V00DZ) was shown to map to ICD-9-CM procedure code 39.71 
(Endovascular implantation of other graft in abdominal aorta), which 
was included in the proposal for proposed new MS-DRGs 268 and 269. The 
commenter asked if the FY 2016 Reimbursement Mappings file would be 
updated to reflect that ICD-10-PCS code 04V00DZ maps back to ICD-9-CM 
procedure code 39.52.
    Response: We acknowledge and appreciate the commenter's request for 
clarification. We point out that the General Equivalence Mappings 
(GEMs) and Reimbursement Mappings files were developed as resources for 
the public and are updated separate from the IPPS rulemaking. The GEMs 
were developed to provide users with a code to code translation 
reference tool for both ICD-9-CM and ICD-10 codes sets and to offer 
acceptable translation alternatives where possible. The Reimbursement 
Mappings were created to provide a temporary mechanism for mapping 
records containing ICD-10 codes to ``MS-DRG reimbursement minimum 
impact'' ICD-9-CM codes and allow claims processing by legacy systems 
while systems were being converted to process ICD-10 claims directly. 
The GEMs have been updated on an annual basis as part of the ICD-10 
Coordination and Maintenance Committee meetings process and will 
continue to be updated for approximately 3 years after ICD-10 is 
implemented. We refer readers to the ICD-10 Coordination and 
Maintenance Committee Meeting Materials for further information related 
to discussion of GEMs updates, which can be found on the CMS Web site 
at: http://www.cms.gov/Medicare/Coding/ICD9ProviderDiagnosticCodes/ICD-9-CM-C-and-M-Meeting-Materials.html. The Reimbursement Mappings have 
been updated on an annual basis in preparation for the transition to 
ICD-10 implementation. As stated on the CMS ICD-10 Coordination and 
Maintenance Committee Meeting Web page available on the CMS Web site 
at: http://www.cms.gov/Medicare/Coding/ICD10/2016-ICD-10-PCS-and-GEMs.html, the FY 2016 Reimbursement Mappings files will be posted in 
August 2015.
    Comment: One commenter who supported proposed new MS-DRGs 268 and 
269 requested that CMS revise the

[[Page 49389]]

titles to address concerns expressed by stakeholders. According to the 
commenter, the proposed titles have caused confusion among providers 
and consultants. The commenter suggested that CMS consider the 
following three modifications:
     Indicate that MS-DRGs 268 and 269 are aortic procedures, 
not aortic heart assist devices;
     Indicate that MS-DRGs 268 and 269 are assigned to heart 
assist removal or repair, and not the multitude of other heart assist 
insertion procedures not addressed in the proposed rule; and
     Remove the reference to pulsation balloon insertion, or 
add the reference to proposed new MS-DRGs 270 through 272 (Other Major 
Cardiovascular Procedures with MCC, with CC and without CC/MCC, 
respectively).
    The commenter noted that the titles for proposed new MS-DRGs 268 
and 269 contain the phrase ``Heart Assist Procedures''. However, the 
commenter stated that not all heart assist procedures are proposed to 
be assigned to these MS-DRGs; essentially, it is only the removal of 
heart assist procedures codes that are included. The commenter further 
noted that other heart assist procedures such as insertion of heart 
assist devices are identified in several other MS-DRGs, such as MS-DRGs 
001 and 002 (Heart Transplant or Implant of Heart Assist System w MCC 
and without MCC, respectively) and that external heart assist devices 
are identified in MS-DRG 215 (Other Heart Assist System Implant), while 
heart assist devices inserted percutaneously with cardiac 
catheterization are identified in MS-DRGs 216 through 218 (Cardiac 
Valve & Other Major Cardiothoracic Procedures with Cardiac 
Catheterization with MCC, with CC and without CC/MCC, respectively).
    The commenter also stated that the reference to ``Except Pulsation 
Balloon'' in the titles for proposed new MS-DRGs 268 and 269 indicates 
that all aortic and heart assist procedures would be included except 
pulsation balloon. The commenter asserted that the titles could cause 
confusion for stakeholders because there are other procedures that are 
nonpulsation balloon, heart assist procedures that correspond to the 
titles for proposed new MS-DRGs 268 and 269 and are assigned to other 
MS-DRGs. The commenter requested that CMS delete the terminology of 
pulsation balloon completely or remove it from proposed new MS-DRGs 268 
and 269 and add it to proposed new MS-DRGs 270 through 272. The 
commenter maintained that incorporating the reference to pulsation 
balloon into proposed new MS-DRGs 270 through 272 would afford a 
clearer understanding of the procedures that are assigned for 
providers.
    The commenter provided suggestions for the revision to the titles 
that CMS should take into consideration for proposed new MS-DRGs 268 
through 272 as follows:
     Suggested retitle of proposed new MS-DRG 268: ``Aortic 
Procedures and Heart Assist Removal or Repair with MCC'';
     Suggested retitle of proposed new MS-DRG 269: ``Aortic 
Procedures and Heart Assist Removal or Repair without MCC'';
     Suggested retitle of proposed new MS-DRG 270: ``Pulsation 
Balloon and Other Major Cardiovascular Procedures with MCC'';
     Suggested retitle of proposed new MS-DRG 271: ``Pulsation 
Balloon and Other Major Cardiovascular Procedures with CC''; and
     Suggested retitle of proposed new MS-DRG 272: ``Pulsation 
Balloon and Other Major Cardiovascular Procedures without CC/MCC''.
    Response: We acknowledge the commenter's request to consider 
revisions to the titles for proposed new MS-DRGs 268 through 272. 
However, we note that we did not receive any other comments from 
stakeholders expressing confusion with regard to the titles for these 
proposed new MS-DRGs or the assignment of heart assist procedures.
    The commenter is correct that not all heart assist procedures are 
being proposed for assignment to proposed new MS-DRGs 268 and 269. As 
the commenter pointed out, there are other heart assist procedures that 
group to various MS-DRGs. The proposal was based on ICD-9-CM procedure 
codes that are currently assigned to MS-DRGs 237 and 238 and the 
corresponding ICD-10-PCS code translations for proposed new MS-DRGs 268 
through 272. We believe that stakeholders understand that the MS-DRG 
system is a classification scheme consisting of clinically similar 
groups of patients with similar resource intensity, and that while the 
titles of the MS-DRGs reflect the category of procedures which may or 
may not be assigned to a particular MS-DRG, they do not specifically 
identify the details of each applicable procedure code. We also believe 
that stakeholders do not rely solely on the MS-DRG titles to determine 
what procedures are assigned to a particular MS-DRG. Rather, they would 
consult the MS-DRG Definitions Manual. The MS-DRG Definitions Manual 
contains the complete documentation of the MS-DRG GROUPER logic and is 
available from 3M/HIS, which, under contract with CMS, is responsible 
for updating and maintaining the GROUPER program. As discussed in the 
FY 2015 IPPS/LTCH PPS final rule (79 FR 49905 through 49906), the MS-
DRG Definitions Manual, Version 32, which includes the FY 2015 MS-DRG 
changes is available on a CD for $225. This manual may be obtained by 
writing 3M/HIS at the following address: 100 Barnes Road, Wallingford, 
CT 06492; or by calling (203) 949-0303; or by obtaining an order form 
at the Web site at: http://www/3MHIS.com. In addition, as discussed in 
section II.G.1.a. of this final rule, in November 2014, CMS made 
available a Definitions Manual of the ICD-10 MS-DRGs Version 32 on the 
ICD-10 MS-DRG Conversion Project Web site at: http://www.cms.gov/Medicare/Coding/ICD10/ICD-10-MS-DRG-Conversion-Project.html. 
Accordingly, we do not believe that the reference to ``Heart Assist 
Procedures'' in the title for proposed new MS-DRGs 268 and 269 would 
create confusion.
    For this same reason, we also do not believe that including the 
reference to ``except pulsation balloon'' in the titles for proposed 
new MS-DRGs 268 and 269, to accurately reflect that the pulsation 
balloon procedure is not assigned to those MS-DRGs, necessarily 
indicates that all other aortic and heart assist procedures are 
included. We would expect stakeholders to consult the MS-DRG 
Definitions Manual as described above to identify and determine whether 
a particular procedure is assigned to MS-DRG 268 or 269 or to another 
MS-DRG, rather than relying on the MS-DRGs title alone.
    After consideration of the public comments received, we are 
adopting as final our proposal to delete ICD-9-CM MS-DRGs 237 and 238 
and add the following five new MS-DRGs to ICD-10 MS-DRGs Version 33:
     MS-DRG 268 (Aortic and Heart Assist Procedures Except 
Pulsation Balloon with MCC);
     MS-DRG 269 (Aortic and Heart Assist Procedures Except 
Pulsation Balloon without MCC);
     MS-DRG 270 (Other Major Cardiovascular Procedures with 
MCC);
     MS-DRG 271 (Other Major Cardiovascular Procedures with 
CC); and
     MS-DRG 272 (Other Major Cardiovascular Procedures without 
CC/MCC)
    We agree that these modifications will more appropriately reflect 
payment while recognizing differences in complexity, resources and 
severity of illness for the various cardiovascular

[[Page 49390]]

procedures. These finalized ICD-10 MS-DRGs will include the updated 
assignments discussed above related to the ICD-10-PCS code translations 
for ICD-9-CM codes 37.49 (Other repair of heart and pericardium) and 
39.54 (Re-entry operation (aorta)). We also refer readers to the 
updated Table 6P for this final rule which is available via the 
Internet on the CMS Web site at: http://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/AcuteInpatientPPS/index.html. Lastly, we will 
consider if further modifications to the titles of these MS-DRGs are 
warranted in future rulemaking.
4. MDC 8 (Diseases and Disorders of the Musculoskeletal System and 
Connective Tissue)
a. Revision of Hip or Knee Replacements: Proposed Revision of ICD-10-
PCS Version 32 Logic
    We received two comments that the logic for ICD-10 MS-DRGs Version 
32 does not work the same as it does for the ICD-9-CM based MS-DRGs 
Version 32 for procedures involving joint revisions. One of the 
commenters requested that CMS change the MS-DRG structure for 
procedures involving joint revisions within the ICD-10 MS-DRGs 466, 
467, and 468 (Revision of Hip or Knee Replacement with MCC, with CC, 
and without CC/MCC, respectively) so that cases that have a spacer 
removed prior to the insertion of a new joint prosthesis are assigned 
to MS-DRG 466, 467, and 468, as is the case with the ICD-9-CM MS-DRGs. 
The other commenter asked that joint revision cases that involve knee 
revisions with cemented and uncemented qualifiers be assigned to these 
MS-DRGs. This commenter provided an example of a patient admitted for a 
knee revision and reported under ICD-10-PCS codes 0SPD0JZ (Removal of 
synthetic substitute from left knee joint, open approach) and 0SRU0JA 
(Replacement of left knee joint, femoral surface with synthetic 
substitute, uncemented, open approach), which should be assigned to MS-
DRGs 466, 467, and 468. The requestor stated that joint revision cases 
reported with ICD-9-CM codes are assigned to MS-DRGs 466, 467, and 468, 
but similar cases reported with the corresponding ICD-10-PCS codes are 
not assigned to MS-DRGs 466, 467, and 468 in ICD-10-PCS MS-DRGs Version 
32.
    We agree that joint revision cases involving the removal of a 
spacer and subsequent insertion of a new joint prosthesis should be 
assigned to ICD-10 MS-DRGs 466, 467, and 468 as is the case currently 
with the ICD-9-CM based MS-DRGs Version 32. We also agree that knee 
revision cases that involve cemented and uncemented qualifiers should 
be assigned to ICD-10 MS-DRGs 466, 467, and 468. Knee revision cases 
currently reported with ICD-9-CM codes are assigned to MS-DRGs 466, 
467, and 468 in the ICD-9-CM based MS-DRGs. We examined joint revision 
combination codes that are not currently assigned to MS-DRGs 466, 467, 
and 468 in ICD-10 MS-DRGs Version 32 and identified additional 
combinations that also should be included so that the joint revision 
ICD-10 MS-DRGs would have the same logic as the ICD-9-CM MS-DRGs. In 
the FY 2016 IPPS/LTCH PPS proposed rule (80 FR 24379 through 24395), we 
proposed to add code combinations listed in a table in the proposed 
rule that would capture the joint revisions to the Version 33 MS-DRG 
structure for ICD-10 MS-DRGs 466, 467, and 468 that we proposed to 
implement effective October 1, 2015. We invited public comments on our 
proposal to add the joint revision code combinations to MS-DRGs 466, 
467, and 468 that were listed in the table in the proposed rule (80 FR 
24379 through 24395).
    Comment: A number of commenters supported the proposal to add the 
joint revision code combinations to MS-DRGs 466, 467, and 468. The 
commenters stated that the proposal was reasonable, given the data and 
information provided. One commenter commended CMS for its careful 
review of these code pairs for hip and knee revision cases and 
supported the proposed updates. Another commenter supported the 
proposed MS-DRG assignment changes which the commenter believed would 
help to ensure that the ICD-10 MS-DRGs capture the appropriate ICD-10 
procedure codes. One commenter stated that the proposed MS-DRG 
assignment changes improve alignment of these cases under the ICD-10 
framework.
    Response: We appreciate the commenters' support for our proposal.
    After consideration of the public comments we received, we are 
finalizing our proposal to add code combinations which capture the 
joint revision procedures set forth in the table below to the Version 
33 MS-DRG structure for ICD-10 MS-DRGs 466, 467, and 468 that will be 
implemented effective October 1, 2015. We note that joint revision 
procedures are also included in the ICD-9-CM version of MS-DRGs 628, 
629, and 630 (Other Endocrine, Nutritional, and Metabolic Operating 
Room Procedures with MCC, with CC, and without CC/MCC, respectively). 
Therefore, to ensure that the joint revision ICD-10 MS-DRGs would have 
the same logic as the ICD-9-CM MS-DRGs, any updates to the joint 
revision combinations would apply to MS-DRGs 466, 467, and 468 as well 
as MS-DRGs 628, 629, and 630 because both sets of MS-DRGs contain the 
same joint revision codes. These comparable joint revisions 
combinations updates also will be made to MS-DRGs 628, 629, and 630 in 
the Version 33 MS-DRG structure for ICD-10 to maintain consistency with 
the logic for the ICD-9-CM MS-DRGs, effective October 1, 2015. 
Therefore, the joint revision combination codes that we are finalizing 
in this final rule are the same for MS-DRGs 466, 467, 468, 628, 629, 
and 630 and are reflected in the updated table below.

  MS-DRGs 466-468 and 628-630 ICD-10-PCS Code Pairs Added to the Version 33 ICD-10 MS-DRGs 466, 467, 468, 628,
                             629, and 630: New Hip Revision ICD-10-PCS Combinations
----------------------------------------------------------------------------------------------------------------
     ICD-10-PCS code           Code description                   ICD-10-PCS code           Code description
----------------------------------------------------------------------------------------------------------------
0SP908Z..................  Removal of spacer from      and   0SR9019..................  Replacement of right hip
                            right hip joint, open                                        joint with metal
                            approach.                                                    synthetic substitute,
                                                                                         cemented, open
                                                                                         approach.
0SP908Z..................  Removal of spacer from      and   0SR901A..................  Replacement of right hip
                            right hip joint, open                                        joint with metal
                            approach.                                                    synthetic substitute,
                                                                                         uncemented, open
                                                                                         approach.
0SP908Z..................  Removal of spacer from      and   0SR901Z..................  Replacement of right hip
                            right hip joint, open                                        joint with metal
                            approach.                                                    synthetic substitute,
                                                                                         open approach.
0SP908Z..................  Removal of spacer from      and   0SR9029..................  Replacement of right hip
                            right hip joint, open                                        joint with metal on
                            approach.                                                    polyethylene synthetic
                                                                                         substitute, cemented,
                                                                                         open approach.

[[Page 49391]]

 
0SP908Z..................  Removal of spacer from      and   0SR902A..................  Replacement of right hip
                            right hip joint, open                                        joint with metal on
                            approach.                                                    polyethylene synthetic
                                                                                         substitute, uncemented,
                                                                                         open approach.
0SP908Z..................  Removal of spacer from      and   0SR902Z..................  Replacement of right hip
                            right hip joint, open                                        joint with metal on
                            approach.                                                    polyethylene synthetic
                                                                                         substitute, open
                                                                                         approach.
0SP908Z..................  Removal of spacer from      and   0SR9039..................  Replacement of right hip
                            right hip joint, open                                        joint with ceramic
                            approach.                                                    synthetic substitute,
                                                                                         cemented, open
                                                                                         approach.
0SP908Z..................  Removal of spacer from      and   0SR903A..................  Replacement of right hip
                            right hip joint, open                                        joint with ceramic
                            approach.                                                    synthetic substitute,
                                                                                         uncemented, open
                                                                                         approach.
0SP908Z..................  Removal of spacer from      and   0SR903Z..................  Replacement of right hip
                            right hip joint, open                                        joint with ceramic
                            approach.                                                    synthetic substitute,
                                                                                         open approach.
0SP908Z..................  Removal of spacer from      and   0SR9049..................  Replacement of right hip
                            right hip joint, open                                        joint with ceramic on
                            approach.                                                    polyethylene synthetic
                                                                                         substitute, cemented,
                                                                                         open approach.
0SP908Z..................  Removal of spacer from      and   0SR904A..................  Replacement of right hip
                            right hip joint, open                                        joint with ceramic on
                            approach.                                                    polyethylene synthetic
                                                                                         substitute, uncemented,
                                                                                         open approach.
0SP908Z..................  Removal of spacer from      and   0SR904Z..................  Replacement of right hip
                            right hip joint, open                                        joint with ceramic on
                            approach.                                                    polyethylene synthetic
                                                                                         substitute, open
                                                                                         approach.
0SP908Z..................  Removal of spacer from      and   0SR90J9..................  Replacement of right hip
                            right hip joint, open                                        joint with synthetic
                            approach.                                                    substitute, cemented,
                                                                                         open approach.
0SP908Z..................  Removal of spacer from      and   0SR90JA..................  Replacement of right hip
                            right hip joint, open                                        joint with synthetic
                            approach.                                                    substitute, uncemented,
                                                                                         open approach.
0SP908Z..................  Removal of spacer from      and   0SR90JZ..................  Replacement of right hip
                            right hip joint, open                                        joint with synthetic
                            approach.                                                    substitute, open
                                                                                         approach.
0SP908Z..................  Removal of spacer from      and   0SRA009..................  Replacement of right hip
                            right hip joint, open                                        joint, acetabular
                            approach.                                                    surface with
                                                                                         polyethylene synthetic
                                                                                         substitute, cemented,
                                                                                         open approach.
0SP908Z..................  Removal of spacer from      and   0SRA00A..................  Replacement of right hip
                            right hip joint, open                                        joint, acetabular
                            approach.                                                    surface with
                                                                                         polyethylene synthetic
                                                                                         substitute, uncemented,
                                                                                         open approach.
0SP908Z..................  Removal of spacer from      and   0SRA00Z..................  Replacement of right hip
                            right hip joint, open                                        joint, acetabular
                            approach.                                                    surface with
                                                                                         polyethylene synthetic
                                                                                         substitute, open
                                                                                         approach.
0SP908Z..................  Removal of spacer from      and   0SRA019..................  Replacement of right hip
                            right hip joint, open                                        joint, acetabular
                            approach.                                                    surface with metal
                                                                                         synthetic substitute,
                                                                                         cemented, open
                                                                                         approach.
0SP908Z..................  Removal of spacer from      and   0SRA01A..................  Replacement of right hip
                            right hip joint, open                                        joint, acetabular
                            approach.                                                    surface with metal
                                                                                         synthetic substitute,
                                                                                         uncemented, open
                                                                                         approach.
0SP908Z..................  Removal of spacer from      and   0SRA01Z..................  Replacement of right hip
                            right hip joint, open                                        joint, acetabular
                            approach.                                                    surface with metal
                                                                                         synthetic substitute,
                                                                                         open approach.
0SP908Z..................  Removal of spacer from      and   0SRA039..................  Replacement of right hip
                            right hip joint, open                                        joint, acetabular
                            approach.                                                    surface with ceramic
                                                                                         synthetic substitute,
                                                                                         cemented, open
                                                                                         approach.
0SP908Z..................  Removal of spacer from      and   0SRA03A..................  Replacement of right hip
                            right hip joint, open                                        joint, acetabular
                            approach.                                                    surface with ceramic
                                                                                         synthetic substitute,
                                                                                         uncemented, open
                                                                                         approach.
0SP908Z..................  Removal of spacer from      and   0SRA03Z..................  Replacement of right hip
                            right hip joint, open                                        joint, acetabular
                            approach.                                                    surface with ceramic
                                                                                         synthetic substitute,
                                                                                         open approach.
0SP908Z..................  Removal of spacer from      and   0SRA0J9..................  Replacement of right hip
                            right hip joint, open                                        joint, acetabular
                            approach.                                                    surface with synthetic
                                                                                         substitute, cemented,
                                                                                         pen approach.
0SP908Z..................  Removal of spacer from      and   0SRA0JA..................  Replacement of right hip
                            right hip joint, open                                        joint, acetabular
                            approach.                                                    surface with synthetic
                                                                                         substitute, uncemented,
                                                                                         open approach.
0SP908Z..................  Removal of spacer from      and   0SRA0JZ..................  Replacement of right hip
                            right hip joint, open                                        joint, acetabular
                            approach.                                                    surface with synthetic
                                                                                         substitute, open
                                                                                         approach.
0SP908Z..................  Removal of spacer from      and   0SRR019..................  Replacement of right hip
                            right hip joint, open                                        joint, femoral surface
                            approach.                                                    with metal synthetic
                                                                                         substitute, cemented,
                                                                                         open approach.
0SP908Z..................  Removal of spacer from      and   0SRR01A..................  Replacement of right hip
                            right hip joint, open                                        joint, femoral surface
                            approach.                                                    with metal synthetic
                                                                                         substitute, uncemented,
                                                                                         open approach.
0SP908Z..................  Removal of spacer from      and   0SRR01Z..................  Replacement of right hip
                            right hip joint, open                                        joint, femoral surface
                            approach.                                                    with metal synthetic
                                                                                         substitute, open
                                                                                         approach.

[[Page 49392]]

 
0SP908Z..................  Removal of spacer from      and   0SRR039..................  Replacement of right hip
                            right hip joint, open                                        joint, femoral surface
                            approach.                                                    with ceramic synthetic
                                                                                         substitute, cemented,
                                                                                         open approach.
0SP908Z..................  Removal of spacer from      and   0SRR03A..................  Replacement of right hip
                            right hip joint, open                                        joint, femoral surface
                            approach.                                                    with ceramic synthetic
                                                                                         substitute, uncemented,
                                                                                         open approach.
0SP908Z..................  Removal of spacer from      and   0SRR03Z..................  Replacement of right hip
                            right hip joint, open                                        joint, femoral surface
                            approach.                                                    with ceramic synthetic
                                                                                         substitute, open
                                                                                         approach.
0SP908Z..................  Removal of spacer from      and   0SRR0J9..................  Replacement of right hip
                            right hip joint, open                                        joint, femoral surface
                            approach.                                                    with synthetic
                                                                                         substitute, cemented,
                                                                                         open approach.
0SP908Z..................  Removal of spacer from      and   0SRR0JA..................  Replacement of right hip
                            right hip joint, open                                        joint, femoral surface
                            approach.                                                    with synthetic
                                                                                         substitute, uncemented,
                                                                                         open approach.
0SP908Z..................  Removal of spacer from      and   0SRR0JZ..................  Replacement of right hip
                            right hip joint, open                                        joint, femoral surface
                            approach.                                                    with synthetic
                                                                                         substitute, open
                                                                                         approach.
0SP908Z..................  Removal of spacer from      and   0SU909Z..................  Supplement right hip
                            right hip joint, open                                        joint with liner, open
                            approach.                                                    approach.
0SP908Z..................  Removal of spacer from      and   0SUA09Z..................  Supplement right hip
                            right hip joint, open                                        joint, acetabular
                            approach.                                                    surface with liner,
                                                                                         open approach.
0SP908Z..................  Removal of spacer from      and   0SUR09Z..................  Supplement right hip
                            right hip joint, open                                        joint, femoral surface
                            approach.                                                    with liner, open
                                                                                         approach.
0SP909Z..................  Removal of liner from       and   0SR9019..................  Replacement of right hip
                            right hip joint, open                                        joint with metal
                            approach.                                                    synthetic substitute,
                                                                                         cemented, open
                                                                                         approach.
0SP909Z..................  Removal of liner from       and   0SR901A..................  Replacement of right hip
                            right hip joint, open                                        joint with metal
                            approach.                                                    synthetic substitute,
                                                                                         uncemented, open
                                                                                         approach.
0SP909Z..................  Removal of liner from       and   0SR901Z..................  Replacement of right hip
                            right hip joint, open                                        joint with metal
                            approach.                                                    synthetic substitute,
                                                                                         open approach.
0SP909Z..................  Removal of liner from       and   0SR9029..................  Replacement of right hip
                            right hip joint, open                                        joint with metal on
                            approach.                                                    polyethylene synthetic
                                                                                         substitute, cemented,
                                                                                         open approach.
0SP909Z..................  Removal of liner from       and   0SR902A..................  Replacement of right hip
                            right hip joint, open                                        joint with metal on
                            approach.                                                    polyethylene synthetic
                                                                                         substitute, uncemented,
                                                                                         open approach.
0SP909Z..................  Removal of liner from       and   0SR902Z..................  Replacement of right hip
                            right hip joint, open                                        joint with metal on
                            approach.                                                    polyethylene synthetic
                                                                                         substitute, open
                                                                                         approach.
0SP909Z..................  Removal of liner from       and   0SR9039..................  Replacement of right hip
                            right hip joint, open                                        joint with ceramic
                            approach.                                                    synthetic substitute,
                                                                                         cemented, open
                                                                                         approach.
0SP909Z..................  Removal of liner from       and   0SR903A..................  Replacement of right hip
                            right hip joint, open                                        joint with ceramic
                            approach.                                                    synthetic substitute,
                                                                                         uncemented, open
                                                                                         approach.
0SP909Z..................  Removal of liner from       and   0SR903Z..................  Replacement of right hip
                            right hip joint, open                                        joint with ceramic
                            approach.                                                    synthetic substitute,
                                                                                         open approach.
0SP909Z..................  Removal of liner from       and   0SR9049..................  Replacement of right hip
                            right hip joint, open                                        joint with ceramic on
                            approach.                                                    polyethylene synthetic
                                                                                         substitute, cemented,
                                                                                         open approach.
0SP909Z..................  Removal of liner from       and   0SR904A..................  Replacement of right hip
                            right hip joint, open                                        joint with ceramic on
                            approach.                                                    polyethylene synthetic
                                                                                         substitute, uncemented,
                                                                                         open approach.
0SP909Z..................  Removal of liner from       and   0SR904Z..................  Replacement of right hip
                            right hip joint, open                                        joint with ceramic on
                            approach.                                                    polyethylene synthetic
                                                                                         substitute, open
                                                                                         approach.
0SP909Z..................  Removal of liner from       and   0SR90J9..................  Replacement of right hip
                            right hip joint, open                                        joint with synthetic
                            approach.                                                    substitute, cemented,
                                                                                         open approach.
0SP909Z..................  Removal of liner from       and   0SR90JA..................  Replacement of right hip
                            right hip joint, open                                        joint with synthetic
                            approach.                                                    substitute, uncemented,
                                                                                         open approach.
0SP909Z..................  Removal of liner from       and   0SR90JZ..................  Replacement of right hip
                            right hip joint, open                                        joint with synthetic
                            approach.                                                    substitute, open
                                                                                         approach.
0SP909Z..................  Removal of liner from       and   0SRA009..................  Replacement of right hip
                            right hip joint, open                                        joint, acetabular
                            approach.                                                    surface with
                                                                                         polyethylene synthetic
                                                                                         substitute, cemented,
                                                                                         open approach.
0SP909Z..................  Removal of liner from       and   0SRA00A..................  Replacement of right hip
                            right hip joint, open                                        joint, acetabular
                            approach.                                                    surface with
                                                                                         polyethylene synthetic
                                                                                         substitute, uncemented,
                                                                                         open approach.
0SP909Z..................  Removal of liner from       and   0SRA00Z..................  Replacement of right hip
                            right hip joint, open                                        joint, acetabular
                            approach.                                                    surface with
                                                                                         polyethylene synthetic
                                                                                         substitute, open
                                                                                         approach.
0SP909Z..................  Removal of liner from       and   0SRA019..................  Replacement of right hip
                            right hip joint, open                                        joint, acetabular
                            approach.                                                    surface with metal
                                                                                         synthetic substitute,
                                                                                         cemented, open
                                                                                         approach.
0SP909Z..................  Removal of liner from       and   0SRA01A..................  Replacement of right hip
                            right hip joint, open                                        joint, acetabular
                            approach.                                                    surface with metal
                                                                                         synthetic substitute,
                                                                                         uncemented, open
                                                                                         approach.

[[Page 49393]]

 
0SP909Z..................  Removal of liner from       and   0SRA01Z..................  Replacement of right hip
                            right hip joint, open                                        joint, acetabular
                            approach.                                                    surface with metal
                                                                                         synthetic substitute,
                                                                                         open approach.
0SP909Z..................  Removal of liner from       and   0SRA039..................  Replacement of right hip
                            right hip joint, open                                        joint, acetabular
                            approach.                                                    surface with ceramic
                                                                                         synthetic substitute,
                                                                                         cemented, open
                                                                                         approach.
0SP909Z..................  Removal of liner from       and   0SRA03A..................  Replacement of right hip
                            right hip joint, open                                        joint, acetabular
                            approach.                                                    surface with ceramic
                                                                                         synthetic substitute,
                                                                                         uncemented, open
                                                                                         approach.
0SP909Z..................  Removal of liner from       and   0SRA03Z..................  Replacement of right hip
                            right hip joint, open                                        joint, acetabular
                            approach.                                                    surface with ceramic
                                                                                         synthetic substitute,
                                                                                         open approach.
0SP909Z..................  Removal of liner from       and   0SRA0J9..................  Replacement of right hip
                            right hip joint, open                                        joint, acetabular
                            approach.                                                    surface with synthetic
                                                                                         substitute, cemented,
                                                                                         open approach.
0SP909Z..................  Removal of liner from       and   0SRA0JA..................  Replacement of right hip
                            right hip joint, open                                        joint, acetabular
                            approach.                                                    surface with synthetic
                                                                                         substitute, uncemented,
                                                                                         open approach.
0SP909Z..................  Removal of liner from       and   0SRA0JZ..................  Replacement of right hip
                            right hip joint, open                                        joint, acetabular
                            approach.                                                    surface with synthetic
                                                                                         substitute, open
                                                                                         approach.
0SP909Z..................  Removal of liner from       and   0SRR019..................  Replacement of right hip
                            right hip joint, open                                        joint, femoral surface
                            approach.                                                    with metal synthetic
                                                                                         substitute, cemented,
                                                                                         open approach.
0SP909Z..................  Removal of liner from       and   0SRR01A..................  Replacement of right hip
                            right hip joint, open                                        joint, femoral surface
                            approach.                                                    with metal synthetic
                                                                                         substitute, uncemented,
                                                                                         open approach.
0SP909Z..................  Removal of liner from       and   0SRR01Z..................  Replacement of right hip
                            right hip joint, open                                        joint, femoral surface
                            approach.                                                    with metal synthetic
                                                                                         substitute, open
                                                                                         approach.
0SP909Z..................  Removal of liner from       and   0SRR039..................  Replacement of right hip
                            right hip joint, open                                        joint, femoral surface
                            approach.                                                    with ceramic synthetic
                                                                                         substitute, cemented,
                                                                                         open approach.
0SP909Z..................  Removal of liner from       and   0SRR03A..................  Replacement of right hip
                            right hip joint, open                                        joint, femoral surface
                            approach.                                                    with ceramic synthetic
                                                                                         substitute, uncemented,
                                                                                         open approach.
0SP909Z..................  Removal of liner from       and   0SRR03Z..................  Replacement of right hip
                            right hip joint, open                                        joint, femoral surface
                            approach.                                                    with ceramic synthetic
                                                                                         substitute, open
                                                                                         approach.
0SP909Z..................  Removal of liner from       and   0SRR0J9..................  Replacement of right hip
                            right hip joint, open                                        joint, femoral surface
                            approach.                                                    with synthetic
                                                                                         substitute, cemented,
                                                                                         open approach.
0SP909Z..................  Removal of liner from       and   0SRR0JA..................  Replacement of right hip
                            right hip joint, open                                        joint, femoral surface
                            approach.                                                    with synthetic
                                                                                         substitute, uncemented,
                                                                                         open approach.
0SP909Z..................  Removal of liner from       and   0SRR0JZ..................  Replacement of right hip
                            right hip joint, open                                        joint, femoral surface
                            approach.                                                    with synthetic
                                                                                         substitute, open
                                                                                         approach.
0SP909Z..................  Removal of liner from       and   0SU909Z..................  Supplement right hip
                            right hip joint, open                                        joint with liner, open
                            approach.                                                    approach.
0SP909Z..................  Removal of liner from       and   0SUA09Z..................  Supplement right hip
                            right hip joint, open                                        joint, acetabular
                            approach.                                                    surface with liner,
                                                                                         open approach.
0SP909Z..................  Removal of liner from       and   0SUR09Z..................  Supplement right hip
                            right hip joint, open                                        joint, femoral surface
                            approach.                                                    with liner, open
                                                                                         approach.
0SP90BZ..................  Removal of resurfacing      and   0SR9019..................  Replacement of right hip
                            device from right hip                                        joint with metal
                            joint, open approach.                                        synthetic substitute,
                                                                                         cemented, open
                                                                                         approach.
0SP90BZ..................  Removal of resurfacing      and   0SR901A..................  Replacement of right hip
                            device from right hip                                        joint with metal
                            joint, open approach.                                        synthetic substitute,
                                                                                         uncemented, open
                                                                                         approach.
0SP90BZ..................  Removal of resurfacing      and   0SR901Z..................  Replacement of right hip
                            device from right hip                                        joint with metal
                            joint, open approach.                                        synthetic substitute,
                                                                                         open approach.
0SP90BZ..................  Removal of resurfacing      and   0SR9029..................  Replacement of right hip
                            device from right hip                                        joint with metal on
                            joint, open approach.                                        polyethylene synthetic
                                                                                         substitute, cemented,
                                                                                         open approach.
0SP90BZ..................  Removal of resurfacing      and   0SR902A..................  Replacement of right hip
                            device from right hip                                        joint with metal on
                            joint, open approach.                                        polyethylene synthetic
                                                                                         substitute, uncemented,
                                                                                         open approach.
0SP90BZ..................  Removal of resurfacing      and   0SR902Z..................  Replacement of right hip
                            device from right hip                                        joint with metal on
                            joint, open approach.                                        polyethylene synthetic
                                                                                         substitute, open
                                                                                         approach.
0SP90BZ..................  Removal of resurfacing      and   0SR9039..................  Replacement of right hip
                            device from right hip                                        joint with ceramic
                            joint, open approach.                                        synthetic substitute,
                                                                                         cemented, open
                                                                                         approach.
0SP90BZ..................  Removal of resurfacing      and   0SR903A..................  Replacement of right hip
                            device from right hip                                        joint with ceramic
                            joint, open approach.                                        synthetic substitute,
                                                                                         uncemented, open
                                                                                         approach.
0SP90BZ..................  Removal of resurfacing      and   0SR903Z..................  Replacement of right hip
                            device from right hip                                        joint with ceramic
                            joint, open approach.                                        synthetic substitute,
                                                                                         open approach.

[[Page 49394]]

 
0SP90BZ..................  Removal of resurfacing      and   0SR9049..................  Replacement of right hip
                            device from right hip                                        joint with ceramic on
                            joint, open approach.                                        polyethylene synthetic
                                                                                         substitute, cemented,
                                                                                         open approach.
0SP90BZ..................  Removal of resurfacing      and   0SR904A..................  Replacement of right hip
                            device from right hip                                        joint with ceramic on
                            joint, open approach.                                        polyethylene synthetic
                                                                                         substitute, uncemented,
                                                                                         open approach.
0SP90BZ..................  Removal of resurfacing      and   0SR904Z..................  Replacement of right hip
                            device from right hip                                        joint with ceramic on
                            joint, open approach.                                        polyethylene synthetic
                                                                                         substitute, open
                                                                                         approach.
0SP90BZ..................  Removal of resurfacing      and   0SR90J9..................  Replacement of right hip
                            device from right hip                                        joint with synthetic
                            joint, open approach.                                        substitute, cemented,
                                                                                         open approach.
0SP90BZ..................  Removal of resurfacing      and   0SR90JA..................  Replacement of right hip
                            device from right hip                                        joint with synthetic
                            joint, open approach.                                        substitute, uncemented,
                                                                                         open approach.
0SP90BZ..................  Removal of resurfacing      and   0SR90JZ..................  Replacement of right hip
                            device from right hip                                        joint with synthetic
                            joint, open approach.                                        substitute, open
                                                                                         approach.
0SP90BZ..................  Removal of resurfacing      and   0SRA009..................  Replacement of right hip
                            device from right hip                                        joint, acetabular
                            joint, open approach.                                        surface with
                                                                                         polyethylene synthetic
                                                                                         substitute, cemented,
                                                                                         open approach.
0SP90BZ..................  Removal of resurfacing      and   0SRA00A..................  Replacement of right hip
                            device from right hip                                        joint, acetabular
                            joint, open approach.                                        surface with
                                                                                         polyethylene synthetic
                                                                                         substitute, uncemented,
                                                                                         open approach.
0SP90BZ..................  Removal of resurfacing      and   0SRA00Z..................  Replacement of right hip
                            device from right hip                                        joint, acetabular
                            joint, open approach.                                        surface with
                                                                                         polyethylene synthetic
                                                                                         substitute, open
                                                                                         approach.
0SP90BZ..................  Removal of resurfacing      and   0SRA019..................  Replacement of right hip
                            device from right hip                                        joint, acetabular
                            joint, open approach.                                        surface with metal
                                                                                         synthetic substitute,
                                                                                         cemented, open
                                                                                         approach.
0SP90BZ..................  Removal of resurfacing      and   0SRA01A..................  Replacement of right hip
                            device from right hip                                        joint, acetabular
                            joint, open approach.                                        surface with metal
                                                                                         synthetic substitute,
                                                                                         uncemented, open
                                                                                         approach.
0SP90BZ..................  Removal of resurfacing      and   0SRA01Z..................  Replacement of right hip
                            device from right hip                                        joint, acetabular
                            joint, open approach.                                        surface with metal
                                                                                         synthetic substitute,
                                                                                         open approach.
0SP90BZ..................  Removal of resurfacing      and   0SRA039..................  Replacement of right hip
                            device from right hip                                        joint, acetabular
                            joint, open approach.                                        surface with ceramic
                                                                                         synthetic substitute,
                                                                                         cemented, open
                                                                                         approach.
0SP90BZ..................  Removal of resurfacing      and   0SRA03A..................  Replacement of right hip
                            device from right hip                                        joint, acetabular
                            joint, open approach.                                        surface with ceramic
                                                                                         synthetic substitute,
                                                                                         uncemented, open
                                                                                         approach.
0SP90BZ..................  Removal of resurfacing      and   0SRA03Z..................  Replacement of right hip
                            device from right hip                                        joint, acetabular
                            joint, open approach.                                        surface with ceramic
                                                                                         synthetic substitute,
                                                                                         open approach.
0SP90BZ..................  Removal of resurfacing      and   0SRA0J9..................  Replacement of right hip
                            device from right hip                                        joint, acetabular
                            joint, open approach.                                        surface with synthetic
                                                                                         substitute, cemented,
                                                                                         open approach.
0SP90BZ..................  Removal of resurfacing      and   0SRA0JA..................  Replacement of right hip
                            device from right hip                                        joint, acetabular
                            joint, open approach.                                        surface with synthetic
                                                                                         substitute, uncemented,
                                                                                         open approach.
0SP90BZ..................  Removal of resurfacing      and   0SRA0JZ..................  Replacement of right hip
                            device from right hip                                        joint, acetabular
                            joint, open approach.                                        surface with synthetic
                                                                                         substitute, open
                                                                                         approach.
0SP90BZ..................  Removal of resurfacing      and   0SRR019..................  Replacement of right hip
                            device from right hip                                        joint, femoral surface
                            joint, open approach.                                        with metal synthetic
                                                                                         substitute, cemented,
                                                                                         open approach.
0SP90BZ..................  Removal of resurfacing      and   0SRR01A..................  Replacement of right hip
                            device from right hip                                        joint, femoral surface
                            joint, open approach.                                        with metal synthetic
                                                                                         substitute, uncemented,
                                                                                         open approach.
0SP90BZ..................  Removal of resurfacing      and   0SRR01Z..................  Replacement of right hip
                            device from right hip                                        joint, femoral surface
                            joint, open approach.                                        with metal synthetic
                                                                                         substitute, open
                                                                                         approach.
0SP90BZ..................  Removal of resurfacing      and   0SRR039..................  Replacement of right hip
                            device from right hip                                        joint, femoral surface
                            joint, open approach.                                        with ceramic synthetic
                                                                                         substitute, cemented,
                                                                                         open approach.
0SP90BZ..................  Removal of resurfacing      and   0SRR03A..................  Replacement of right hip
                            device from right hip                                        joint, femoral surface
                            joint, open approach.                                        with ceramic synthetic
                                                                                         substitute, uncemented,
                                                                                         open approach.
0SP90BZ..................  Removal of resurfacing      and   0SRR03Z..................  Replacement of right hip
                            device from right hip                                        joint, femoral surface
                            joint, open approach.                                        with ceramic synthetic
                                                                                         substitute, open
                                                                                         approach.
0SP90BZ..................  Removal of resurfacing      and   0SRR0J9..................  Replacement of right hip
                            device from right hip                                        joint, femoral surface
                            joint, open approach.                                        with synthetic
                                                                                         substitute, cemented,
                                                                                         open approach.
0SP90BZ..................  Removal of resurfacing      and   0SRR0JA..................  Replacement of right hip
                            device from right hip                                        joint, femoral surface
                            joint, open approach.                                        with synthetic
                                                                                         substitute, uncemented,
                                                                                         open approach.

[[Page 49395]]

 
0SP90BZ..................  Removal of resurfacing      and   0SRR0JZ..................  Replacement of right hip
                            device from right hip                                        joint, femoral surface
                            joint, open approach.                                        with synthetic
                                                                                         substitute, open
                                                                                         approach.
0SP90BZ..................  Removal of resurfacing      and   0SU909Z..................  Supplement right hip
                            device from right hip                                        joint with liner, open
                            joint, open approach.                                        approach.
0SP90BZ..................  Removal of resurfacing      and   0SUA09Z..................  Supplement right hip
                            device from right hip                                        joint, acetabular
                            joint, open approach.                                        surface with liner,
                                                                                         open approach.
0SP90BZ..................  Removal of resurfacing      and   0SUR09Z..................  Supplement right hip
                            device from right hip                                        joint, femoral surface
                            joint, open approach.                                        with liner, open
                                                                                         approach.
0SP90JZ..................  Removal of synthetic        and   0SR9049..................  Replacement of right hip
                            substitute from right                                        joint with ceramic on
                            hip joint, open                                              polyethylene synthetic
                            approach.                                                    substitute, cemented,
                                                                                         open approach.
0SP90JZ..................  Removal of synthetic        and   0SR904A..................  Replacement of right hip
                            substitute from right                                        joint with ceramic on
                            hip joint, open                                              polyethylene synthetic
                            approach.                                                    substitute, uncemented,
                                                                                         open approach.
0SP90JZ..................  Removal of synthetic        and   0SR904Z..................  Replacement of right hip
                            substitute from right                                        joint with ceramic on
                            hip joint, open                                              polyethylene synthetic
                            approach.                                                    substitute, open
                                                                                         approach.
0SP948Z..................  Removal of spacer from      and   0SR9019..................  Replacement of right hip
                            right hip joint,                                             joint with metal
                            percutaneous endoscopic                                      synthetic substitute,
                            approach.                                                    cemented, open
                                                                                         approach.
0SP948Z..................  Removal of spacer from      and   0SR901A..................  Replacement of right hip
                            right hip joint,                                             joint with metal
                            percutaneous endoscopic                                      synthetic substitute,
                            approach.                                                    uncemented, open
                                                                                         approach.
0SP948Z..................  Removal of spacer from      and   0SR901Z..................  Replacement of right hip
                            right hip joint,                                             joint with metal
                            percutaneous endoscopic                                      synthetic substitute,
                            approach.                                                    open approach.
0SP948Z..................  Removal of spacer from      and   0SR9029..................  Replacement of right hip
                            right hip joint,                                             joint with metal on
                            percutaneous endoscopic                                      polyethylene synthetic
                            approach.                                                    substitute, cemented,
                                                                                         open approach.
0SP948Z..................  Removal of spacer from      and   0SR902A..................  Replacement of right hip
                            right hip joint,                                             joint with metal on
                            percutaneous endoscopic                                      polyethylene synthetic
                            approach.                                                    substitute, uncemented,
                                                                                         open approach.
0SP948Z..................  Removal of spacer from      and   0SR902Z..................  Replacement of right hip
                            right hip joint,                                             joint with metal on
                            percutaneous endoscopic                                      polyethylene synthetic
                            approach.                                                    substitute, open
                                                                                         approach.
0SP948Z..................  Removal of spacer from      and   0SR9039..................  Replacement of right hip
                            right hip joint,                                             joint with ceramic
                            percutaneous endoscopic                                      synthetic substitute,
                            approach.                                                    cemented, open
                                                                                         approach.
0SP948Z..................  Removal of spacer from      and   0SR903A..................  Replacement of right hip
                            right hip joint,                                             joint with ceramic
                            percutaneous endoscopic                                      synthetic substitute,
                            approach.                                                    uncemented, open
                                                                                         approach.
0SP948Z..................  Removal of spacer from      and   0SR903Z..................  Replacement of right hip
                            right hip joint,                                             joint with ceramic
                            percutaneous endoscopic                                      synthetic substitute,
                            approach.                                                    open approach.
0SP948Z..................  Removal of spacer from      and   0SR9049..................  Replacement of right hip
                            right hip joint,                                             joint with ceramic on
                            percutaneous endoscopic                                      polyethylene synthetic
                            approach.                                                    substitute, cemented,
                                                                                         open approach.
0SP948Z..................  Removal of spacer from      and   0SR904A..................  Replacement of right hip
                            right hip joint,                                             joint with ceramic on
                            percutaneous endoscopic                                      polyethylene synthetic
                            approach.                                                    substitute, uncemented,
                                                                                         open approach.
0SP948Z..................  Removal of spacer from      and   0SR904Z..................  Replacement of right hip
                            right hip joint,                                             joint with ceramic on
                            percutaneous endoscopic                                      polyethylene synthetic
                            approach.                                                    substitute, open
                                                                                         approach.
0SP948Z..................  Removal of spacer from      and   0SR90J9..................  Replacement of right hip
                            right hip joint,                                             joint with synthetic
                            percutaneous endoscopic                                      substitute, cemented,
                            approach.                                                    open approach.
0SP948Z..................  Removal of spacer from      and   0SR90JA..................  Replacement of right hip
                            right hip joint,                                             joint with synthetic
                            percutaneous endoscopic                                      substitute, uncemented,
                            approach.                                                    open approach.
0SP948Z..................  Removal of spacer from      and   0SR90JZ..................  Replacement of right hip
                            right hip joint,                                             joint with synthetic
                            percutaneous endoscopic                                      substitute, open
                            approach.                                                    approach.
0SP948Z..................  Removal of spacer from      and   0SRA009..................  Replacement of right hip
                            right hip joint,                                             joint, acetabular
                            percutaneous endoscopic                                      surface with
                            approach.                                                    polyethylene synthetic
                                                                                         substitute, cemented,
                                                                                         open approach.
0SP948Z..................  Removal of spacer from      and   0SRA00A..................  Replacement of right hip
                            right hip joint,                                             joint, acetabular
                            percutaneous endoscopic                                      surface with
                            approach.                                                    polyethylene synthetic
                                                                                         substitute, uncemented,
                                                                                         open approach.
0SP948Z..................  Removal of spacer from      and   0SRA00Z..................  Replacement of right hip
                            right hip joint,                                             joint, acetabular
                            percutaneous endoscopic                                      surface with
                            approach.                                                    polyethylene synthetic
                                                                                         substitute, open
                                                                                         approach.
0SP948Z..................  Removal of spacer from      and   0SRA019..................  Replacement of right hip
                            right hip joint,                                             joint, acetabular
                            percutaneous endoscopic                                      surface with metal
                            approach.                                                    synthetic substitute,
                                                                                         cemented, open
                                                                                         approach.
0SP948Z..................  Removal of spacer from      and   0SRA01A..................  Replacement of right hip
                            right hip joint,                                             joint, acetabular
                            percutaneous endoscopic                                      surface with metal
                            approach.                                                    synthetic substitute,
                                                                                         uncemented, open
                                                                                         approach.
0SP948Z..................  Removal of spacer from      and   0SRA01Z..................  Replacement of right hip
                            right hip joint,                                             joint, acetabular
                            percutaneous endoscopic                                      surface with metal
                            approach.                                                    synthetic substitute,
                                                                                         open approach.
0SP948Z..................  Removal of spacer from      and   0SRA039..................  Replacement of right hip
                            right hip joint,                                             joint, acetabular
                            percutaneous endoscopic                                      surface with ceramic
                            approach.                                                    synthetic substitute,
                                                                                         cemented, open
                                                                                         approach.

[[Page 49396]]

 
0SP948Z..................  Removal of spacer from      and   0SRA03A..................  Replacement of right hip
                            right hip joint,                                             joint, acetabular
                            percutaneous endoscopic                                      surface with ceramic
                            approach.                                                    synthetic substitute,
                                                                                         uncemented, open
                                                                                         approach.
0SP948Z..................  Removal of spacer from      and   0SRA03Z..................  Replacement of right hip
                            right hip joint,                                             joint, acetabular
                            percutaneous endoscopic                                      surface with ceramic
                            approach.                                                    synthetic substitute,
                                                                                         open approach.
0SP948Z..................  Removal of spacer from      and   0SRA0J9..................  Replacement of right hip
                            right hip joint,                                             joint, acetabular
                            percutaneous endoscopic                                      surface with synthetic
                            approach.                                                    substitute, cemented,
                                                                                         open approach.
0SP948Z..................  Removal of spacer from      and   0SRA0JA..................  Replacement of right hip
                            right hip joint,                                             joint, acetabular
                            percutaneous endoscopic                                      surface with synthetic
                            approach.                                                    substitute, uncemented,
                                                                                         open approach.
0SP948Z..................  Removal of spacer from      and   0SRA0JZ..................  Replacement of right hip
                            right hip joint,                                             joint, acetabular
                            percutaneous endoscopic                                      surface with synthetic
                            approach.                                                    substitute, open
                                                                                         approach.
0SP948Z..................  Removal of spacer from      and   0SRR019..................  Replacement of right hip
                            right hip joint,                                             joint, femoral surface
                            percutaneous endoscopic                                      with metal synthetic
                            approach.                                                    substitute, cemented,
                                                                                         open approach.
0SP948Z..................  Removal of spacer from      and   0SRR01A..................  Replacement of right hip
                            right hip joint,                                             joint, femoral surface
                            percutaneous endoscopic                                      with metal synthetic
                            approach.                                                    substitute, uncemented,
                                                                                         open approach.
0SP948Z..................  Removal of spacer from      and   0SRR01Z..................  Replacement of right hip
                            right hip joint,                                             joint, femoral surface
                            percutaneous endoscopic                                      with metal synthetic
                            approach.                                                    substitute, open
                                                                                         approach.
0SP948Z..................  Removal of spacer from      and   0SRR039..................  Replacement of right hip
                            right hip joint,                                             joint, femoral surface
                            percutaneous endoscopic                                      with ceramic synthetic
                            approach.                                                    substitute, cemented,
                                                                                         open approach.
0SP948Z..................  Removal of spacer from      and   0SRR03A..................  Replacement of right hip
                            right hip joint,                                             joint, femoral surface
                            percutaneous endoscopic                                      with ceramic synthetic
                            approach.                                                    substitute, uncemented,
                                                                                         open approach.
0SP948Z..................  Removal of spacer from      and   0SRR03Z..................  Replacement of right hip
                            right hip joint,                                             joint, femoral surface
                            percutaneous endoscopic                                      with ceramic synthetic
                            approach.                                                    substitute, open
                                                                                         approach.
0SP948Z..................  Removal of spacer from      and   0SRR0J9..................  Replacement of right hip
                            right hip joint,                                             joint, femoral surface
                            percutaneous endoscopic                                      with synthetic
                            approach.                                                    substitute, cemented,
                                                                                         open approach.
0SP948Z..................  Removal of spacer from      and   0SRR0JA..................  Replacement of right hip
                            right hip joint,                                             joint, femoral surface
                            percutaneous endoscopic                                      with synthetic
                            approach.                                                    substitute, uncemented,
                                                                                         open approach.
0SP948Z..................  Removal of spacer from      and   0SRR0JZ..................  Replacement of right hip
                            right hip joint,                                             joint, femoral surface
                            percutaneous endoscopic                                      with synthetic
                            approach.                                                    substitute, open
                                                                                         approach.
0SP948Z..................  Removal of spacer from      and   0SU909Z..................  Supplement right hip
                            right hip joint,                                             joint with liner, open
                            percutaneous endoscopic                                      approach.
                            approach.
0SP948Z..................  Removal of spacer from      and   0SUA09Z..................  Supplement right hip
                            right hip joint,                                             joint, acetabular
                            percutaneous endoscopic                                      surface with liner,
                            approach.                                                    open approach.
0SP948Z..................  Removal of spacer from      and   0SUR09Z..................  Supplement right hip
                            right hip joint,                                             joint, femoral surface
                            percutaneous endoscopic                                      with liner, open
                            approach.                                                    approach.
0SP94JZ..................  Removal of synthetic        and   0SR9019..................  Replacement of right hip
                            substitute from right                                        joint with metal
                            hip joint, percutaneous                                      synthetic substitute,
                            endoscopic approach.                                         cemented, open
                                                                                         approach.
0SP94JZ..................  Removal of synthetic        and   0SR901A..................  Replacement of right hip
                            substitute from right                                        joint with metal
                            hip joint, percutaneous                                      synthetic substitute,
                            endoscopic approach.                                         uncemented, open
                                                                                         approach.
0SP94JZ..................  Removal of synthetic        and   0SR901Z..................  Replacement of right hip
                            substitute from right                                        joint with metal
                            hip joint, percutaneous                                      synthetic substitute,
                            endoscopic approach.                                         open approach.
0SP94JZ..................  Removal of synthetic        and   0SR9029..................  Replacement of right hip
                            substitute from right                                        joint with metal on
                            hip joint, percutaneous                                      polyethylene synthetic
                            endoscopic approach.                                         substitute, cemented,
                                                                                         open approach.
0SP94JZ..................  Removal of synthetic        and   0SR902A..................  Replacement of right hip
                            substitute from right                                        joint with metal on
                            hip joint, percutaneous                                      polyethylene synthetic
                            endoscopic approach.                                         substitute, uncemented,
                                                                                         open approach.
0SP94JZ..................  Removal of synthetic        and   0SR902Z..................  Replacement of right hip
                            substitute from right                                        joint with metal on
                            hip joint, percutaneous                                      polyethylene synthetic
                            endoscopic approach.                                         substitute, open
                                                                                         approach.
0SP94JZ..................  Removal of synthetic        and   0SR9039..................  Replacement of right hip
                            substitute from right                                        joint with ceramic
                            hip joint, percutaneous                                      synthetic substitute,
                            endoscopic approach.                                         cemented, open
                                                                                         approach.
0SP94JZ..................  Removal of synthetic        and   0SR903A..................  Replacement of right hip
                            substitute from right                                        joint with ceramic
                            hip joint, percutaneous                                      synthetic substitute,
                            endoscopic approach.                                         uncemented, open
                                                                                         approach.
0SP94JZ..................  Removal of synthetic        and   0SR903Z..................  Replacement of right hip
                            substitute from right                                        joint with ceramic
                            hip joint, percutaneous                                      synthetic substitute,
                            endoscopic approach.                                         open approach.
0SP94JZ..................  Removal of synthetic        and   0SR9049..................  Replacement of right hip
                            substitute from right                                        joint with ceramic on
                            hip joint, percutaneous                                      polyethylene synthetic
                            endoscopic approach.                                         substitute, cemented,
                                                                                         open approach.
0SP94JZ..................  Removal of synthetic        and   0SR904A..................  Replacement of right hip
                            substitute from right                                        joint with ceramic on
                            hip joint, percutaneous                                      polyethylene synthetic
                            endoscopic approach.                                         substitute, uncemented,
                                                                                         open approach.

[[Page 49397]]

 
0SP94JZ..................  Removal of synthetic        and   0SR904Z..................  Replacement of right hip
                            substitute from right                                        joint with ceramic on
                            hip joint, percutaneous                                      polyethylene synthetic
                            endoscopic approach.                                         substitute, open
                                                                                         approach.
0SP94JZ..................  Removal of synthetic        and   0SR90J9..................  Replacement of right hip
                            substitute from right                                        joint with synthetic
                            hip joint, percutaneous                                      substitute, cemented,
                            endoscopic approach.                                         open approach.
0SP94JZ..................  Removal of synthetic        and   0SR90JA..................  Replacement of right hip
                            substitute from right                                        joint with synthetic
                            hip joint, percutaneous                                      substitute, uncemented,
                            endoscopic approach.                                         open approach.
0SP94JZ..................  Removal of synthetic        and   0SR90JZ..................  Replacement of right hip
                            substitute from right                                        joint with synthetic
                            hip joint, percutaneous                                      substitute, open
                            endoscopic approach.                                         approach.
0SP94JZ..................  Removal of synthetic        and   0SRA009..................  Replacement of right hip
                            substitute from right                                        joint, acetabular
                            hip joint, percutaneous                                      surface with
                            endoscopic approach.                                         polyethylene synthetic
                                                                                         substitute, cemented,
                                                                                         open approach.
0SP94JZ..................  Removal of synthetic        and   0SRA00A..................  Replacement of right hip
                            substitute from right                                        joint, acetabular
                            hip joint, percutaneous                                      surface with
                            endoscopic approach.                                         polyethylene synthetic
                                                                                         substitute, uncemented,
                                                                                         open approach.
0SP94JZ..................  Removal of synthetic        and   0SRA00Z..................  Replacement of right hip
                            substitute from right                                        joint, acetabular
                            hip joint, percutaneous                                      surface with
                            endoscopic approach.                                         polyethylene synthetic
                                                                                         substitute, open
                                                                                         approach.
0SP94JZ..................  Removal of synthetic        and   0SRA019..................  Replacement of right hip
                            substitute from right                                        joint, acetabular
                            hip joint, percutaneous                                      surface with metal
                            endoscopic approach.                                         synthetic substitute,
                                                                                         cemented, open
                                                                                         approach.
0SP94JZ..................  Removal of synthetic        and   0SRA01A..................  Replacement of right hip
                            substitute from right                                        joint, acetabular
                            hip joint, percutaneous                                      surface with metal
                            endoscopic approach.                                         synthetic substitute,
                                                                                         uncemented, open
                                                                                         approach.
0SP94JZ..................  Removal of synthetic        and   0SRA01Z..................  Replacement of right hip
                            substitute from right                                        joint, acetabular
                            hip joint, percutaneous                                      surface with metal
                            endoscopic approach.                                         synthetic substitute,
                                                                                         open approach.
0SP94JZ..................  Removal of synthetic        and   0SRA039..................  Replacement of right hip
                            substitute from right                                        joint, acetabular
                            hip joint, percutaneous                                      surface with ceramic
                            endoscopic approach.                                         synthetic substitute,
                                                                                         cemented, open
                                                                                         approach.
0SP94JZ..................  Removal of synthetic        and   0SRA03A..................  Replacement of right hip
                            substitute from right                                        joint, acetabular
                            hip joint, percutaneous                                      surface with ceramic
                            endoscopic approach.                                         synthetic substitute,
                                                                                         uncemented, open
                                                                                         approach.
0SP94JZ..................  Removal of synthetic        and   0SRA03Z..................  Replacement of right hip
                            substitute from right                                        joint, acetabular
                            hip joint, percutaneous                                      surface with ceramic
                            endoscopic approach.                                         synthetic substitute,
                                                                                         open approach.
0SP94JZ..................  Removal of synthetic        and   0SRA0J9..................  Replacement of right hip
                            substitute from right                                        joint, acetabular
                            hip joint, percutaneous                                      surface with synthetic
                            endoscopic approach.                                         substitute, cemented,
                                                                                         open approach.
0SP94JZ..................  Removal of synthetic        and   0SRA0JA..................  Replacement of right hip
                            substitute from right                                        joint, acetabular
                            hip joint, percutaneous                                      surface with synthetic
                            endoscopic approach.                                         substitute, uncemented,
                                                                                         open approach.
0SP94JZ..................  Removal of synthetic        and   0SRA0JZ..................  Replacement of right hip
                            substitute from right                                        joint, acetabular
                            hip joint, percutaneous                                      surface with synthetic
                            endoscopic approach.                                         substitute, open
                                                                                         approach.
0SP94JZ..................  Removal of synthetic        and   0SRR019..................  Replacement of right hip
                            substitute from right                                        joint, femoral surface
                            hip joint, percutaneous                                      with metal synthetic
                            endoscopic approach.                                         substitute, cemented,
                                                                                         open approach.
0SP94JZ..................  Removal of synthetic        and   0SRR01A..................  Replacement of right hip
                            substitute from right                                        joint, femoral surface
                            hip joint, percutaneous                                      with metal synthetic
                            endoscopic approach.                                         substitute, uncemented,
                                                                                         open approach.
0SP94JZ..................  Removal of synthetic        and   0SRR01Z..................  Replacement of right hip
                            substitute from right                                        joint, femoral surface
                            hip joint, percutaneous                                      with metal synthetic
                            endoscopic approach.                                         substitute, open
                                                                                         approach.
0SP94JZ..................  Removal of synthetic        and   0SRR039..................  Replacement of right hip
                            substitute from right                                        joint, femoral surface
                            hip joint, percutaneous                                      with ceramic synthetic
                            endoscopic approach.                                         substitute, cemented,
                                                                                         open approach.
0SP94JZ..................  Removal of synthetic        and   0SRR03A..................  Replacement of right hip
                            substitute from right                                        joint, femoral surface
                            hip joint, percutaneous                                      with ceramic synthetic
                            endoscopic approach.                                         substitute, uncemented,
                                                                                         open approach.
0SP94JZ..................  Removal of synthetic        and   0SRR03Z..................  Replacement of right hip
                            substitute from right                                        joint, femoral surface
                            hip joint, percutaneous                                      with ceramic synthetic
                            endoscopic approach.                                         substitute, open
                                                                                         approach.
0SP94JZ..................  Removal of synthetic        and   0SRR0J9..................  Replacement of right hip
                            substitute from right                                        joint, femoral surface
                            hip joint, percutaneous                                      with synthetic
                            endoscopic approach.                                         substitute, cemented,
                                                                                         open approach.
0SP94JZ..................  Removal of synthetic        and   0SRR0JA..................  Replacement of right hip
                            substitute from right                                        joint, femoral surface
                            hip joint, percutaneous                                      with synthetic
                            endoscopic approach.                                         substitute, uncemented,
                                                                                         open approach.
0SP94JZ..................  Removal of synthetic        and   0SRR0JZ..................  Replacement of right hip
                            substitute from right                                        joint, femoral surface
                            hip joint, percutaneous                                      with synthetic
                            endoscopic approach.                                         substitute, open
                                                                                         approach.
0SP94JZ..................  Removal of synthetic        and   0SU909Z..................  Supplement right hip
                            substitute from right                                        joint with liner, open
                            hip joint, percutaneous                                      approach.
                            endoscopic approach.
0SP94JZ..................  Removal of synthetic        and   0SUA09Z..................  Supplement right hip
                            substitute from right                                        joint, acetabular
                            hip joint, percutaneous                                      surface with liner,
                            endoscopic approach.                                         open approach.

[[Page 49398]]

 
0SP94JZ..................  Removal of synthetic        and   0SUR09Z..................  Supplement right hip
                            substitute from right                                        joint, femoral surface
                            hip joint, percutaneous                                      with liner, open
                            endoscopic approach.                                         approach.
0SPB08Z..................  Removal of spacer from      and   0SRB019..................  Replacement of left hip
                            left hip joint, open                                         joint with metal
                            approach.                                                    synthetic substitute,
                                                                                         cemented, open
                                                                                         approach.
0SPB08Z..................  Removal of spacer from      and   0SRB01A..................  Replacement of left hip
                            left hip joint, open                                         joint with metal
                            approach.                                                    synthetic substitute,
                                                                                         uncemented, open
                                                                                         approach.
0SPB08Z..................  Removal of spacer from      and   0SRB01Z..................  Replacement of left hip
                            left hip joint, open                                         joint with metal
                            approach.                                                    synthetic substitute,
                                                                                         open approach.
0SPB08Z..................  Removal of spacer from      and   0SRB029..................  Replacement of left hip
                            left hip joint, open                                         joint with metal on
                            approach.                                                    polyethylene synthetic
                                                                                         substitute, cemented,
                                                                                         open approach.
0SPB08Z..................  Removal of spacer from      and   0SRB02A..................  Replacement of left hip
                            left hip joint, open                                         joint with metal on
                            approach.                                                    polyethylene synthetic
                                                                                         substitute, uncemented,
                                                                                         open approach.
0SPB08Z..................  Removal of spacer from      and   0SRB02Z..................  Replacement of left hip
                            left hip joint, open                                         joint with metal on
                            approach.                                                    polyethylene synthetic
                                                                                         substitute, open
                                                                                         approach.
0SPB08Z..................  Removal of spacer from      and   0SRB039..................  Replacement of left hip
                            left hip joint, open                                         joint with ceramic
                            approach.                                                    synthetic substitute,
                                                                                         cemented, open
                                                                                         approach.
0SPB08Z..................  Removal of spacer from      and   0SRB03A..................  Replacement of left hip
                            left hip joint, open                                         joint with ceramic
                            approach.                                                    synthetic substitute,
                                                                                         uncemented, open
                                                                                         approach.
0SPB08Z..................  Removal of spacer from      and   0SRB03Z..................  Replacement of left hip
                            left hip joint, open                                         joint with ceramic
                            approach.                                                    synthetic substitute,
                                                                                         open approach.
0SPB08Z..................  Removal of spacer from      and   0SRB049..................  Replacement of left hip
                            left hip joint, open                                         joint with ceramic on
                            approach.                                                    polyethylene synthetic
                                                                                         substitute, cemented,
                                                                                         open approach.
0SPB08Z..................  Removal of spacer from      and   0SRB04A..................  Replacement of left hip
                            left hip joint, open                                         joint with ceramic on
                            approach.                                                    polyethylene synthetic
                                                                                         substitute, uncemented,
                                                                                         open approach.
0SPB08Z..................  Removal of spacer from      and   0SRB04Z..................  Replacement of left hip
                            left hip joint, open                                         joint with ceramic on
                            approach.                                                    polyethylene synthetic
                                                                                         substitute, open
                                                                                         approach.
0SPB08Z..................  Removal of spacer from      and   0SRB0J9..................  Replacement of left hip
                            left hip joint, open                                         joint with synthetic
                            approach.                                                    substitute, cemented,
                                                                                         open approach.
0SPB08Z..................  Removal of spacer from      and   0SRB0JA..................  Replacement of left hip
                            left hip joint, open                                         joint with synthetic
                            approach.                                                    substitute, uncemented,
                                                                                         open approach.
0SPB08Z..................  Removal of spacer from      and   0SRB0JZ..................  Replacement of left hip
                            left hip joint, open                                         joint with synthetic
                            approach.                                                    substitute, open
                                                                                         approach.
0SPB08Z..................  Removal of spacer from      and   0SRE009..................  Replacement of left hip
                            left hip joint, open                                         joint, acetabular
                            approach.                                                    surface with
                                                                                         polyethylene synthetic
                                                                                         substitute, cemented,
                                                                                         open approach.
0SPB08Z..................  Removal of spacer from      and   0SRE00A..................  Replacement of left hip
                            left hip joint, open                                         joint, acetabular
                            approach.                                                    surface with
                                                                                         polyethylene synthetic
                                                                                         substitute, uncemented,
                                                                                         open approach.
0SPB08Z..................  Removal of spacer from      and   0SRE00Z..................  Replacement of left hip
                            left hip joint, open                                         joint, acetabular
                            approach.                                                    surface with
                                                                                         polyethylene synthetic
                                                                                         substitute, open
                                                                                         approach.
0SPB08Z..................  Removal of spacer from      and   0SRE019..................  Replacement of left hip
                            left hip joint, open                                         joint, acetabular
                            approach.                                                    surface with metal
                                                                                         synthetic substitute,
                                                                                         cemented, open
                                                                                         approach.
0SPB08Z..................  Removal of spacer from      and   0SRE01A..................  Replacement of left hip
                            left hip joint, open                                         joint, acetabular
                            approach.                                                    surface with metal
                                                                                         synthetic substitute,
                                                                                         uncemented, open
                                                                                         approach.
0SPB08Z..................  Removal of spacer from      and   0SRE01Z..................  Replacement of left hip
                            left hip joint, open                                         joint, acetabular
                            approach.                                                    surface with metal
                                                                                         synthetic substitute,
                                                                                         open approach.
0SPB08Z..................  Removal of spacer from      and   0SRE039..................  Replacement of left hip
                            left hip joint, open                                         joint, acetabular
                            approach.                                                    surface with ceramic
                                                                                         synthetic substitute,
                                                                                         cemented, open
                                                                                         approach.
0SPB08Z..................  Removal of spacer from      and   0SRE03A..................  Replacement of left hip
                            left hip joint, open                                         joint, acetabular
                            approach.                                                    surface with ceramic
                                                                                         synthetic substitute,
                                                                                         uncemented, open
                                                                                         approach.
0SPB08Z..................  Removal of spacer from      and   0SRE03Z..................  Replacement of left hip
                            left hip joint, open                                         joint, acetabular
                            approach.                                                    surface with ceramic
                                                                                         synthetic substitute,
                                                                                         open approach.
0SPB08Z..................  Removal of spacer from      and   0SRE0J9..................  Replacement of left hip
                            left hip joint, open                                         joint, acetabular
                            approach.                                                    surface with synthetic
                                                                                         substitute, cemented,
                                                                                         open approach.
0SPB08Z..................  Removal of spacer from      and   0SRE0JA..................  Replacement of left hip
                            left hip joint, open                                         joint, acetabular
                            approach.                                                    surface with synthetic
                                                                                         substitute, uncemented,
                                                                                         open approach.
0SPB08Z..................  Removal of spacer from      and   0SRE0JZ..................  Replacement of left hip
                            left hip joint, open                                         joint, acetabular
                            approach.                                                    surface with synthetic
                                                                                         substitute, open
                                                                                         approach.

[[Page 49399]]

 
0SPB08Z..................  Removal of spacer from      and   0SRS019..................  Replacement of left hip
                            left hip joint, open                                         joint, femoral surface
                            approach.                                                    with metal synthetic
                                                                                         substitute, cemented,
                                                                                         open approach.
0SPB08Z..................  Removal of spacer from      and   0SRS01A..................  Replacement of left hip
                            left hip joint, open                                         joint, femoral surface
                            approach.                                                    with metal synthetic
                                                                                         substitute, uncemented,
                                                                                         open approach.
0SPB08Z..................  Removal of spacer from      and   0SRS01Z..................  Replacement of left hip
                            left hip joint, open                                         joint, femoral surface
                            approach.                                                    with metal synthetic
                                                                                         substitute, open
                                                                                         approach.
0SPB08Z..................  Removal of spacer from      and   0SRS039..................  Replacement of left hip
                            left hip joint, open                                         joint, femoral surface
                            approach.                                                    with ceramic synthetic
                                                                                         substitute, cemented,
                                                                                         open approach.
0SPB08Z..................  Removal of spacer from      and   0SRS03A..................  Replacement of left hip
                            left hip joint, open                                         joint, femoral surface
                            approach.                                                    with ceramic synthetic
                                                                                         substitute, uncemented,
                                                                                         open approach.
0SPB08Z..................  Removal of spacer from      and   0SRS03Z..................  Replacement of left hip
                            left hip joint, open                                         joint, femoral surface
                            approach.                                                    with ceramic synthetic
                                                                                         substitute, open
                                                                                         approach.
0SPB08Z..................  Removal of spacer from      and   0SRS0J9..................  Replacement of left hip
                            left hip joint, open                                         joint, femoral surface
                            approach.                                                    with synthetic
                                                                                         substitute, cemented,
                                                                                         open approach.
0SPB08Z..................  Removal of spacer from      and   0SRS0JA..................  Replacement of left hip
                            left hip joint, open                                         joint, femoral surface
                            approach.                                                    with synthetic
                                                                                         substitute, uncemented,
                                                                                         open approach.
0SPB08Z..................  Removal of spacer from      and   0SRS0JZ..................  Replacement of left hip
                            left hip joint, open                                         joint, femoral surface
                            approach.                                                    with synthetic
                                                                                         substitute, open
                                                                                         approach.
0SPB08Z..................  Removal of spacer from      and   0SUB09Z..................  Supplement left hip
                            left hip joint, open                                         joint with liner, open
                            approach.                                                    approach.
0SPB08Z..................  Removal of spacer from      and   0SUE09Z..................  Supplement left hip
                            left hip joint, open                                         joint, acetabular
                            approach.                                                    surface with liner,
                                                                                         open approach.
0SPB08Z..................  Removal of spacer from      and   0SUS09Z..................  Supplement left hip
                            left hip joint, open                                         joint, femoral surface
                            approach.                                                    with liner, open
                                                                                         approach.
0SPB09Z..................  Removal of liner from       and   0SRB019..................  Replacement of left hip
                            left hip joint, open                                         joint with metal
                            approach.                                                    synthetic substitute,
                                                                                         cemented, open
                                                                                         approach.
0SPB09Z..................  Removal of liner from       and   0SRB01A..................  Replacement of left hip
                            left hip joint, open                                         joint with metal
                            approach.                                                    synthetic substitute,
                                                                                         uncemented, open
                                                                                         approach.
0SPB09Z..................  Removal of liner from       and   0SRB01Z..................  Replacement of left hip
                            left hip joint, open                                         joint with metal
                            approach.                                                    synthetic substitute,
                                                                                         open approach.
0SPB09Z..................  Removal of liner from       and   0SRB029..................  Replacement of left hip
                            left hip joint, open                                         joint with metal on
                            approach.                                                    polyethylene synthetic
                                                                                         substitute, cemented,
                                                                                         open approach.
0SPB09Z..................  Removal of liner from       and   0SRB02A..................  Replacement of left hip
                            left hip joint, open                                         joint with metal on
                            approach.                                                    polyethylene synthetic
                                                                                         substitute, uncemented,
                                                                                         open approach.
0SPB09Z..................  Removal of liner from       and   0SRB02Z..................  Replacement of left hip
                            left hip joint, open                                         joint with metal on
                            approach.                                                    polyethylene synthetic
                                                                                         substitute, open
                                                                                         approach.
0SPB09Z..................  Removal of liner from       and   0SRB039..................  Replacement of left hip
                            left hip joint, open                                         joint with ceramic
                            approach.                                                    synthetic substitute,
                                                                                         cemented, open
                                                                                         approach.
0SPB09Z..................  Removal of liner from       and   0SRB03A..................  Replacement of left hip
                            left hip joint, open                                         joint with ceramic
                            approach.                                                    synthetic substitute,
                                                                                         uncemented, open
                                                                                         approach.
0SPB09Z..................  Removal of liner from       and   0SRB03Z..................  Replacement of left hip
                            left hip joint, open                                         joint with ceramic
                            approach.                                                    synthetic substitute,
                                                                                         open approach.
0SPB09Z..................  Removal of liner from       and   0SRB049..................  Replacement of left hip
                            left hip joint, open                                         joint with ceramic on
                            approach.                                                    polyethylene synthetic
                                                                                         substitute, cemented,
                                                                                         open approach.
0SPB09Z..................  Removal of liner from       and   0SRB04A..................  Replacement of left hip
                            left hip joint, open                                         joint with ceramic on
                            approach.                                                    polyethylene synthetic
                                                                                         substitute, uncemented,
                                                                                         open approach.
0SPB09Z..................  Removal of liner from       and   0SRB04Z..................  Replacement of left hip
                            left hip joint, open                                         joint with ceramic on
                            approach.                                                    polyethylene synthetic
                                                                                         substitute, open
                                                                                         approach.
0SPB09Z..................  Removal of liner from       and   0SRB0J9..................  Replacement of left hip
                            left hip joint, open                                         joint with synthetic
                            approach.                                                    substitute, cemented,
                                                                                         open approach.
0SPB09Z..................  Removal of liner from       and   0SRB0JA..................  Replacement of left hip
                            left hip joint, open                                         joint with synthetic
                            approach.                                                    substitute, uncemented,
                                                                                         open approach.
0SPB09Z..................  Removal of liner from       and   0SRB0JZ..................  Replacement of left hip
                            left hip joint, open                                         joint with synthetic
                            approach.                                                    substitute, open
                                                                                         approach.
0SPB09Z..................  Removal of liner from       and   0SRE009..................  Replacement of left hip
                            left hip joint, open                                         joint, acetabular
                            approach.                                                    surface with
                                                                                         polyethylene synthetic
                                                                                         substitute, cemented,
                                                                                         open approach.
0SPB09Z..................  Removal of liner from       and   0SRE00A..................  Replacement of left hip
                            left hip joint, open                                         joint, acetabular
                            approach.                                                    surface with
                                                                                         polyethylene synthetic
                                                                                         substitute, uncemented,
                                                                                         open approach.

[[Page 49400]]

 
0SPB09Z..................  Removal of liner from       and   0SRE00Z..................  Replacement of left hip
                            left hip joint, open                                         joint, acetabular
                            approach.                                                    surface with
                                                                                         polyethylene synthetic
                                                                                         substitute, open
                                                                                         approach.
0SPB09Z..................  Removal of liner from       and   0SRE019..................  Replacement of left hip
                            left hip joint, open                                         joint, acetabular
                            approach.                                                    surface with metal
                                                                                         synthetic substitute,
                                                                                         cemented, open
                                                                                         approach.
0SPB09Z..................  Removal of liner from       and   0SRE01A..................  Replacement of left hip
                            left hip joint, open                                         joint, acetabular
                            approach.                                                    surface with metal
                                                                                         synthetic substitute,
                                                                                         uncemented, open
                                                                                         approach.
0SPB09Z..................  Removal of liner from       and   0SRE01Z..................  Replacement of left hip
                            left hip joint, open                                         joint, acetabular
                            approach.                                                    surface with metal
                                                                                         synthetic substitute,
                                                                                         open approach.
0SPB09Z..................  Removal of liner from       and   0SRE039..................  Replacement of left hip
                            left hip joint, open                                         joint, acetabular
                            approach.                                                    surface with ceramic
                                                                                         synthetic substitute,
                                                                                         cemented, open
                                                                                         approach.
0SPB09Z..................  Removal of liner from       and   0SRE03A..................  Replacement of left hip
                            left hip joint, open                                         joint, acetabular
                            approach.                                                    surface with ceramic
                                                                                         synthetic substitute,
                                                                                         uncemented, open
                                                                                         approach.
0SPB09Z..................  Removal of liner from       and   0SRE03Z..................  Replacement of left hip
                            left hip joint, open                                         joint, acetabular
                            approach.                                                    surface with ceramic
                                                                                         synthetic substitute,
                                                                                         open approach.
0SPB09Z..................  Removal of liner from       and   0SRE0J9..................  Replacement of left hip
                            left hip joint, open                                         joint, acetabular
                            approach.                                                    surface with synthetic
                                                                                         substitute, cemented,
                                                                                         open approach.
0SPB09Z..................  Removal of liner from       and   0SRE0JA..................  Replacement of left hip
                            left hip joint, open                                         joint, acetabular
                            approach.                                                    surface with synthetic
                                                                                         substitute, uncemented,
                                                                                         open approach.
0SPB09Z..................  Removal of liner from       and   0SRE0JZ..................  Replacement of left hip
                            left hip joint, open                                         joint, acetabular
                            approach.                                                    surface with synthetic
                                                                                         substitute, open
                                                                                         approach.
0SPB09Z..................  Removal of liner from       and   0SRS019..................  Replacement of left hip
                            left hip joint, open                                         joint, femoral surface
                            approach.                                                    with metal synthetic
                                                                                         substitute, cemented,
                                                                                         open approach.
0SPB09Z..................  Removal of liner from       and   0SRS01A..................  Replacement of left hip
                            left hip joint, open                                         joint, femoral surface
                            approach.                                                    with metal synthetic
                                                                                         substitute, uncemented,
                                                                                         open approach.
0SPB09Z..................  Removal of liner from       and   0SRS01Z..................  Replacement of left hip
                            left hip joint, open                                         joint, femoral surface
                            approach.                                                    with metal synthetic
                                                                                         substitute, open
                                                                                         approach.
0SPB09Z..................  Removal of liner from       and   0SRS039..................  Replacement of left hip
                            left hip joint, open                                         joint, femoral surface
                            approach.                                                    with ceramic synthetic
                                                                                         substitute, cemented,
                                                                                         open approach.
0SPB09Z..................  Removal of liner from       and   0SRS03A..................  Replacement of left hip
                            left hip joint, open                                         joint, femoral surface
                            approach.                                                    with ceramic synthetic
                                                                                         substitute, uncemented,
                                                                                         open approach.
0SPB09Z..................  Removal of liner from       and   0SRS03Z..................  Replacement of left hip
                            left hip joint, open                                         joint, femoral surface
                            approach.                                                    with ceramic synthetic
                                                                                         substitute, open
                                                                                         approach.
0SPB09Z..................  Removal of liner from       and   0SRS0J9..................  Replacement of left hip
                            left hip joint, open                                         joint, femoral surface
                            approach.                                                    with synthetic
                                                                                         substitute, cemented,
                                                                                         open approach.
0SPB09Z..................  Removal of liner from       and   0SRS0JA..................  Replacement of left hip
                            left hip joint, open                                         joint, femoral surface
                            approach.                                                    with synthetic
                                                                                         substitute, uncemented,
                                                                                         open approach.
0SPB09Z..................  Removal of liner from       and   0SRS0JZ..................  Replacement of left hip
                            left hip joint, open                                         joint, femoral surface
                            approach.                                                    with synthetic
                                                                                         substitute, open
                                                                                         approach.
0SPB09Z..................  Removal of liner from       and   0SUB09Z..................  Supplement left hip
                            left hip joint, open                                         joint with liner, open
                            approach.                                                    approach.
0SPB09Z..................  Removal of liner from       and   0SUE09Z..................  Supplement left hip
                            left hip joint, open                                         joint, acetabular
                            approach.                                                    surface with liner,
                                                                                         open approach.
0SPB09Z..................  Removal of liner from       and   0SUS09Z..................  Supplement left hip
                            left hip joint, open                                         joint, femoral surface
                            approach.                                                    with liner, open
                                                                                         approach.
0SPB0BZ..................  Removal of resurfacing      and   0SRB019..................  Replacement of left hip
                            device from left hip                                         joint with metal
                            joint, open approach.                                        synthetic substitute,
                                                                                         cemented, open
                                                                                         approach.
0SPB0BZ..................  Removal of resurfacing      and   0SRB01A..................  Replacement of left hip
                            device from left hip                                         joint with metal
                            joint, open approach.                                        synthetic substitute,
                                                                                         uncemented, open
                                                                                         approach.
0SPB0BZ..................  Removal of resurfacing      and   0SRB01Z..................  Replacement of left hip
                            device from left hip                                         joint with metal
                            joint, open approach.                                        synthetic substitute,
                                                                                         open approach.
0SPB0BZ..................  Removal of resurfacing      and   0SRB029..................  Replacement of left hip
                            device from left hip                                         joint with metal on
                            joint, open approach.                                        polyethylene synthetic
                                                                                         substitute, cemented,
                                                                                         open approach.
0SPB0BZ..................  Removal of resurfacing      and   0SRB02A..................  Replacement of left hip
                            device from left hip                                         joint with metal on
                            joint, open approach.                                        polyethylene synthetic
                                                                                         substitute, uncemented,
                                                                                         open approach.
0SPB0BZ..................  Removal of resurfacing      and   0SRB02Z..................  Replacement of left hip
                            device from left hip                                         joint with metal on
                            joint, open approach.                                        polyethylene synthetic
                                                                                         substitute, open
                                                                                         approach.

[[Page 49401]]

 
0SPB0BZ..................  Removal of resurfacing      and   0SRB039..................  Replacement of left hip
                            device from left hip                                         joint with ceramic
                            joint, open approach.                                        synthetic substitute,
                                                                                         cemented, open
                                                                                         approach.
0SPB0BZ..................  Removal of resurfacing      and   0SRB03A..................  Replacement of left hip
                            device from left hip                                         joint with ceramic
                            joint, open approach.                                        synthetic substitute,
                                                                                         uncemented, open
                                                                                         approach.
0SPB0BZ..................  Removal of resurfacing      and   0SRB03Z..................  Replacement of left hip
                            device from left hip                                         joint with ceramic
                            joint, open approach.                                        synthetic substitute,
                                                                                         open approach.
0SPB0BZ..................  Removal of resurfacing      and   0SRB049..................  Replacement of left hip
                            device from left hip                                         joint with ceramic on
                            joint, open approach.                                        polyethylene synthetic
                                                                                         substitute, cemented,
                                                                                         open approach.
0SPB0BZ..................  Removal of resurfacing      and   0SRB04A..................  Replacement of left hip
                            device from left hip                                         joint with ceramic on
                            joint, open approach.                                        polyethylene synthetic
                                                                                         substitute, uncemented,
                                                                                         open approach.
0SPB0BZ..................  Removal of resurfacing      and   0SRB04Z..................  Replacement of left hip
                            device from left hip                                         joint with ceramic on
                            joint, open approach.                                        polyethylene synthetic
                                                                                         substitute, open
                                                                                         approach.
0SPB0BZ..................  Removal of resurfacing      and   0SRB0J9..................  Replacement of left hip
                            device from left hip                                         joint with synthetic
                            joint, open approach.                                        substitute, cemented,
                                                                                         open approach.
0SPB0BZ..................  Removal of resurfacing      and   0SRB0JA..................  Replacement of left hip
                            device from left hip                                         joint with synthetic
                            joint, open approach.                                        substitute, uncemented,
                                                                                         open approach.
0SPB0BZ..................  Removal of resurfacing      and   0SRB0JZ..................  Replacement of left hip
                            device from left hip                                         joint with synthetic
                            joint, open approach.                                        substitute, open
                                                                                         approach.
0SPB0BZ..................  Removal of resurfacing      and   0SRE009..................  Replacement of left hip
                            device from left hip                                         joint, acetabular
                            joint, open approach.                                        surface with
                                                                                         polyethylene synthetic
                                                                                         substitute, cemented,
                                                                                         open approach.
0SPB0BZ..................  Removal of resurfacing      and   0SRE00A..................  Replacement of left hip
                            device from left hip                                         joint, acetabular
                            joint, open approach.                                        surface with
                                                                                         polyethylene synthetic
                                                                                         substitute, uncemented,
                                                                                         open approach.
0SPB0BZ..................  Removal of resurfacing      and   0SRE00Z..................  Replacement of left hip
                            device from left hip                                         joint, acetabular
                            joint, open approach.                                        surface with
                                                                                         polyethylene synthetic
                                                                                         substitute, open
                                                                                         approach.
0SPB0BZ..................  Removal of resurfacing      and   0SRE019..................  Replacement of left hip
                            device from left hip                                         joint, acetabular
                            joint, open approach.                                        surface with metal
                                                                                         synthetic substitute,
                                                                                         cemented, open
                                                                                         approach.
0SPB0BZ..................  Removal of resurfacing      and   0SRE01A..................  Replacement of left hip
                            device from left hip                                         joint, acetabular
                            joint, open approach.                                        surface with metal
                                                                                         synthetic substitute,
                                                                                         uncemented, open
                                                                                         approach.
0SPB0BZ..................  Removal of resurfacing      and   0SRE01Z..................  Replacement of left hip
                            device from left hip                                         joint, acetabular
                            joint, open approach.                                        surface with metal
                                                                                         synthetic substitute,
                                                                                         open approach.
0SPB0BZ..................  Removal of resurfacing      and   0SRE039..................  Replacement of left hip
                            device from left hip                                         joint, acetabular
                            joint, open approach.                                        surface with ceramic
                                                                                         synthetic substitute,
                                                                                         cemented, open
                                                                                         approach.
0SPB0BZ..................  Removal of resurfacing      and   0SRE03A..................  Replacement of left hip
                            device from left hip                                         joint, acetabular
                            joint, open approach.                                        surface with ceramic
                                                                                         synthetic substitute,
                                                                                         uncemented, open
                                                                                         approach.
0SPB0BZ..................  Removal of resurfacing      and   0SRE03Z..................  Replacement of left hip
                            device from left hip                                         joint, acetabular
                            joint, open approach.                                        surface with ceramic
                                                                                         synthetic substitute,
                                                                                         open approach.
0SPB0BZ..................  Removal of resurfacing      and   0SRE0J9..................  Replacement of left hip
                            device from left hip                                         joint, acetabular
                            joint, open approach.                                        surface with synthetic
                                                                                         substitute, cemented,
                                                                                         open approach.
0SPB0BZ..................  Removal of resurfacing      and   0SRE0JA..................  Replacement of left hip
                            device from left hip                                         joint, acetabular
                            joint, open approach.                                        surface with synthetic
                                                                                         substitute, uncemented,
                                                                                         open approach.
0SPB0BZ..................  Removal of resurfacing      and   0SRE0JZ..................  Replacement of left hip
                            device from left hip                                         joint, acetabular
                            joint, open approach.                                        surface with synthetic
                                                                                         substitute, open
                                                                                         approach.
0SPB0BZ..................  Removal of resurfacing      and   0SRS019..................  Replacement of left hip
                            device from left hip                                         joint, femoral surface
                            joint, open approach.                                        with metal synthetic
                                                                                         substitute, cemented,
                                                                                         open approach.
0SPB0BZ..................  Removal of resurfacing      and   0SRS01A..................  Replacement of left hip
                            device from left hip                                         joint, femoral surface
                            joint, open approach.                                        with metal synthetic
                                                                                         substitute, uncemented,
                                                                                         open approach.
0SPB0BZ..................  Removal of resurfacing      and   0SRS01Z..................  Replacement of left hip
                            device from left hip                                         joint, femoral surface
                            joint, open approach.                                        with metal synthetic
                                                                                         substitute, open
                                                                                         approach.
0SPB0BZ..................  Removal of resurfacing      and   0SRS039..................  Replacement of left hip
                            device from left hip                                         joint, femoral surface
                            joint, open approach.                                        with ceramic synthetic
                                                                                         substitute, cemented,
                                                                                         open approach.
0SPB0BZ..................  Removal of resurfacing      and   0SRS03A..................  Replacement of left hip
                            device from left hip                                         joint, femoral surface
                            joint, open approach.                                        with ceramic synthetic
                                                                                         substitute, uncemented,
                                                                                         open approach.

[[Page 49402]]

 
0SPB0BZ..................  Removal of resurfacing      and   0SRS03Z..................  Replacement of left hip
                            device from left hip                                         joint, femoral surface
                            joint, open approach.                                        with ceramic synthetic
                                                                                         substitute, open
                                                                                         approach.
0SPB0BZ..................  Removal of resurfacing      and   0SRS0J9..................  Replacement of left hip
                            device from left hip                                         joint, femoral surface
                            joint, open approach.                                        with synthetic
                                                                                         substitute, cemented,
                                                                                         open approach.
0SPB0BZ..................  Removal of resurfacing      and   0SRS0JA..................  Replacement of left hip
                            device from left hip                                         joint, femoral surface
                            joint, open approach.                                        with synthetic
                                                                                         substitute, uncemented,
                                                                                         open approach.
0SPB0BZ..................  Removal of resurfacing      and   0SRS0JZ..................  Replacement of left hip
                            device from left hip                                         joint, femoral surface
                            joint, open approach.                                        with synthetic
                                                                                         substitute, open
                                                                                         approach.
0SPB0BZ..................  Removal of resurfacing      and   0SUB09Z..................  Supplement left hip
                            device from left hip                                         joint with liner, open
                            joint, open approach.                                        approach.
0SPB0BZ..................  Removal of resurfacing      and   0SUE09Z..................  Supplement left hip
                            device from left hip                                         joint, acetabular
                            joint, open approach.                                        surface with liner,
                                                                                         open approach.
0SPB0BZ..................  Removal of resurfacing      and   0SUS09Z..................  Supplement left hip
                            device from left hip                                         joint, femoral surface
                            joint, open approach.                                        with liner, open
                                                                                         approach.
0SPB0JZ..................  Removal of synthetic        and   0SRB049..................  Replacement of left hip
                            substitute from left                                         joint with ceramic on
                            hip joint, open                                              polyethylene synthetic
                            approach.                                                    substitute, cemented,
                                                                                         open approach.
0SPB0JZ..................  Removal of synthetic        and   0SRB04A..................  Replacement of left hip
                            substitute from left                                         joint with ceramic on
                            hip joint, open                                              polyethylene synthetic
                            approach.                                                    substitute, uncemented,
                                                                                         open approach.
0SPB0JZ..................  Removal of synthetic        and   0SRB04Z..................  Replacement of left hip
                            substitute from left                                         joint with ceramic on
                            hip joint, open                                              polyethylene synthetic
                            approach.                                                    substitute, open
                                                                                         approach.
0SPB48Z..................  Removal of spacer from      and   0SRB019..................  Replacement of left hip
                            left hip joint,                                              joint with metal
                            percutaneous endoscopic                                      synthetic substitute,
                            approach.                                                    cemented, open
                                                                                         approach.
0SPB48Z..................  Removal of spacer from      and   0SRB01A..................  Replacement of left hip
                            left hip joint,                                              joint with metal
                            percutaneous endoscopic                                      synthetic substitute,
                            approach.                                                    uncemented, open
                                                                                         approach.
0SPB48Z..................  Removal of spacer from      and   0SRB01Z..................  Replacement of left hip
                            left hip joint,                                              joint with metal
                            percutaneous endoscopic                                      synthetic substitute,
                            approach.                                                    open approach.
0SPB48Z..................  Removal of spacer from      and   0SRB029..................  Replacement of left hip
                            left hip joint,                                              joint with metal on
                            percutaneous endoscopic                                      polyethylene synthetic
                            approach.                                                    substitute, cemented,
                                                                                         open approach.
0SPB48Z..................  Removal of spacer from      and   0SRB02A..................  Replacement of left hip
                            left hip joint,                                              joint with metal on
                            percutaneous endoscopic                                      polyethylene synthetic
                            approach.                                                    substitute, uncemented,
                                                                                         open approach.
0SPB48Z..................  Removal of spacer from      and   0SRB02Z..................  Replacement of left hip
                            left hip joint,                                              joint with metal on
                            percutaneous endoscopic                                      polyethylene synthetic
                            approach.                                                    substitute, open
                                                                                         approach.
0SPB48Z..................  Removal of spacer from      and   0SRB039..................  Replacement of left hip
                            left hip joint,                                              joint with ceramic
                            percutaneous endoscopic                                      synthetic substitute,
                            approach.                                                    cemented, open
                                                                                         approach.
0SPB48Z..................  Removal of spacer from      and   0SRB03A..................  Replacement of left hip
                            left hip joint,                                              joint with ceramic
                            percutaneous endoscopic                                      synthetic substitute,
                            approach.                                                    uncemented, open
                                                                                         approach.
0SPB48Z..................  Removal of spacer from      and   0SRB03Z..................  Replacement of left hip
                            left hip joint,                                              joint with ceramic
                            percutaneous endoscopic                                      synthetic substitute,
                            approach.                                                    open approach.
0SPB48Z..................  Removal of spacer from      and   0SRB049..................  Replacement of left hip
                            left hip joint,                                              joint with ceramic on
                            percutaneous endoscopic                                      polyethylene synthetic
                            approach.                                                    substitute, cemented,
                                                                                         open approach.
0SPB48Z..................  Removal of spacer from      and   0SRB04A..................  Replacement of left hip
                            left hip joint,                                              joint with ceramic on
                            percutaneous endoscopic                                      polyethylene synthetic
                            approach.                                                    substitute, uncemented,
                                                                                         open approach.
0SPB48Z..................  Removal of spacer from      and   0SRB04Z..................  Replacement of left hip
                            left hip joint,                                              joint with ceramic on
                            percutaneous endoscopic                                      polyethylene synthetic
                            approach.                                                    substitute, open
                                                                                         approach.
0SPB48Z..................  Removal of spacer from      and   0SRB0J9..................  Replacement of left hip
                            left hip joint,                                              joint with synthetic
                            percutaneous endoscopic                                      substitute, cemented,
                            approach.                                                    open approach.
0SPB48Z..................  Removal of spacer from      and   0SRB0JA..................  Replacement of left hip
                            left hip joint,                                              joint with synthetic
                            percutaneous endoscopic                                      substitute, uncemented,
                            approach.                                                    open approach.
0SPB48Z..................  Removal of spacer from      and   0SRB0JZ..................  Replacement of left hip
                            left hip joint,                                              joint with synthetic
                            percutaneous endoscopic                                      substitute, open
                            approach.                                                    approach.
0SPB48Z..................  Removal of spacer from      and   0SRE009..................  Replacement of left hip
                            left hip joint,                                              joint, acetabular
                            percutaneous endoscopic                                      surface with
                            approach.                                                    polyethylene synthetic
                                                                                         substitute, cemented,
                                                                                         open approach.
0SPB48Z..................  Removal of spacer from      and   0SRE00A..................  Replacement of left hip
                            left hip joint,                                              joint, acetabular
                            percutaneous endoscopic                                      surface with
                            approach.                                                    polyethylene synthetic
                                                                                         substitute, uncemented,
                                                                                         open approach.
0SPB48Z..................  Removal of spacer from      and   0SRE00Z..................  Replacement of left hip
                            left hip joint,                                              joint, acetabular
                            percutaneous endoscopic                                      surface with
                            approach.                                                    polyethylene synthetic
                                                                                         substitute, open
                                                                                         approach.
0SPB48Z..................  Removal of spacer from      and   0SRE019..................  Replacement of left hip
                            left hip joint,                                              joint, acetabular
                            percutaneous endoscopic                                      surface with metal
                            approach.                                                    synthetic substitute,
                                                                                         cemented, open
                                                                                         approach.

[[Page 49403]]

 
0SPB48Z..................  Removal of spacer from      and   0SRE01A..................  Replacement of left hip
                            left hip joint,                                              joint, acetabular
                            percutaneous endoscopic                                      surface with metal
                            approach.                                                    synthetic substitute,
                                                                                         uncemented, open
                                                                                         approach.
0SPB48Z..................  Removal of spacer from      and   0SRE01Z..................  Replacement of left hip
                            left hip joint,                                              joint, acetabular
                            percutaneous endoscopic                                      surface with metal
                            approach.                                                    synthetic substitute,
                                                                                         open approach.
0SPB48Z..................  Removal of spacer from      and   0SRE039..................  Replacement of left hip
                            left hip joint,                                              joint, acetabular
                            percutaneous endoscopic                                      surface with ceramic
                            approach.                                                    synthetic substitute,
                                                                                         cemented, open
                                                                                         approach.
0SPB48Z..................  Removal of spacer from      and   0SRE03A..................  Replacement of left hip
                            left hip joint,                                              joint, acetabular
                            percutaneous endoscopic                                      surface with ceramic
                            approach.                                                    synthetic substitute,
                                                                                         uncemented, open
                                                                                         approach.
0SPB48Z..................  Removal of spacer from      and   0SRE03Z..................  Replacement of left hip
                            left hip joint,                                              joint, acetabular
                            percutaneous endoscopic                                      surface with ceramic
                            approach.                                                    synthetic substitute,
                                                                                         open approach.
0SPB48Z..................  Removal of spacer from      and   0SRE0J9..................  Replacement of left hip
                            left hip joint,                                              joint, acetabular
                            percutaneous endoscopic                                      surface with synthetic
                            approach.                                                    substitute, cemented,
                                                                                         open approach.
0SPB48Z..................  Removal of spacer from      and   0SRE0JA..................  Replacement of left hip
                            left hip joint,                                              joint, acetabular
                            percutaneous endoscopic                                      surface with synthetic
                            approach.                                                    substitute, uncemented,
                                                                                         open approach.
0SPB48Z..................  Removal of spacer from      and   0SRE0JZ..................  Replacement of left hip
                            left hip joint,                                              joint, acetabular
                            percutaneous endoscopic                                      surface with synthetic
                            approach.                                                    substitute, open
                                                                                         approach.
0SPB48Z..................  Removal of spacer from      and   0SRS019..................  Replacement of left hip
                            left hip joint,                                              joint, femoral surface
                            percutaneous endoscopic                                      with metal synthetic
                            approach.                                                    substitute, cemented,
                                                                                         open approach.
0SPB48Z..................  Removal of spacer from      and   0SRS01A..................  Replacement of left hip
                            left hip joint,                                              joint, femoral surface
                            percutaneous endoscopic                                      with metal synthetic
                            approach.                                                    substitute, uncemented,
                                                                                         open approach.
0SPB48Z..................  Removal of spacer from      and   0SRS01Z..................  Replacement of left hip
                            left hip joint,                                              joint, femoral surface
                            percutaneous endoscopic                                      with metal synthetic
                            approach.                                                    substitute, open
                                                                                         approach.
0SPB48Z..................  Removal of spacer from      and   0SRS039..................  Replacement of left hip
                            left hip joint,                                              joint, femoral surface
                            percutaneous endoscopic                                      with ceramic synthetic
                            approach.                                                    substitute, cemented,
                                                                                         open approach.
0SPB48Z..................  Removal of spacer from      and   0SRS03A..................  Replacement of left hip
                            left hip joint,                                              joint, femoral surface
                            percutaneous endoscopic                                      with ceramic synthetic
                            approach.                                                    substitute, uncemented,
                                                                                         open approach.
0SPB48Z..................  Removal of spacer from      and   0SRS03Z..................  Replacement of left hip
                            left hip joint,                                              joint, femoral surface
                            percutaneous endoscopic                                      with ceramic synthetic
                            approach.                                                    substitute, open
                                                                                         approach.
0SPB48Z..................  Removal of spacer from      and   0SRS0J9..................  Replacement of left hip
                            left hip joint,                                              joint, femoral surface
                            percutaneous endoscopic                                      with synthetic
                            approach.                                                    substitute, cemented,
                                                                                         open approach.
0SPB48Z..................  Removal of spacer from      and   0SRS0JA..................  Replacement of left hip
                            left hip joint,                                              joint, femoral surface
                            percutaneous endoscopic                                      with synthetic
                            approach.                                                    substitute, uncemented,
                                                                                         open approach.
0SPB48Z..................  Removal of spacer from      and   0SRS0JZ..................  Replacement of left hip
                            left hip joint,                                              joint, femoral surface
                            percutaneous endoscopic                                      with synthetic
                            approach.                                                    substitute, open
                                                                                         approach.
0SPB48Z..................  Removal of spacer from      and   0SUB09Z..................  Supplement left hip
                            left hip joint,                                              joint with liner, open
                            percutaneous endoscopic                                      approach.
                            approach.
0SPB48Z..................  Removal of spacer from      and   0SUE09Z..................  Supplement left hip
                            left hip joint,                                              joint, acetabular
                            percutaneous endoscopic                                      surface with liner,
                            approach.                                                    open approach.
0SPB48Z..................  Removal of spacer from      and   0SUS09Z..................  Supplement left hip
                            left hip joint,                                              joint, femoral surface
                            percutaneous endoscopic                                      with liner, open
                            approach.                                                    approach.
0SPB4JZ..................  Removal of synthetic        and   0SRB019..................  Replacement of left hip
                            substitute from left                                         joint with metal
                            hip joint, percutaneous                                      synthetic substitute,
                            endoscopic approach.                                         cemented, open
                                                                                         approach.
0SPB4JZ..................  Removal of synthetic        and   0SRB01A..................  Replacement of left hip
                            substitute from left                                         joint with metal
                            hip joint, percutaneous                                      synthetic substitute,
                            endoscopic approach.                                         uncemented, open
                                                                                         approach.
0SPB4JZ..................  Removal of synthetic        and   0SRB01Z..................  Replacement of left hip
                            substitute from left                                         joint with metal
                            hip joint, percutaneous                                      synthetic substitute,
                            endoscopic approach.                                         open approach.
0SPB4JZ..................  Removal of synthetic        and   0SRB029..................  Replacement of left hip
                            substitute from left                                         joint with metal on
                            hip joint, percutaneous                                      polyethylene synthetic
                            endoscopic approach.                                         substitute, cemented,
                                                                                         open approach.
0SPB4JZ..................  Removal of synthetic        and   0SRB02A..................  Replacement of left hip
                            substitute from left                                         joint with metal on
                            hip joint, percutaneous                                      polyethylene synthetic
                            endoscopic approach.                                         substitute, uncemented,
                                                                                         open approach.
0SPB4JZ..................  Removal of synthetic        and   0SRB02Z..................  Replacement of left hip
                            substitute from left                                         joint with metal on
                            hip joint, percutaneous                                      polyethylene synthetic
                            endoscopic approach.                                         substitute, open
                                                                                         approach.
0SPB4JZ..................  Removal of synthetic        and   0SRB039..................  Replacement of left hip
                            substitute from left                                         joint with ceramic
                            hip joint, percutaneous                                      synthetic substitute,
                            endoscopic approach.                                         cemented, open
                                                                                         approach.
0SPB4JZ..................  Removal of synthetic        and   0SRB03A..................  Replacement of left hip
                            substitute from left                                         joint with ceramic
                            hip joint, percutaneous                                      synthetic substitute,
                            endoscopic approach.                                         uncemented, open
                                                                                         approach.

[[Page 49404]]

 
0SPB4JZ..................  Removal of synthetic        and   0SRB03Z..................  Replacement of left hip
                            substitute from left                                         joint with ceramic
                            hip joint, percutaneous                                      synthetic substitute,
                            endoscopic approach.                                         open approach.
0SPB4JZ..................  Removal of synthetic        and   0SRB049..................  Replacement of left hip
                            substitute from left                                         joint with ceramic on
                            hip joint, percutaneous                                      polyethylene synthetic
                            endoscopic approach.                                         substitute, cemented,
                                                                                         open approach.
0SPB4JZ..................  Removal of synthetic        and   0SRB04A..................  Replacement of left hip
                            substitute from left                                         joint with ceramic on
                            hip joint, percutaneous                                      polyethylene synthetic
                            endoscopic approach.                                         substitute, uncemented,
                                                                                         open approach.
0SPB4JZ..................  Removal of synthetic        and   0SRB04Z..................  Replacement of left hip
                            substitute from left                                         joint with ceramic on
                            hip joint, percutaneous                                      polyethylene synthetic
                            endoscopic approach.                                         substitute, open
                                                                                         approach.
0SPB4JZ..................  Removal of synthetic        and   0SRB0J9..................  Replacement of left hip
                            substitute from left                                         joint with synthetic
                            hip joint, percutaneous                                      substitute, cemented,
                            endoscopic approach.                                         open approach.
0SPB4JZ..................  Removal of synthetic        and   0SRB0JA..................  Replacement of left hip
                            substitute from left                                         joint with synthetic
                            hip joint, percutaneous                                      substitute, uncemented,
                            endoscopic approach.                                         open approach.
0SPB4JZ..................  Removal of synthetic        and   0SRB0JZ..................  Replacement of left hip
                            substitute from left                                         joint with synthetic
                            hip joint, percutaneous                                      substitute, open
                            endoscopic approach.                                         approach.
0SPB4JZ..................  Removal of synthetic        and   0SRE009..................  Replacement of left hip
                            substitute from left                                         joint, acetabular
                            hip joint, percutaneous                                      surface with
                            endoscopic approach.                                         polyethylene synthetic
                                                                                         substitute, cemented,
                                                                                         open approach.
0SPB4JZ..................  Removal of synthetic        and   0SRE00A..................  Replacement of left hip
                            substitute from left                                         joint, acetabular
                            hip joint, percutaneous                                      surface with
                            endoscopic approach.                                         polyethylene synthetic
                                                                                         substitute, uncemented,
                                                                                         open approach.
0SPB4JZ..................  Removal of synthetic        and   0SRE00Z..................  Replacement of left hip
                            substitute from left                                         joint, acetabular
                            hip joint, percutaneous                                      surface with
                            endoscopic approach.                                         polyethylene synthetic
                                                                                         substitute, open
                                                                                         approach.
0SPB4JZ..................  Removal of synthetic        and   0SRE019..................  Replacement of left hip
                            substitute from left                                         joint, acetabular
                            hip joint, percutaneous                                      surface with metal
                            endoscopic approach.                                         synthetic substitute,
                                                                                         cemented, open
                                                                                         approach.
0SPB4JZ..................  Removal of synthetic        and   0SRE01A..................  Replacement of left hip
                            substitute from left                                         joint, acetabular
                            hip joint, percutaneous                                      surface with metal
                            endoscopic approach.                                         synthetic substitute,
                                                                                         uncemented, open
                                                                                         approach.
0SPB4JZ..................  Removal of synthetic        and   0SRE01Z..................  Replacement of left hip
                            substitute from left                                         joint, acetabular
                            hip joint, percutaneous                                      surface with metal
                            endoscopic approach.                                         synthetic substitute,
                                                                                         open approach.
0SPB4JZ..................  Removal of synthetic        and   0SRE039..................  Replacement of left hip
                            substitute from left                                         joint, acetabular
                            hip joint, percutaneous                                      surface with ceramic
                            endoscopic approach.                                         synthetic substitute,
                                                                                         cemented, open
                                                                                         approach.
0SPB4JZ..................  Removal of synthetic        and   0SRE03A..................  Replacement of left hip
                            substitute from left                                         joint, acetabular
                            hip joint, percutaneous                                      surface with ceramic
                            endoscopic approach.                                         synthetic substitute,
                                                                                         uncemented, open
                                                                                         approach.
0SPB4JZ..................  Removal of synthetic        and   0SRE03Z..................  Replacement of left hip
                            substitute from left                                         joint, acetabular
                            hip joint, percutaneous                                      surface with ceramic
                            endoscopic approach.                                         synthetic substitute,
                                                                                         open approach.
0SPB4JZ..................  Removal of synthetic        and   0SRE0J9..................  Replacement of left hip
                            substitute from left                                         joint, acetabular
                            hip joint, percutaneous                                      surface with synthetic
                            endoscopic approach.                                         substitute, cemented,
                                                                                         open approach.
0SPB4JZ..................  Removal of synthetic        and   0SRE0JA..................  Replacement of left hip
                            substitute from left                                         joint, acetabular
                            hip joint, percutaneous                                      surface with synthetic
                            endoscopic approach.                                         substitute, uncemented,
                                                                                         open approach.
0SPB4JZ..................  Removal of synthetic        and   0SRE0JZ..................  Replacement of left hip
                            substitute from left                                         joint, acetabular
                            hip joint, percutaneous                                      surface with synthetic
                            endoscopic approach.                                         substitute, open
                                                                                         approach.
0SPB4JZ..................  Removal of synthetic        and   0SRS019..................  Replacement of left hip
                            substitute from left                                         joint, femoral surface
                            hip joint, percutaneous                                      with metal synthetic
                            endoscopic approach.                                         substitute, cemented,
                                                                                         open approach.
0SPB4JZ..................  Removal of synthetic        and   0SRS01A..................  Replacement of left hip
                            substitute from left                                         joint, femoral surface
                            hip joint, percutaneous                                      with metal synthetic
                            endoscopic approach.                                         substitute, uncemented,
                                                                                         open approach.
0SPB4JZ..................  Removal of synthetic        and   0SRS01Z..................  Replacement of left hip
                            substitute from left                                         joint, femoral surface
                            hip joint, percutaneous                                      with metal synthetic
                            endoscopic approach.                                         substitute, open
                                                                                         approach.
0SPB4JZ..................  Removal of synthetic        and   0SRS039..................  Replacement of left hip
                            substitute from left                                         joint, femoral surface
                            hip joint, percutaneous                                      with ceramic synthetic
                            endoscopic approach.                                         substitute, cemented,
                                                                                         open approach.
0SPB4JZ..................  Removal of synthetic        and   0SRS03A..................  Replacement of left hip
                            substitute from left                                         joint, femoral surface
                            hip joint, percutaneous                                      with ceramic synthetic
                            endoscopic approach.                                         substitute, uncemented,
                                                                                         open approach.
0SPB4JZ..................  Removal of synthetic        and   0SRS03Z..................  Replacement of left hip
                            substitute from left                                         joint, femoral surface
                            hip joint, percutaneous                                      with ceramic synthetic
                            endoscopic approach.                                         substitute, open
                                                                                         approach.
0SPB4JZ..................  Removal of synthetic        and   0SRS0J9..................  Replacement of left hip
                            substitute from left                                         joint, femoral surface
                            hip joint, percutaneous                                      with synthetic
                            endoscopic approach.                                         substitute, cemented,
                                                                                         open approach.

[[Page 49405]]

 
0SPB4JZ..................  Removal of synthetic        and   0SRS0JA..................  Replacement of left hip
                            substitute from left                                         joint, femoral surface
                            hip joint, percutaneous                                      with synthetic
                            endoscopic approach.                                         substitute, uncemented,
                                                                                         open approach.
0SPB4JZ..................  Removal of synthetic        and   0SRS0JZ..................  Replacement of left hip
                            substitute from left                                         joint, femoral surface
                            hip joint, percutaneous                                      with synthetic
                            endoscopic approach.                                         substitute, open
                                                                                         approach.
0SPB4JZ..................  Removal of synthetic        and   0SUB09Z..................  Supplement left hip
                            substitute from left                                         joint with liner, open
                            hip joint, percutaneous                                      approach.
                            endoscopic approach.
0SPB4JZ..................  Removal of synthetic        and   0SUE09Z..................  Supplement left hip
                            substitute from left                                         joint, acetabular
                            hip joint, percutaneous                                      surface with liner,
                            endoscopic approach.                                         open approach.
0SPB4JZ..................  Removal of synthetic        and   0SUS09Z..................  Supplement left hip
                            substitute from left                                         joint, femoral surface
                            hip joint, percutaneous                                      with liner, open
                            endoscopic approach.                                         approach.
0SPC09Z..................  Removal of liner from       and   0SRC0J9..................  Replacement of right
                            right knee joint, open                                       knee joint with
                            approach.                                                    synthetic substitute,
                                                                                         cemented, open
                                                                                         approach.
0SPC09Z..................  Removal of liner from       and   0SRC0JA..................  Replacement of right
                            right knee joint, open                                       knee joint with
                            approach.                                                    synthetic substitute,
                                                                                         uncemented, open
                                                                                         approach.
0SPC09Z..................  Removal of liner from       and   0SRC0JZ..................  Replacement of right
                            right knee joint, open                                       knee joint with
                            approach.                                                    synthetic substitute,
                                                                                         open approach.
0SPC09Z..................  Removal of liner from       and   0SRT0J9..................  Replacement of right
                            right knee joint, open                                       knee joint, femoral
                            approach.                                                    surface with synthetic
                                                                                         substitute, cemented,
                                                                                         open approach.
0SPC09Z..................  Removal of liner from       and   0SRT0JA..................  Replacement of right
                            right knee joint, open                                       knee joint, femoral
                            approach.                                                    surface with synthetic
                                                                                         substitute, uncemented,
                                                                                         open approach.
0SPC09Z..................  Removal of liner from       and   0SRT0JZ..................  Replacement of right
                            right knee joint, open                                       knee joint, femoral
                            approach.                                                    surface with synthetic
                                                                                         substitute, open
                                                                                         approach.
0SPC09Z..................  Removal of liner from       and   0SRV0J9..................  Replacement of right
                            right knee joint, open                                       knee joint, tibial
                            approach.                                                    surface with synthetic
                                                                                         substitute, cemented,
                                                                                         open approach.
0SPC09Z..................  Removal of liner from       and   0SRV0JA..................  Replacement of right
                            right knee joint, open                                       knee joint, tibial
                            approach.                                                    surface with synthetic
                                                                                         substitute, uncemented,
                                                                                         open approach.
0SPC09Z..................  Removal of liner from       and   0SRV0JZ..................  Replacement of right
                            right knee joint, open                                       knee joint, tibial
                            approach.                                                    surface with synthetic
                                                                                         substitute, open
                                                                                         approach.
0SPC0JZ..................  Removal of synthetic        and   0SRT0J9..................  Replacement of right
                            substitute from right                                        knee joint, femoral
                            knee joint, open                                             surface with synthetic
                            approach.                                                    substitute, cemented,
                                                                                         open approach.
0SPC0JZ..................  Removal of synthetic        and   0SRT0JA..................  Replacement of right
                            substitute from right                                        knee joint, femoral
                            knee joint, open                                             surface with synthetic
                            approach.                                                    substitute, uncemented,
                                                                                         open approach.
0SPC0JZ..................  Removal of synthetic        and   0SRV0J9..................  Replacement of right
                            substitute from right                                        knee joint, tibial
                            knee joint, open                                             surface with synthetic
                            approach.                                                    substitute, cemented,
                                                                                         open approach.
0SPC0JZ..................  Removal of synthetic        and   0SRV0JA..................  Replacement of right
                            substitute from right                                        knee joint, tibial
                            knee joint, open                                             surface with synthetic
                            approach.                                                    substitute, uncemented,
                                                                                         open approach.
0SPC4JZ..................  Removal of synthetic        and   0SRT0J9..................  Replacement of right
                            substitute from right                                        knee joint, femoral
                            knee joint,                                                  surface with synthetic
                            percutaneous endoscopic                                      substitute, cemented,
                            approach.                                                    open approach.
0SPC4JZ..................  Removal of synthetic        and   0SRT0JA..................  Replacement of right
                            substitute from right                                        knee joint, femoral
                            knee joint,                                                  surface with synthetic
                            percutaneous endoscopic                                      substitute, uncemented,
                            approach.                                                    open approach.
0SPC4JZ..................  Removal of synthetic        and   0SRV0J9..................  Replacement of right
                            substitute from right                                        knee joint, tibial
                            knee joint,                                                  surface with synthetic
                            percutaneous endoscopic                                      substitute, cemented,
                            approach.                                                    open approach.
0SPC4JZ..................  Removal of synthetic        and   0SRV0JA..................  Replacement of right
                            substitute from right                                        knee joint, tibial
                            knee joint,                                                  surface with synthetic
                            percutaneous endoscopic                                      substitute, uncemented,
                            approach.                                                    open approach.
0SPD09Z..................  Removal of liner from       and   0SRD0J9..................  Replacement of left knee
                            left knee joint, open                                        joint with synthetic
                            approach.                                                    substitute, cemented,
                                                                                         open approach.
0SPD09Z..................  Removal of liner from       and   0SRD0JA..................  Replacement of left knee
                            left knee joint, open                                        joint with synthetic
                            approach.                                                    substitute, uncemented,
                                                                                         open approach.
0SPD09Z..................  Removal of liner from       and   0SRD0JZ..................  Replacement of left knee
                            left knee joint, open                                        joint with synthetic
                            approach.                                                    substitute, open
                                                                                         approach.
0SPD09Z..................  Removal of liner from       and   0SRU0J9..................  Replacement of left knee
                            left knee joint, open                                        joint, femoral surface
                            approach.                                                    with synthetic
                                                                                         substitute, cemented,
                                                                                         open approach.
0SPD09Z..................  Removal of liner from       and   0SRU0JA..................  Replacement of left knee
                            left knee joint, open                                        joint, femoral surface
                            approach.                                                    with synthetic
                                                                                         substitute, uncemented,
                                                                                         open approach.
0SPD09Z..................  Removal of liner from       and   0SRU0JZ..................  Replacement of left knee
                            left knee joint, open                                        joint, femoral surface
                            approach.                                                    with synthetic
                                                                                         substitute, open
                                                                                         approach.
0SPD09Z..................  Removal of liner from       and   0SRW0J9..................  Replacement of left knee
                            left knee joint, open                                        joint, tibial surface
                            approach.                                                    with synthetic
                                                                                         substitute, cemented,
                                                                                         open approach.

[[Page 49406]]

 
0SPD09Z..................  Removal of liner from       and   0SRW0JA..................  Replacement of left knee
                            left knee joint, open                                        joint, tibial surface
                            approach.                                                    with synthetic
                                                                                         substitute, uncemented,
                                                                                         open approach.
0SPD09Z..................  Removal of liner from       and   0SRW0JZ..................  Replacement of left knee
                            left knee joint, open                                        joint, tibial surface
                            approach.                                                    with synthetic
                                                                                         substitute, open
                                                                                         approach.
0SPD0JZ..................  Removal of synthetic        and   0SRU0J9..................  Replacement of left knee
                            substitute from left                                         joint, femoral surface
                            knee joint, open                                             with synthetic
                            approach.                                                    substitute, cemented,
                                                                                         open approach.
0SPD0JZ..................  Removal of synthetic        and   0SRU0JA..................  Replacement of left knee
                            substitute from left                                         joint, femoral surface
                            knee joint, open                                             with synthetic
                            approach.                                                    substitute, uncemented,
                                                                                         open approach.
0SPD0JZ..................  Removal of synthetic        and   0SRW0J9..................  Replacement of left knee
                            substitute from left                                         joint, tibial surface
                            knee joint, open                                             with synthetic
                            approach.                                                    substitute, cemented,
                                                                                         open approach.
0SPD0JZ..................  Removal of synthetic        and   0SRW0JA..................  Replacement of left knee
                            substitute from left                                         joint, tibial surface
                            knee joint, open                                             with synthetic
                            approach.                                                    substitute, uncemented,
                                                                                         open approach.
0SPD0JZ..................  Removal of synthetic        and   0SRW0JZ..................  Replacement of left knee
                            substitute from left                                         joint, tibial surface
                            knee joint, open                                             with synthetic
                            approach.                                                    substitute, open
                                                                                         approach.
0SPD4JZ..................  Removal of synthetic        and   0SRU0J9..................  Replacement of left knee
                            substitute from left                                         joint, femoral surface
                            knee joint,                                                  with synthetic
                            percutaneous endoscopic                                      substitute, cemented,
                            approach.                                                    open approach.
0SPD4JZ..................  Removal of synthetic        and   0SRU0JA..................  Replacement of left knee
                            substitute from left                                         joint, femoral surface
                            knee joint,                                                  with synthetic
                            percutaneous endoscopic                                      substitute, uncemented,
                            approach.                                                    open approach.
0SPD4JZ..................  Removal of synthetic        and   0SRW0J9..................  Replacement of left knee
                            substitute from left                                         joint, tibial surface
                            knee joint,                                                  with synthetic
                            percutaneous endoscopic                                      substitute, cemented,
                            approach.                                                    open approach.
0SPD4JZ..................  Removal of synthetic        and   0SRW0JA..................  Replacement of left knee
                            substitute from left                                         joint, tibial surface
                            knee joint,                                                  with synthetic
                            percutaneous endoscopic                                      substitute, uncemented,
                            approach.                                                    open approach.
0SPD4JZ..................  Removal of synthetic        and   0SRW0JZ..................  Replacement of left knee
                            substitute from left                                         joint, tibial surface
                            knee joint,                                                  with synthetic
                            percutaneous endoscopic                                      substitute, open
                            approach.                                                    approach.
----------------------------------------------------------------------------------------------------------------

b. Spinal Fusion
    We received a request to revise the titles of MS-DRGs 456, 457, and 
458 (Spinal Fusion Except Cervical with Spinal Curvature/Malignancy/
Infection or 9+ Fusion with MCC, with CC, and without CC/MCC, 
respectively) for the ICD-10 MS-DRGs so that they more closely 
correspond to the terminology used to describe the ICD-10-PCS procedure 
codes without changing the ICD-10 MS-DRG logic. We agree with the 
requestor that revising the titles of these MS-DRGs would more 
appropriately identify the procedures classified under these groupings. 
Therefore, in the FY 2016 IPPS/LTCH PPS proposed rule (80 FR 24395), we 
proposed new titles for these three MS-DRGs that would change the 
reference of ``9+ Fusions'' to ``Extensive Fusions.''
    We invited public comments on our proposal.
    Comment: Several commenters supported the proposal to modify the 
titles for ICD-10 MS-DRGs 456 through 458. The commenters stated that 
the proposal was reasonable, given the data and information provided.
    Response: We appreciate the commenters' support.
    After consideration of the public comments we received, we are 
finalizing our proposal to modify the titles for ICD-10 MS-DRGs 456 
through 458. The final title revisions to MS-DRGs 456, 457, and 458 for 
the FY 2016 ICD-10 MS-DRGs Version 33 are as follows:
     MS-DRG 456 (Spinal Fusion Except Cervical with Spinal 
Curvature/Malignancy/Infection or Extensive Fusion with MCC);
     MS-DRG 457 (Spinal Fusion Except Cervical with Spinal 
Curvature/Malignancy/Infection or Extensive Fusion with CC); and
     MS-DRG 458 (Spinal Fusion Except Cervical with Spinal 
Curvature/Malignancy/Infection or Extensive Fusion without CC/MCC).
5. MDC 14 (Pregnancy, Childbirth and the Puerperium): MS-DRG 775 
(Vaginal Delivery Without Complicating Diagnosis)
    We received a request to modify the logic for ICD-10 MS-DRG 775 
(Vaginal Delivery without Complicating Diagnosis) so that the procedure 
code for the induction of labor with a cervical ripening gel would not 
group to the incorrect MS-DRG when a normal delivery has occurred. ICD-
10-PCS procedure code 3E0P7GC (Introduction of other therapeutic 
substance into female reproductive, via natural or artificial opening) 
describes this procedure.
    We reviewed how this procedure code is currently classified under 
the ICD-10 MS-DRGs Version 32 and noted that it is currently designated 
as an operating room (O.R.) procedure code that affects MS-DRG 
assignment. In the FY 2016 IPPS/LTCH PPS proposed rule (80 FR 24395), 
we agreed with the requestor that the current logic for ICD-10-PCS 
procedure code 3E0P7GC did not result in the appropriate MS-DRG 
assignment. The result of our analysis suggested that this code should 
not be designated as an O.R. code. Our clinical advisors agreed that 
this procedure did not require the intensity or complexity of service 
and resource utilization to merit an O.R. designation under ICD-10. 
Therefore, in the proposed rule, we proposed to make ICD-10-PCS 
procedure code 3E0P7GC a non-O.R. code so that cases reporting this 
procedure code will group to the appropriate MS-DRG assignment. We 
invited public comments on our proposal.
    Comment: Several commenters supported the proposal to modify the 
logic for ICD-10 MS-DRG 775 so that procedure code 3E0P7GC would not 
group to the incorrect MS-DRG when a normal delivery has occurred. The 
commenters stated that the proposal

[[Page 49407]]

was reasonable, given the data and information provided.
    Response: We appreciate the commenters' support for our proposal.
    After consideration of the public comments received, we are 
finalizing our proposal to modify the logic for ICD-10 MS-DRG 775 so 
that ICD-10-PCS procedure code 3E0P7GC will not group to the incorrect 
MS-DRG when a normal delivery has occurred.
    Our analysis of ICD-10-PCS procedure code 3E0P7GC also prompted the 
review of additional, similar codes that describe the introduction of a 
substance. We evaluated the following ICD-10-PCS procedure codes:
     3E0P76Z (Introduction of nutritional substance into female 
reproductive, via natural or artificial opening);
     3E0P77Z (Introduction of electrolytic and water balance 
substance into female reproductive, via natural or artificial opening);
     3E0P7SF (Introduction of other gas into female 
reproductive, via natural or artificial opening);
     3E0P83Z (Introduction of anti-inflammatory into female 
reproductive, via natural or artificial opening endoscopic);
     3E0P86Z (Introduction of nutritional substance into female 
reproductive, via natural or artificial opening endoscopic);
     3E0P87Z (Introduction of electrolytic and water balance 
substance into female reproductive, via natural or artificial opening 
endoscopic);
     3E0P8GC (Introduction of other therapeutic substance into 
female reproductive, via natural or artificial opening endoscopic); and
     3E0P8SF (Introduction of other gas into female 
reproductive, via natural or artificial opening endoscopic).
    From our analysis, we determined that these codes also are 
currently designated as O.R. codes which affect MS-DRG assignment. Our 
clinical advisors recommended that these codes should also be 
designated as non-O.R. because they do not require the intensity or 
complexity of service and resource utilization to merit an O.R. 
designation under the ICD-10 MS-DRGs. As a result of our analysis and 
based on our clinical advisors' recommendation, in the FY 2016 IPPS/
LTCH PPS proposed rule (80 FR 24395), we proposed to designate the 
above listed ICD-10-PCS procedure codes as non-O.R. procedure codes to 
ensure that these codes will group to the appropriate MS-DRG 
assignment.
    We invited public comments on our proposal.
    Comment: Several commenters agreed with the proposal to change the 
designation for the additional ICD-10-PCS codes listed in the proposed 
rule describing the introduction of a substance from O.R. to non-O.R. 
The commenters stated that the proposal was reasonable, given the data 
and information provided.
    Response: We appreciate the commenters' support.
    After consideration of the public comments received, we are 
finalizing our proposal to designate the following ICD-10-PCS procedure 
codes as non-O.R. for the FY 2016 ICD-10 MS-DRGs Version 33: 3E0P76Z; 
3E0P77Z; 3E0P7SF; 3E0P83Z; 3E0P86Z; 3E0P87Z; 3E0P8GC; and 3E0P8SF.
6. MDC 21 (Injuries, Poisonings and Toxic Effects of Drugs): CroFab 
Antivenin Drug
    We received a request that CMS change the MS-DRG assignment for 
antivenom cases from MS-DRG 917 and 918 (Poisoning & Toxic Effects of 
Drugs with and without MCC, respectively). For the FY 2016 IPPS/LTCH 
PPS proposed rule, for these MS-DRGs, we examined claims data from the 
December 2014 update of the FY 2014 MedPAR file for cases reporting 
ICD-9-CM diagnosis codes of a principal diagnosis 989.5 (Toxic effect 
of venom), a secondary diagnosis ICD-9-CM E code of E905.0 (Venomous 
snakes and lizards), and the ICD-9-CM procedure code of 99.16 
(Injection of antidote), which is a non-O.R. code and does not impact 
the MS-DRG assignment.
    For the ICD-9-CM diagnosis code 989.5 (Toxic effect of venom), the 
ICD-10-CM provides more detailed diagnosis codes for these toxic 
effects of venom cases as shown in the following table:

      ICD-10-CM Code Translations for ICD-9-CM Diagnosis Code 989.5
------------------------------------------------------------------------
      ICD-10-CM Code                      Code description
------------------------------------------------------------------------
T63.001A.................  Toxic effect of unspecified snake venom,
                            accidental (unintentional), initial
                            encounter.
T63.011A.................  Toxic effect of rattlesnake venom, accidental
                            (unintentional) initial encounter.
T63.021A.................  Toxic effect of coral snake venom, accidental
                            (unintentional), initial encounter.
T63.031A.................  Toxic effect of taipan venom, accidental
                            (unintentional), initial encounter.
T63.041A.................  Toxic effect of cobra venom, accidental
                            (unintentional), initial encounter.
T63.061A.................  Toxic effect of venom of other North and
                            South American snake, accidental
                            (unintentional), initial encounter.
T63.71A..................  Toxic effect of venom of other Australian
                            snake, accidental (unintentional), initial
                            encounter.
T63.081A.................  Toxic effect of venom of other African and
                            Asian snake, accidental (unintentional),
                            initial encounter.
T63.091A.................  Toxic effect of venom of other snake,
                            accidental (unintentional), initial
                            encounter.
------------------------------------------------------------------------

    For the ICD-9-CM Supplementary Classification of External Causes of 
Injury and Poisoning code E905.0 (Venomous snakes and lizards), ICD-10-
CM provides more detailed diagnosis codes for these cases as shown in 
the following table:

          ICD-10-CM Code Translations for ICD-9-CM Code E905.0
------------------------------------------------------------------------
      ICD-10-CM Code                      Code description
------------------------------------------------------------------------
T63.001A.................  Toxic effect of unspecified snake venom,
                            accidental (unintentional), initial
                            encounter.
T63.011A.................  Toxic effect of rattlesnake venom, accidental
                            (unintentional) initial encounter.
T63.021A.................  Toxic effect of coral snake venom, accidental
                            (unintentional), initial encounter.
T63.031A.................  Toxic effect of taipan venom, accidental
                            (unintentional), initial encounter.
T63.041A.................  Toxic effect of cobra venom, accidental
                            (unintentional), initial encounter.
T63.061A.................  Toxic effect of venom of other North and
                            South American snake, accidental
                            (unintentional), initial encounter.

[[Page 49408]]

 
T63.71A..................  Toxic effect of venom of other Australian
                            snake, accidental (unintentional), initial
                            encounter.
T63.081A.................  Toxic effect of venom of other African and
                            Asian snake, accidental (unintentional),
                            initial encounter.
T63.091A.................  Toxic effect of venom of other snake,
                            accidental (unintentional), initial
                            encounter.
------------------------------------------------------------------------

    We examined claims data for reported cases involving injections for 
snake bites in MS-DRGs 917 and 918 from the December 2014 update of the 
FY 2014 MedPAR file. Our findings are displayed in the table below.

                                           Snake Bite With Injections
----------------------------------------------------------------------------------------------------------------
                                                                     Number of    Average length
                             MS-DRG                                    cases          of stay      Average costs
----------------------------------------------------------------------------------------------------------------
MS-DRG 917--All cases...........................................          26,393            4.77          $9,983
MS-DRG 917--Cases with principal diagnosis code 989.5 and                      0               0               0
 secondary diagnosis code E905.0 with procedure code 99.16 (non-
 OR)............................................................
MS-DRG 918--All cases...........................................          24,557            2.90           4,953
MS-DRG 918--Cases with principal diagnosis code 989.5 and                     19            2.16          12,014
 secondary diagnosis code E905.0 with procedure code 99.16 (non-
 OR)............................................................
----------------------------------------------------------------------------------------------------------------

    As shown in the table above, we identified 19 cases involving 
injections for snake bites reported in MS-DRG 918 only. In the FY 2016 
IPPS/LTCH PPS proposed rule, we pointed out that this small number of 
cases (19) does not provide justification to create a new MS-DRG. The 
cases are assigned to the same MS-DRG as are other types of poisonings 
and toxic effects. We were unable to identify another MS-DRG that would 
be a more appropriate MS-DRG assignment for these cases based on the 
clinical nature of this condition. The MS-DRGs are a classification 
system intended to group together diagnoses and procedures with similar 
clinical characteristics and utilization of resources. Basing a new MS-
DRG on such a small number of cases (19) could lead to distortions in 
the relative payment weights for the MS-DRG because several expensive 
cases could impact the overall relative payment weight. Having larger 
clinical cohesive groups within an MS-DRG provides greater stability 
for annual updates to the relative payment weights.
    Our clinical advisors reviewed the data, evaluated these 
conditions, and recommended that we not change the MS-DRG assignment 
for procedures involving the injection of the CroFab antivenom drug for 
snake bites because these cases are clinically similar to other 
poisoning cases currently assigned to MS-DRGs 917 and 918. Based on the 
findings in our data analysis and the recommendations of our clinical 
advisors, in the FY 2016 IPPS/LTCH PPS proposed rule (80 FR 24397), we 
did not propose to create a new MS-DRG for cases of CroFab antivenom 
drugs for snake bites. We proposed to maintain the current assignment 
of diagnosis codes in MS-DRGs 917 and 918. We invited public comments 
on our proposal.
    Comment: A number of commenters supported the proposal to maintain 
the current MS-DRG assignment for procedures involving CroFab 
antivenom. The commenters stated that the proposal was reasonable, 
given the data and information provided.
    Response: We appreciate the commenters' support for our proposal.
    After consideration of the public comments we received, we are 
finalizing our proposal to maintain the current MS-DRG assignment for 
procedures involving the CroFab antivenom drug for snakebites to MS-
DRGs 917 and 918.
7. MDC 22 (Burns): Additional Severity of Illness Level for MS-DRG 927 
(Extensive Burns or Full Thickness Burns With Mechanical Ventilation 
96+ Hours With Skin Graft)
    We received a request to add an additional severity level to MS-DRG 
927 (Extensive Burns or Full Thickness Burns with Mechanical 
Ventilation 96+ Hours with Skin Graft). The requestor was concerned 
about payment for severe burn cases that used dermal regenerative 
grafts. These grafts are captured by ICD-9-CM procedure code 86.67 
(Dermal regenerative graft). The requestor stated that the total cost 
of these graft cases is significantly greater than the average total 
costs for all cases in MS-DRG 927. The requestor stated that the dermal 
regenerative grafts are used to cover large burns where donor skin is 
not available. The requestor stated that the grafts provide permanent 
covering of the wound and thus immediate closure of the wound. The 
requestor asserted that the grafts offer benefits such as the avoidance 
of infections. The requestor pointed out that MS-DRG 927 is not 
subdivided into severity of illness levels and recommended an 
additional severity level be added to address any payment issues for 
dermal regenerative grafts within MS-DRG 927.
    ICD-10-PCS provides more detailed and specific codes for skin 
grafts. The ICD-10-PCS codes for skin grafts provide specific 
information on the part of the body receiving the skin graft, the type 
of graft, and the approach used to apply the graft. These codes can be 
found in the table labeled ``OHR (Replacement of Skin)'' in the ICD-10 
MS-DRG Version 32 Definitions Manual available on the Internet at: 
http://www.cms.gov/Medicare/Coding/ICD10/ICD-10-MS-DRG-Conversion-Project.html. As stated earlier, for the ICD-9-CM codes that result in 
greater than 50 ICD-10-PCS comparable code translations, we referred 
readers to Table 6P (ICD-10-PCS Code Translations for Final MS-DRG 
Changes), which is available via the Internet on the CMS Web site at: 
http://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/AcuteInpatientPPS/index.html. The table includes the MDC topic, the 
ICD-9-CM code, and the ICD-10-PCS code translations. In Table 6P.2a, we 
show the comparable ICD-10-PCS codes for ICD-9-CM code 86.67 (Dermal 
regenerative graft).
    We examined claims data for cases reported in MS-DRG 927 from the 
December 2014 update of the FY 2014

[[Page 49409]]

MedPAR file. The following table shows our findings.

         Extensive Burns or Full Thickness Burns With Mechanical Ventilation 96+ Hours With Skin Graft)
----------------------------------------------------------------------------------------------------------------
                                                                     Number of    Average length
                             MS-DRG                                    cases          of stay      Average costs
----------------------------------------------------------------------------------------------------------------
MS-DRG 927--All cases...........................................             171           29.92        $113,844
MS-DRG 927--Cases with procedure code 86.67.....................              22            33.5         146,903
MS-DRG 927--Cases with procedure code 86.67 and 96.72                         14            38.6         174,372
 (Mechanical ventilation for 96+ hours).........................
MS-DRG 927--Cases with procedure code 86.67 and without 96.72                  8            24.6          98,482
 (Mechanical ventilation for 96+ hours).........................
MS-DRG 927--All cases with MCC..................................             131           31.51         121,519
MS-DRG 927--All cases with CC...................................              38           25.21          91,910
MS-DRG 927--All cases without CC/MCC............................               2           15.00          27,872
----------------------------------------------------------------------------------------------------------------

    As shown in the table above, we found a total of 171 cases in MS-
DRG 927. Of these 171 cases, there were 131 cases with an MCC, 38 cases 
with a CC, and 2 cases without a CC or an MCC. We determined that the 
requested new severity level did not meet all of the criteria 
established in the FY 2008 IPPS final rule (72 FR 47169), and described 
in section II.G.1.b. of the preamble of the proposed rule, that must be 
met to warrant the creation of a CC or an MCC subgroup within a base 
MS-DRG. Specifically, the requested new severity level did not meet the 
criterion that there are at least 500 cases in the CC or MCC subgroup.
    We also pointed out that the long-term mechanical ventilation cases 
are driving the costs to a greater extent than the graft cases. We 
found that the 22 cases that received a graft had average costs of 
$146,903. The 14 cases that had both 96+ hours of mechanical 
ventilation and a graft had average costs of $174,372. The 8 cases that 
had a graft but did not receive 96+ hours of mechanical ventilation had 
average costs of $98,482.
    Our clinical advisors reviewed this issue and recommended making no 
MS-DRG updates for MS-DRG 927. They advised us that the dermal 
regenerative graft cases are appropriately assigned to the MS-DRG 927 
because they are clinically similar to other cases within MS-DRG 927. 
Our clinical advisors also agreed that the cases in MS-DRG 927 do not 
meet the established criterion for creating a new severity level.
    Based on the findings of our data analysis, the fact that MS-DRG 
927 did not meet the criterion for the creation of an additional 
severity level, and the recommendations of our clinical advisors, in 
the FY 2016 IPPS/LTCH PPS proposed rule (80 FR 24397), we did not 
propose to create a new severity level for MS-DRG 927. We proposed to 
maintain the current MS-DRG 927 structure without additional severity 
levels. We invited public comments on our proposal.
    Comment: A number of commenters supported the proposal to maintain 
the current MS-DRG 927 structure without creating additional severity 
levels. The commenters stated that the proposal was reasonable, given 
the data and information provided.
    Response: We appreciate the commenters' support.
    After consideration of the public comments we received, we are 
finalizing our proposal to maintain the current MS-DRG 927 structure 
without creating additional severity levels.
8. Medicare Code Editor (MCE) Changes
    The Medicare Code Editor (MCE) is a software program that detects 
and reports errors in the coding of Medicare claims data. Patient 
diagnoses, procedure(s), and demographic information are entered into 
the Medicare claims processing systems and are subjected to a series of 
automated screens. The MCE screens are designed to identify cases that 
require further review before classification into an MS-DRG.
    As discussed in section II.G.1.a. of the preamble of the FY 2016 
IPPS/LTCH PPS proposed rule and this final rule, CMS prepared the ICD-
10 MS-DRGs Version 32 based on the FY 2015 MS-DRGs (Version 32) that we 
finalized in the FY 2015 IPPS/LTCH PPS final rule. In November 2014, we 
made available a Definitions Manual of the ICD-10 MS-DRGs Version 32 
and the MCE Version 32 on the ICD-10 MS-DRG Conversion Project Web site 
at: http://www.cms.gov/Medicare/Coding/ICD10/ICD-10-MS-DRG-Conversion-Project.html. We also prepared a document that described the changes 
made between Version 31-R to Version 32 to help facilitate a review of 
the ICD-10 MS-DRGs logic. We produced mainframe and computer software 
for ICD-10 MS-DRGs Version 32 and MCE Version 32, which was made 
available to the public in January 2015. Information on ordering the 
mainframe and computer software through NTIS was made available on the 
CMS Web site at: http://www.cms.gov/Medicare/Coding/ICD10/ICD-10-MS-DRG-Conversion-Project.html under the ``Related Links'' section. We 
encouraged the public to submit to CMS any comments on areas where they 
believed the ICD-10 MS-DRG GROUPER and MCE did not accurately reflect 
the logic and edits found in the ICD-9-CM MS-DRG GROUPER and the MCE.
    For FY 2016, in order to be consistent with the ICD-9-CM MS-DRG 
GROUPER and MCE Version 32, we proposed to add the ICD-10-CM codes 
listed in the table below to the ICD-10 MCE Version 33 of the 
``Manifestation codes not allowed as principal diagnosis'' edit. Under 
the MCE, manifestation codes describe the ``manifestation'' of an 
underlying disease, not the disease itself. Because these codes do not 
describe the disease itself, they should not be used as principal 
diagnoses.

[[Page 49410]]



       ICD-10-CM Codes Proposed To Be Added to the Version 33 MCE
     ``Manifestation Codes Not Allowed as Principal Diagnosis'' Edit
------------------------------------------------------------------------
      ICD-10-CM Code                      Code description
------------------------------------------------------------------------
D75.81...................  Myelofibrosis.
E08.00...................  Diabetes mellitus due to underlying condition
                            with hyperosmolarity without nonketotic
                            hyperglycemic-hyperosmolar coma (NKHHC).
E08.01...................  Diabetes mellitus due to underlying condition
                            with hyperosmolarity with coma.
E08.10...................  Diabetes mellitus due to underlying condition
                            with ketoacidosis without coma.
E08.11...................  Diabetes mellitus due to underlying condition
                            with ketoacidosis with coma.
E08.21...................  Diabetes mellitus due to underlying condition
                            with diabetic nephropathy.
E08.22...................  Diabetes mellitus due to underlying condition
                            with diabetic chronic kidney disease.
E08.29...................  Diabetes mellitus due to underlying condition
                            with other diabetic kidney complication.
E08.311..................  Diabetes mellitus due to underlying condition
                            with unspecified diabetic retinopathy with
                            macular edema.
E08.319..................  Diabetes mellitus due to underlying condition
                            with unspecified diabetic retinopathy
                            without macular edema.
E08.321..................  Diabetes mellitus due to underlying condition
                            with mild nonproliferative diabetic
                            retinopathy with macular edema.
E08.329..................  Diabetes mellitus due to underlying condition
                            with mild nonproliferative diabetic
                            retinopathy without macular edema.
E08.331..................  Diabetes mellitus due to underlying condition
                            with moderate nonproliferative diabetic
                            retinopathy with macular edema.
E08.339..................  Diabetes mellitus due to underlying condition
                            with moderate nonproliferative diabetic
                            retinopathy without macular edema.
E08.341..................  Diabetes mellitus due to underlying condition
                            with severe nonproliferative diabetic
                            retinopathy with macular edema.
E08.349..................  Diabetes mellitus due to underlying condition
                            with severe nonproliferative diabetic
                            retinopathy without macular edema.
E08.351..................  Diabetes mellitus due to underlying condition
                            with proliferative diabetic retinopathy with
                            macular edema.
E08.359..................  Diabetes mellitus due to underlying condition
                            with proliferative diabetic retinopathy
                            without macular edema.
E08.36...................  Diabetes mellitus due to underlying condition
                            with diabetic cataract.
E08.39...................  Diabetes mellitus due to underlying condition
                            with other diabetic ophthalmic complication.
E08.40...................  Diabetes mellitus due to underlying condition
                            with diabetic neuropathy, unspecified.
E08.41...................  Diabetes mellitus due to underlying condition
                            with diabetic mononeuropathy.
E08.42...................  Diabetes mellitus due to underlying condition
                            with diabetic polyneuropathy.
E08.43...................  Diabetes mellitus due to underlying condition
                            with diabetic autonomic (poly)neuropathy.
E08.44...................  Diabetes mellitus due to underlying condition
                            with diabetic amyotrophy.
E08.49...................  Diabetes mellitus due to underlying condition
                            with other diabetic neurological
                            complication.
E08.51...................  Diabetes mellitus due to underlying condition
                            with diabetic peripheral angiopathy without
                            gangrene.
E08.52...................  Diabetes mellitus due to underlying condition
                            with diabetic peripheral angiopathy with
                            gangrene.
E08.59...................  Diabetes mellitus due to underlying condition
                            with other circulatory complications.
E08.610..................  Diabetes mellitus due to underlying condition
                            with diabetic neuropathic arthropathy.
E08.618..................  Diabetes mellitus due to underlying condition
                            with other diabetic arthropathy.
E08.620..................  Diabetes mellitus due to underlying condition
                            with diabetic dermatitis.
E08.621..................  Diabetes mellitus due to underlying condition
                            with foot ulcer.
E08.622..................  Diabetes mellitus due to underlying condition
                            with other skin ulcer.
E08.628..................  Diabetes mellitus due to underlying condition
                            with other skin complications.
E08.630..................  Diabetes mellitus due to underlying condition
                            with periodontal disease.
E08.638..................  Diabetes mellitus due to underlying condition
                            with other oral complications.
E08.641..................  Diabetes mellitus due to underlying condition
                            with hypoglycemia with coma.
E08.649..................  Diabetes mellitus due to underlying condition
                            with hypoglycemia without coma.
E08.65...................  Diabetes mellitus due to underlying condition
                            with hyperglycemia.
E08.69...................  Diabetes mellitus due to underlying condition
                            with other specified complication.
E08.8....................  Diabetes mellitus due to underlying condition
                            with unspecified complications.
E08.9....................  Diabetes mellitus due to underlying condition
                            without complications.
------------------------------------------------------------------------

    We invited public comment on our proposal to add the above list of 
ICD-10-CM diagnosis codes to the ``Manifestation codes not allowed as 
principal diagnosis'' edit in the FY 2016 ICD-10 MCE Version 33.
    Comment: Several commenters supported the proposal to add the above 
listed ICD-10-CM diagnosis codes to the ``Manifestation codes not 
allowed as principal diagnosis'' edit in the FY 2016 ICD-10 MCE Version 
33. The commenters stated that the proposed changes for the ICD-10 MCE 
seemed reasonable, given the data and information provided. However, 
one commenter asserted that the code description for ICD-10-CM 
diagnosis code D75.81, ``Myelofibrosis'', as displayed in the table in 
the proposed rule was inaccurate and that the more accurate long 
description is ``Secondary myelofibrosis''. The commenter stated that 
if the proposal for myelofibrosis under the ``Manifestation codes not 
allowed as principal diagnosis'' edit is restricted to ``secondary 
myelofibrosis,'' it would support the proposal. This commenter 
indicated that the disease of myelofibrosis is often the main reason 
for admission as it is a well-defined myeloproliferative neoplasm.
    The commenter also noted it recently participated in proposals 
related to expanding coverage indications for hematopoietic stem cell 
transplant to include patients with a principal diagnosis of 
myelofibrosis. The commenter stated that primary or idiopathic 
myelofibrosis is coded with ICD-9-CM code 238.76 (Myelofibrosis with 
myeloid metaplasia) and will be reported with ICD-10-PCS code D47.1 
(Chronic myeloproliferative disease). The commenter expressed a desire 
for coding of this condition to not create confusion as implementation 
of ICD-10 approaches and pledged to work with its members to confirm 
understanding.
    Response: We appreciate the commenters' support of our proposal to 
add the listed ICD-10-CM diagnosis codes to the ICD-10 MCE Version 33 
of the ``Manifestation codes not allowed as principal diagnosis'' edit. 
With regard to the commenter who asserted that the code description for 
ICD-10-CM diagnosis code D75.81 was inaccurate and that the more 
accurate long description is ``Secondary

[[Page 49411]]

myelofibrosis'', we point out that the official ICD-10-CM diagnosis 
code title description, as displayed in the 2015 Code Descriptions in 
Tabular Order file, which is available on the CMS ICD-10 Web site at 
http://www.cms.gov/Medicare/Coding/ICD10/2015-ICD-10-CM-and-GEMs.html 
in the Downloads section, is as presented in the FY 2016 IPPS/LTCH PPS 
proposed rule, ``Myelofibrosis''. In response to the commenter's 
statement that if the proposal for myelofibrosis under the 
``Manifestation codes not allowed as principal diagnosis'' edit is 
restricted to ``secondary myelofibrosis,'' the commenter would support 
it, we note that ICD-10-CM diagnosis code D75.81 (Myelofibrosis) has an 
inclusion term of ``Secondary myelofibrosis NOS''. (Within ICD-10-CM, 
an inclusion term is defined as a term that is included under certain 
codes. The term represents a condition for which that code is to be 
used. The term may also be a synonym of the code title. We refer the 
reader to the ICD-10-CM Official Guidelines for Coding and Reporting 
for additional information related to inclusion terms.) As such, we 
believe the proposal to include ICD-10-CM diagnosis code D75.81 
(Myelofibrosis) on the list of ``Manifestation codes not allowed as 
principal diagnosis'' edit is not inconsistent with the commenter's 
statement of support for a proposal restricted to ``secondary 
myelofibrosis.'' In response to the commenter indicating that the 
disease of myelofibrosis is often the main reason for admission as it 
is a well-defined myeloproliferative neoplasm, we note that, under both 
ICD-9-CM and ICD-10-CM, myelofibrosis is a manifestation code. As 
discussed previously, manifestation codes describe the manifestation of 
an underlying disease, not the disease itself, and therefore should not 
be used as a principal diagnosis. We also point out that a ``code 
first'' note appears at ICD-10-CM diagnosis code D75.81 
(Myelofibrosis). The ``code first'' note is an etiology/manifestation 
coding convention (additional detail can be found in the ICD-10-CM 
Official Guidelines for Coding and Reporting), indicating that the 
condition has both an underlying etiology and manifestation due to the 
underlying etiology.
    The commenter is correct that primary or idiopathic myelofibrosis 
is coded with ICD-9-CM code 238.76 (Myelofibrosis with myeloid 
metaplasia) and the comparable ICD-10-PCS procedure code translation is 
D47.1 (Chronic myeloproliferative disease). We also acknowledge and 
appreciate that the commenter stated its intent to work with its 
members to confirm understanding of coding as it relates to 
myelofibrosis as the transition to ICD-10 approaches. We encourage the 
commenter to review the ICD-10-CM Official Guidelines for Coding and 
Reporting to assist in that effort.
    After consideration of the public comments we received, for FY 
2016, we are finalizing our proposal to add the ICD-10-PCS codes listed 
earlier in this section to the ICD-10 MCE Version 33 ``Manifestation 
codes not allowed as principal diagnosis'' edit, which will ensure 
consistency with the ICD-9-CM MS-DRG GROUPER and MCE Version 32.
    In the FY 2016 IPPS/LTCH PPS proposed rule (80 FR 24398 through 
24399), we also proposed to revise the language describing the 
``Procedure inconsistent with LOS (Length of stay)'' edit which lists 
ICD-10-PCS code 5A1955Z (Respiratory ventilation, greater than 96 
consecutive hours), effective for the FY 2016 ICD-10 MCE Version 33. 
Currently, in Version 32 of the ICD-10 MCE, the language describing 
this ``Procedure inconsistent with LOS (Length of stay)'' edit states: 
``The following procedure should only be coded on claims with a length 
of stay of four days or greater.'' Because the code description of the 
ICD-10-PCS code is for ventilation that occurs greater than 96 
consecutive hours, we proposed to revise the language for the edit to 
read: ``The following procedure code should only be coded on claims 
with a length of stay greater than 4 days.'' This proposed revision 
would clarify the intent of this MCE edit. We invited public comments 
on our proposal.
    Comment: Several commenters supported the proposal to revise the 
language describing the ``Procedure inconsistent with LOS (Length of 
stay)'' edit. The commenters stated that the proposed changes seem 
reasonable, given the data and information provided.
    Response: We appreciate the commenters' support.
    Consistent with the proposal to revise the language for the 
``Procedure inconsistent with LOS (Length of stay)'' edit because the 
code description for ICD-10-PCS code 5A1955Z is for ventilation that 
occurs greater than 96 consecutive hours, we determined that it is also 
necessary to revise the language for the corresponding ICD-10 MS-DRG 
titles that currently reference the ICD-9-CM terminology for mechanical 
ventilation of ``96 + hours'' based on the ICD-9-CM procedure code 
96.72 (Continuous invasive mechanical ventilation for 96 consecutive 
hours or more) to instead reflect the terminology for the ICD-10-PCS 
code translation. Consistent with the logic for the ICD-9-CM MS-DRGs 
Version 32, ICD-10-PCS code 5A1955Z is assigned to these same MS-DRGs 
under the ICD-10 MS-DRGs Version 33. Under ICD-9-CM, the following six 
MS-DRGs contain GROUPER and MCE logic based on procedure code 96.72:
     MS-DRG 003 (ECMO or Tracheostomy with Mechanical 
Ventilation 96+ Hours or Principal Diagnosis Except, Face Mouth and 
Neck with Major Operating Room Procedure);
     MS-DRG 004 (Tracheostomy with Mechanical Ventilation 96+ 
Hours or Principal Diagnosis Except, Face Mouth and Neck without Major 
Operating Room Procedure);
     MS-DRG 207 (Respiratory System Diagnosis with Ventilator 
Support 96+Hours);
     MS-DRG 870 (Septicemia or Severe Sepsis with Mechanical 
Ventilation 96+ Hours);
     MS-DRG 927 (Extensive Burns or Full Thickness Burns with 
Mechanical Ventilation 96+ Hours with Skin Graft); and
     MS-DRG 933 (Extensive Burns or Full Thickness Burns with 
Mechanical Ventilation 96+ Hours without Skin Graft).
    The following two MS-DRGs do not include GROUPER and MCE logic 
based on procedure code 96.72. However, the titles currently include 
the terminology for without mechanical ventilation of ``96 + hours''.
     MS-DRG 871 (Septicemia or Severe Sepsis without Mechanical 
Ventilation 96+ Hours with MCC); and
     MS-DRG 872 (Septicemia or Severe Sepsis without Mechanical 
Ventilation 96+ Hours with CC).
    Therefore, we are revising the titles for the corresponding ICD-10 
MS-DRGs as the GROUPER and MCE logic include ICD-10-PCS code 5A1955Z 
(Respiratory ventilation, greater than 96 consecutive hours) or the 
language in the title of the MS-DRG includes without mechanical 
ventilation of ``96 + hours''. The revision to the titles is to add a 
``greater than'' sign (>) before the 96 to reflect ``> 96 consecutive 
hours'' and to remove the ``plus sign'' (+) after the 96.
    After consideration of the public comments received, we are 
finalizing our proposal to revise the language describing the 
``Procedure inconsistent with LOS (Length of stay)'' edit which lists 
ICD-10-PCS code 5A1955Z (Respiratory ventilation, greater than 96 
consecutive hours). Consistent with that proposal, we also are revising 
the ICD-

[[Page 49412]]

10 MS-DRG Version 33 titles as follows, effective for FY 2016.
     MS-DRG 003: ``(ECMO or Tracheostomy with Mechanical 
Ventilation >96 Hours or Principal Diagnosis Except, Face Mouth and 
Neck with Major Operating Room Procedure'';
     MS-DRG 004: ``Tracheostomy with Mechanical Ventilation >96 
Hours or Principal Diagnosis Except, Face Mouth and Neck without Major 
Operating Room Procedure'';
     MS-DRG 007: ``Respiratory System Diagnosis with Ventilator 
Support >96 Hours'';
     MS-DRG 870: ``Septicemia or Severe Sepsis with Mechanical 
Ventilation >96 Hours'';
     MS-DRG 871: ``Septicemia or Severe Sepsis without 
Mechanical Ventilation >96 Hours with MCC'';
     MS-DRG 872: ``Septicemia or Severe Sepsis without 
Mechanical Ventilation >96 Hours with CC'';
     MS-DRG 927: ``Extensive Burns or Full Thickness Burns with 
Mechanical Ventilation >96 Hours with Skin Graft''; and
     MS-DRG 933: ``Extensive Burns or Full Thickness Burns with 
Mechanical Ventilation >96 Hours without Skin Graft''.
9. Changes to Surgical Hierarchies
    Some inpatient stays entail multiple surgical procedures, each one 
of which, occurring by itself, could result in assignment of the case 
to a different MS-DRG within the MDC to which the principal diagnosis 
is assigned. Therefore, it is necessary to have a decision rule within 
the GROUPER by which these cases are assigned to a single MS-DRG. The 
surgical hierarchy, an ordering of surgical classes from most resource-
intensive to least resource-intensive, performs that function. 
Application of this hierarchy ensures that cases involving multiple 
surgical procedures are assigned to the MS-DRG associated with the most 
resource-intensive surgical class.
    Because the relative resource intensity of surgical classes can 
shift as a function of MS-DRG reclassification and recalibrations, for 
FY 2016, we reviewed the surgical hierarchy of each MDC, as we have for 
previous reclassifications and recalibrations, to determine if the 
ordering of classes coincides with the intensity of resource 
utilization.
    A surgical class can be composed of one or more MS-DRGs. For 
example, in MDC 11, the surgical class ``kidney transplant'' consists 
of a single MS-DRG (MS-DRG 652) and the class ``major bladder 
procedures'' consists of three MS-DRGs (MS-DRGs 653, 654, and 655). 
Consequently, in many cases, the surgical hierarchy has an impact on 
more than one MS-DRG. The methodology for determining the most 
resource-intensive surgical class involves weighting the average 
resources for each MS-DRG by frequency to determine the weighted 
average resources for each surgical class. For example, assume surgical 
class A includes MS-DRGs 001 and 002 and surgical class B includes MS-
DRGs 003, 004, and 005. Assume also that the average costs of MS-DRG 
001 are higher than that of MS-DRG 003, but the average costs of MS-
DRGs 004 and 005 are higher than the average costs of MS-DRG 002. To 
determine whether surgical class A should be higher or lower than 
surgical class B in the surgical hierarchy, we would weigh the average 
costs of each MS-DRG in the class by frequency (that is, by the number 
of cases in the MS-DRG) to determine average resource consumption for 
the surgical class. The surgical classes would then be ordered from the 
class with the highest average resource utilization to that with the 
lowest, with the exception of ``other O.R. procedures'' as discussed 
below.
    This methodology may occasionally result in assignment of a case 
involving multiple procedures to the lower-weighted MS-DRG (in the 
highest, most resource-intensive surgical class) of the available 
alternatives. However, given that the logic underlying the surgical 
hierarchy provides that the GROUPER search for the procedure in the 
most resource-intensive surgical class, in cases involving multiple 
procedures, this result is sometimes unavoidable.
    We note that, notwithstanding the foregoing discussion, there are a 
few instances when a surgical class with a lower average cost is 
ordered above a surgical class with a higher average cost. For example, 
the ``other O.R. procedures'' surgical class is uniformly ordered last 
in the surgical hierarchy of each MDC in which it occurs, regardless of 
the fact that the average costs for the MS-DRG or MS-DRGs in that 
surgical class may be higher than those for other surgical classes in 
the MDC. The ``other O.R. procedures'' class is a group of procedures 
that are only infrequently related to the diagnoses in the MDC, but are 
still occasionally performed on patients with cases assigned to the MDC 
with these diagnoses. Therefore, assignment to these surgical classes 
should only occur if no other surgical class more closely related to 
the diagnoses in the MDC is appropriate.
    A second example occurs when the difference between the average 
costs for two surgical classes is very small. We have found that small 
differences generally do not warrant reordering of the hierarchy 
because, as a result of reassigning cases on the basis of the hierarchy 
change, the average costs are likely to shift such that the higher-
ordered surgical class has lower average costs than the class ordered 
below it.
    Based on the changes that we proposed to make for FY 2016, as 
discussed in section II.G.3.e. of the preamble of the FY 2016 IPPS/LTCH 
PPS proposed rule, we proposed to revise the surgical hierarchy for MDC 
5 (Diseases and Disorders of the Circulatory System) (80 FR 24399). 
Specifically, we proposed to delete MS-DRG 237 (Major Cardiovascular 
Procedures with MCC) and MS-DRG 238 (Major Cardiovascular Procedures 
without MCC) from the surgical hierarchy. We proposed to sequence 
proposed new MS-DRG 268 (Aortic and Heart Assist Procedures Except 
Pulsation Balloon with MCC) and proposed new MS-DRG 269 (Aortic and 
Heart Assist Procedures Except Pulsation Balloon without MCC) above 
proposed new MS-DRG 270 (Other Major Cardiovascular Procedures with 
MCC), proposed new MS-DRG 271 (Other Major Cardiovascular Procedures 
with CC), and proposed new MS-DRG 272 (Other Major Cardiovascular 
Procedures without CC/MCC). We proposed to sequence proposed new MS-
DRGs 270, 271, and 272 above MS-DRG 239 (Amputation for Circulatory 
System Disorders Except Upper Limb & Toe with MCC). In addition, we 
proposed to sequence proposed new MS-DRG 273 (Percutaneous Intracardiac 
Procedures with MCC) and proposed new MS-DRG 274 (Percutaneous 
Intracardiac Procedures without MCC) above MS-DRG 246 (Percutaneous 
Cardiovascular Procedure with Drug-eluting Stent with MCC or 4+ 
Vessels/Stents).
    We invited public comments on our proposals.
    We did not receive any public comments on our proposals for the 
surgical hierarchy within MDC 5. Therefore, we are finalizing our 
proposals to delete ICD-9-CM MS-DRG 237 and ICD-9-CM MS-DRG 238 from 
the surgical hierarchy. We are adopting as final the sequencing of new 
ICD-10 MS-DRG 268 and new ICD-10 MS-DRG 269 above new ICD-10 MS-DRG 
270, new ICD-10MS-DRG 271, and new ICD-10 MS-DRG 272. We also are 
finalizing our proposal to sequence new ICD-10 MS-DRGs 270, 271, and 
272 above ICD-10 MS-DRG 239. Lastly, we are finalizing the sequencing 
of new ICD-10 MS-DRG 273 and new ICD-10 MS-DRG 274 above ICD-10 MS-DRG 
246.

[[Page 49413]]

10. Changes to the MS-DRG Diagnosis Codes for FY 2016
a. Major Complications or Comorbidities (MCCs) and Complications or 
Comorbidities (CC) Severity Levels for FY 2016
    A complete updated MCC, CC, and Non-CC Exclusion List is available 
via the Internet on the CMS Web site at: http://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/AcuteInpatientPPS/index.html as 
follows:
     Table 6I (Complete MCC list);
     Table 6J (Complete CC list); and
     Table 6K (Complete list of CC Exclusions).
b. Coronary Atherosclerosis Due to Calcified Coronary Lesion
    We received a request that we change the severity levels for ICD-9-
CM diagnosis codes 414.2 (Chronic total occlusion of coronary artery) 
and 414.4 (Coronary atherosclerosis due to calcified coronary lesion) 
from non-CCs to MCCs. The ICD-10-CM codes for these diagnoses are 
I25.82 (Chronic total occlusion of coronary artery) and I25.84 
(Coronary atherosclerosis due to calcified coronary lesion), 
respectively, and both of these codes are currently classified as non-
CCs.
    This issue was previously discussed in the FY 2014 IPPS/LTCH PPS 
proposed rule and final rule (78 FR 27522 and 78 FR 50541 through 
50542, respectively), and the FY 2015 IPPS/LTCH PPS proposed rule and 
final rule (79 FR 28018 and 28019 and 79 FR 49903 and 49904, 
respectively).
    We examined claims data from the December 2014 update of the FY 
2014 MedPAR file for ICD-9-CM diagnosis codes 414.2 and 414.4. The 
following table shows our findings.

--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                     Cnt 1                 Cnt 2                 Cnt 3
              SDX                      SDX description                CC level            Cnt 1      impact     Cnt 2      impact     Cnt 3      impact
--------------------------------------------------------------------------------------------------------------------------------------------------------
414.2..........................  Chronic total occlusion of  Non-CC...................     14,655      1.393     21,222      2.098     20,615      3.046
                                  coronary artery.
414.4..........................  Coronary atherosclerosis    Non-CC...................      1,752      1.412      3,238      2.148      3,244      3.053
                                  due to calcified coronary
                                  lesion.
--------------------------------------------------------------------------------------------------------------------------------------------------------

    We ran the data using the criteria described in the FY 2008 IPPS 
final rule with comment period (72 FR 47169) to determine severity 
levels for procedures in MS-DRGs. The C1 value reflects a patient with 
no other secondary diagnosis or with all other secondary diagnoses that 
are non-CCs. The C2 value reflects a patient with at least one other 
secondary diagnosis that is a CC, but none that is an MCC. The C3 value 
reflects a patient with at least one other secondary diagnosis that is 
an MCC.
    The table above shows that the C1 finding is 1.393 for ICD-9-CM 
diagnosis code 414.2 and the C1 finding is 1.412 for ICD-9-CM diagnosis 
code 414.4. A value close to 1.0 in the C1 field suggests that the 
diagnosis produces the same expected value as a non-CC. A value close 
to 2.0 suggests the condition is more like a CC than a non-CC, but not 
as significant in resource usage as an MCC. A value close to 3.0 
suggests that the condition is expected to consume resources more 
similar to an MCC than a CC or a non-CC. The C2 finding was 2.098 for 
ICD-9-CM diagnosis code 414.2, and the C2 finding was 2.148 for ICD-9-
CM diagnosis code 414.4. A C2 value close to 2.0 suggests the condition 
is more like a CC than a non-CC, but not as significant in resource 
usage as an MCC when there is at least one other secondary diagnosis 
that is a CC but none that is an MCC. While the C1 value of 1.393 for 
ICD-9-CM diagnosis code 414.2 and the C1 value of 1.412 for ICD-9-CM 
diagnosis code 414.4 are above the 1.0 value for a non-CC, these values 
do not support the reclassification of diagnosis codes 414.2 and 414.4 
to MCCs. As stated earlier, a value close to 3.0 suggests the condition 
is expected to consume resources more similar to an MCC than a CC or a 
non-CC. The C2 finding of 2.098 for ICD-9-CM diagnosis code 414.2 and 
the C2 finding of 2.148 for ICD-9-CM diagnosis code 414.4 also do not 
support reclassifying these diagnosis codes to MCCs.
    Our clinical advisors reviewed the data and evaluated these 
conditions. They recommended that we not change the severity level of 
diagnosis codes 414.2 and 414.4 from a non-CC to an MCC. Our clinical 
advisors did not believe that these diagnoses would increase the 
severity of illness level of patients. Considering the C1 and C2 
ratings of both diagnosis codes 414.2 and 414.4 and the input from our 
clinical advisors, in the FY 2016 IPPS/LTCH PPS proposed rule (80 FR 
24399 through 24400), we did not propose to reclassify conditions 
represented by diagnosis codes 414.2 and 414.4 to MCCs. We proposed to 
maintain both of these conditions as non-CCs. As stated earlier, the 
equivalent ICD-10-CM codes for these conditions are codes I25.82 and 
I25.84, respectively. Therefore, based on the data and clinical 
analysis, we proposed to maintain ICD-10-CM diagnosis codes I25.82 and 
I25.84 as non-CCs. We invited public comments on our proposals.
    Comment: A number of commenters supported the proposals to maintain 
the designation of ICD-10-CM diagnosis codes I25.82 and I25.84 as non-
CCs. The commenters stated that the proposals were reasonable, given 
the information that was provided.
    One commenter disagreed with the proposal to maintain code I25.84 
as a non-CC. The commenter indicated that it was not able to duplicate 
the results of C1 and C2 described in the narrative and the table 
presented in the proposed rule, despite contacting CMS for assistance 
in running the data. The commenter disagreed with the CMS' clinical 
advisors that the ICD-9-CM code 414.4 and ICD-10-CM code I25.84 
represent conditions that are not at the MCC level. The commenter 
stated that patients with severe calcified lesions are more difficult 
to treat and, therefore, require greater resources. The commenter also 
expressed concerns that hospitals were underreporting cases of patients 
with calcified lesions.
    Response: We appreciate the commenters' support for our proposals. 
In response to the commenter who disagreed with our clinical advisors' 
determination that ICD-9-CM code 414.4 and ICD-10-CM code I25.84 
represent conditions that are not at the MCC level, we point out that 
ICD-9-CM code 414.4 captures patients who are diagnosed as having 
coronary atherosclerosis due to calcified coronary lesions. This 
diagnosis code includes patients with any range of calcified lesion, 
not just those with severe calcified lesions. Therefore, the use of 
ICD-9-CM code 414.4 is not restricted to those patients who have severe 
calcified lesions. Hospitals are correctly using this code to report 
all patients who are determined to have atherosclerosis due to 
calcified coronary lesions. The same is true for the use of ICD-10-CM 
code I25.84, which is not restricted to cases with severe calcified

[[Page 49414]]

lesions. We based our analysis on claims data reported by hospitals. We 
cannot speculate on the underreporting of this condition on submitted 
claims. It also appears that the commenter did not follow the correct 
methodology in attempting to replicate the results for C1 and C2. The 
categorization of diagnoses as an MCC, 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 increased hospital resource use. We use the same cost 
calculations for computing the C1, C2, and C3 values that we use in 
calculating the relative weights. The cases for each ``C'' statistic 
are the cases with the secondary diagnosis codes for all the cases in 
that subset of non-CC cases, CC cases, or MCC cases. For example, the 
cases that are in the C3 statistic are those cases with one or more MCC 
secondary diagnosis codes in addition to the secondary diagnosis code 
under the specific review. Cases that are in the C2 statistic are those 
cases that do not have any MCC secondary diagnosis codes, but have one 
or more CC secondary diagnosis codes in addition to the secondary 
diagnosis code under review. The remaining cases are in the C1 
statistic and have only non-CC secondary diagnosis codes along with the 
secondary diagnosis code under review. Numerical resource impact values 
were assigned for each diagnosis as follows:

------------------------------------------------------------------------
              Value                               Meaning
------------------------------------------------------------------------
0................................  Significantly below expected value
                                    for the non CC subgroup.
1................................  Approximately equal to expected value
                                    for the non CC subgroup.
2................................  Approximately equal to expected value
                                    for the CC subgroup.
3................................  Approximately equal to expected value
                                    for the major CC subgroup.
4................................  Significantly above the expected
                                    value for the major CC subgroup.
------------------------------------------------------------------------

    Each diagnosis for which Medicare data were available was evaluated 
to determine its impact on resource use and to determine the most 
appropriate CC subclass (non-CC, CC, or MCC) assignment. In order to 
make this determination, the average cost for each subset of cases was 
compared to the expected cost of cases in that subset. An expected 
average cost is computed across all cases in the data analysis for each 
base MS-DRG and severity level (1=MCC, 2=CC, and 3=Non-CC). Then, for 
each case in a subset, the average expected cost is computed based on 
the base MS-DRG and severity level to which the cases are assigned. The 
following format was used to evaluate each diagnosis:

Code Diagnosis Cnt1 C1 Cnt2 C2 Cnt3 C3

    Where count (Cnt) is the number of patients in each subset and 
C1, C2, and C3 are a measure of the impact on resource use of 
patients in each of the subsets. A C1 value of 1.412 for a secondary 
diagnosis code 414.4 (Coronary atherosclerosis due to calcified 
coronary lesion) means that, for the subset of patients who have the 
secondary diagnosis and have either no other secondary diagnosis 
present, or all the other secondary diagnoses present are non-CCs, 
the impact on resource use of the secondary diagnoses is greater 
than the expected value for a non-CC by an amount equal to 41.2 
percent of the difference between the expected value of a CC and a 
non-CC (that is, the impact on resource use of the secondary 
diagnosis is closer to a CC than a non-CC).

    After consideration of the public comments we received, the 
findings from our claims data, and the input from our clinical advisors 
noted above, we are finalizing our proposal to maintain ICD-10-CM 
diagnosis codes I25.82 and I25.84 as non-CCs.
c. Hydronephrosis
    Some ICD-10-CM diagnosis codes express conditions that are normally 
coded in ICD-9-CM using two or more ICD-9-CM diagnosis codes. CMS' goal 
in developing the ICD-10 MS-DRGs was to ensure that a patient case is 
assigned to the same MS-DRG, regardless of whether the patient record 
were to be coded in ICD-9-CM or ICD-10-CM/PCS. When one of the ICD-10-
CM combination codes is used as a principal diagnosis, the cluster of 
ICD-9-CM codes that would be coded on an ICD-9-CM record was evaluated. 
If one of the ICD-9-CM codes in the cluster is a CC or an MCC, the 
single ICD-10-CM combination code used as a principal diagnosis also 
must imply that the CC or MCC is present. Appendix J of the ICD-10 MS-
DRG Definitions Manual Version 32 includes two lists. Part 1 is the 
list of principal diagnosis codes where the ICD-10-CM code is its own 
MCC. Part 2 is the list of principal diagnosis codes where the ICD-10-
CM code is its own CC. Appendix J of the ICD-10 MS-DRG Definitions 
Manual Version 32 is available via the CMS Web site at: http://www.cms.gov/Medicare/Coding/ICD10/ICD-10-MS-DRG-Conversion-Project.html.
    We received a request that the ICD-10-CM combination codes for 
hydronephrosis due to ureteral stricture and urinary stone (N13.1 and 
N13.2) be flagged as principal diagnoses that can act as their own CC 
for MS-DRG grouping purposes.
    In ICD-9-CM, code 591 (Hydronephrosis) is classified as a CC. In 
ICD-10-CM, hydronephrosis is reported with a combination code if the 
hydronephrosis is due to a ureteral stricture or urinary stone 
obstruction of N13.1 (Hydronephrosis with ureteral stricture, not 
elsewhere classified) and N13.2 (Hydronephrosis with renal and ureteral 
calculous obstruction). In ICD-10-CM, these two codes (N13.1 and N 
13.2) are classified as CCs, but these codes are not recognized as 
principal diagnoses that act as their own CC (they are not included in 
the Appendix J of the ICD-10 MS-DRG Definitions Manual Version 32).
    In the FY 2016 IPPS/LTCH PPS proposed rule (80 FR 24400), we stated 
that we agreed with the requestor that ICD-10-CM diagnosis codes N13.1 
and N13.2 should be flagged as principal diagnosis codes that can act 
as their own CC for MS-DRG grouping purposes. Therefore, we proposed 
that diagnosis codes N13.1 and N13.2 be added to the list of principal 
diagnoses that act as their own CC in Appendix J of the ICD-10 MS-DRG 
Definitions Manual Version 33. We invited public comments on our 
proposal.
    Comment: A number of commenters supported the proposal. The 
commenters stated that the proposal was reasonable, given the data and 
information provided.
    Response: We appreciate the commenters' support.
    After consideration of the public comments we received, we are 
finalizing our proposal to add diagnosis codes N13.1 and N13.2 to the 
list of principal diagnoses that can act as their own CC in Appendix J 
of the ICD-10 MS-DRG Definitions Manual Version 33.

[[Page 49415]]

11. Complications or Comorbidity (CC) Exclusions List for FY 2016
a. Background of the CC List and the CC Exclusions List
    Under the IPPS MS-DRG classification system, we have developed a 
standard list of diagnoses that are considered CCs. Historically, we 
developed this list using physician panels that classified each 
diagnosis code based on whether the diagnosis, when present as a 
secondary condition, would be considered a substantial complication or 
comorbidity. A substantial complication or comorbidity was defined as a 
condition that, because of its presence with a specific principal 
diagnosis, would cause an increase in the length of stay by at least 1 
day in at least 75 percent of the patients. However, depending on the 
principal diagnosis of the patient, some diagnoses on the basic list of 
complications and comorbidities may be excluded if they are closely 
related to the principal diagnosis. In FY 2008, we evaluated each 
diagnosis code to determine its impact on resource use and to determine 
the most appropriate CC subclassification (non-CC, CC, or MCC) 
assignment. We refer readers to sections II.D.2. and 3. of the preamble 
of the FY 2008 IPPS final rule with comment period for a discussion of 
the refinement of CCs in relation to the MS-DRGs we adopted for FY 2008 
(72 FR 47152 through 47171).
b. CC Exclusions List for FY 2016
    In the September 1, 1987 final notice (52 FR 33143) concerning 
changes to the DRG classification system, we modified the GROUPER logic 
so that certain diagnoses included on the standard list of CCs would 
not be considered valid CCs in combination with a particular principal 
diagnosis. We created the CC Exclusions List for the following reasons: 
(1) To preclude coding of CCs for closely related conditions; (2) to 
preclude duplicative or inconsistent coding from being treated as CCs; 
and (3) to ensure that cases are appropriately classified between the 
complicated and uncomplicated DRGs in a pair. As we indicated above, we 
developed a list of diagnoses, using physician panels, to include those 
diagnoses that, when present as a secondary condition, would be 
considered a substantial complication or comorbidity. In previous 
years, we have made changes to the list of CCs, either by adding new 
CCs or deleting CCs already on the list.
    In the May 19, 1987 proposed notice (52 FR 18877) and the September 
1, 1987 final notice (52 FR 33154), we explained that the excluded 
secondary diagnoses were established using the following five 
principles:
     Chronic and acute manifestations of the same condition 
should not be considered CCs for one another;
     Specific and nonspecific (that is, not otherwise specified 
(NOS)) diagnosis codes for the same condition should not be considered 
CCs for one another;
     Codes for the same condition that cannot coexist, such as 
partial/total, unilateral/bilateral, obstructed/unobstructed, and 
benign/malignant, should not be considered CCs for one another;
     Codes for the same condition in anatomically proximal 
sites should not be considered CCs for one another; and
     Closely related conditions should not be considered CCs 
for one another.
    The creation of the CC Exclusions List was a major project 
involving hundreds of codes. We have continued to review the remaining 
CCs to identify additional exclusions and to remove diagnoses from the 
master list that have been shown not to meet the definition of a CC.\6\
---------------------------------------------------------------------------

    \6\ We refer readers to the FY 1989 final rule (53 FR 38485, 
September 30, 1988) for the revision made for the discharges 
occurring in FY 1989; the FY 1990 final rule (54 FR 36552, September 
1, 1989) for the FY 1990 revision; the FY 1991 final rule (55 FR 
36126, September 4, 1990) for the FY 1991 revision; the FY 1992 
final rule (56 FR 43209, August 30, 1991) for the FY 1992 revision; 
the FY 1993 final rule (57 FR 39753, September 1, 1992) for the FY 
1993 revision; the FY 1994 final rule (58 FR 46278, September 1, 
1993) for the FY 1994 revisions; the FY 1995 final rule (59 FR 
45334, September 1, 1994) for the FY 1995 revisions; the FY 1996 
final rule (60 FR 45782, September 1, 1995) for the FY 1996 
revisions; the FY 1997 final rule (61 FR 46171, August 30, 1996) for 
the FY 1997 revisions; the FY 1998 final rule (62 FR 45966, August 
29, 1997) for the FY 1998 revisions; the FY 1999 final rule (63 FR 
40954, July 31, 1998) for the FY 1999 revisions; the FY 2001 final 
rule (65 FR 47064, August 1, 2000) for the FY 2001 revisions; the FY 
2002 final rule (66 FR 39851, August 1, 2001) for the FY 2002 
revisions; the FY 2003 final rule (67 FR 49998, August 1, 2002) for 
the FY 2003 revisions; the FY 2004 final rule (68 FR 45364, August 
1, 2003) for the FY 2004 revisions; the FY 2005 final rule (69 FR 
49848, August 11, 2004) for the FY 2005 revisions; the FY 2006 final 
rule (70 FR 47640, August 12, 2005) for the FY 2006 revisions; the 
FY 2007 final rule (71 FR 47870) for the FY 2007 revisions; the FY 
2008 final rule (72 FR 47130) for the FY 2008 revisions; the FY 2009 
final rule (73 FR 48510); the FY 2010 final rule (74 FR 43799); the 
FY 2011 final rule (75 FR 50114); the FY 2012 final rule (76 FR 
51542); the FY 2013 final rule (77 FR 53315); the FY 2014 final rule 
(78 FR 50541), and the FY 2015 final rule (79 FR 49905). In the FY 
2000 final rule (64 FR 41490, July 30, 1999), we did not modify the 
CC Exclusions List because we did not make any changes to the ICD-9-
CM codes for FY 2000.
---------------------------------------------------------------------------

    The ICD-10 MS-DRGs Version 32 CC Exclusion List is included as 
Appendix C in the Definitions Manual available via the Internet on the 
CMS Web site at: http://www.cms.gov/Medicare/Coding/ICD10/ICD-10-MS-DRG-Conversion-Project.html.
    In the FY 2016 IPPS/LTCH PPS proposed rule (80 FR 24401), we did 
not propose any changes to the CC Exclusion List for FY 2016. Because 
we did not propose any changes to the ICD-10 MS-DRGs CC Exclusion List 
for FY 2016, we did not publish Table 6G (Additions to the CC Exclusion 
List) or Table 6H (Deletions from the CC Exclusion List). We developed 
Table 6K (Complete List of CC Exclusions), which is available only via 
the Internet on the CMS Web site at: http://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/AcuteInpatientPPS/index.html. Because 
of the length of Table 6K, we did not publish it in the Addendum to the 
proposed rule.
    As we did for the proposed rule, because we are not making any 
changes to the ICD-10 MS-DRGs CC Exclusion List for FY 2016, we are not 
publishing Table 6G (Additions to the CC Exclusion List) or Table 6H 
(Deletions from the CC Exclusion List). We developed Table 6K (Complete 
List of CC Exclusions), which is available only via the Internet on the 
CMS Web site at: http://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/AcuteInpatientPPS/index.html. Because of the length of Table 
6K, we are not publishing it in the Addendum to this final rule. Each 
of the secondary diagnosis codes for which there is an exclusion is 
listed in Part 1 of Table 6K. Each of these secondary diagnosis codes 
is indicated as a CC or an MCC. If the CC or MCC is allowed with all 
principal diagnoses, the phrase ``NoExcl'' (for no exclusions) follows 
the CC/MCC indicator. Otherwise, a link is given to a collection of 
diagnosis codes which, when used as the principal diagnosis, will cause 
the CC or MCC to be considered as only a non-CC. Part 2 of Table 6K 
lists codes that are assigned as an MCC only for patients discharged 
alive. Otherwise, the codes are assigned as a non-CC.
    A complete updated MCC, CC, and Non-CC Exclusions List is available 
via the Internet on the CMS Web site at: http://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/AcuteInpatientPPS/index.html.
    Because there are no new, revised, or deleted ICD-10-CM diagnosis 
codes for FY 2016, we have not developed Table 6A (New Diagnosis 
Codes), Table 6C (Invalid Diagnosis Codes), or Table 6E (Revised 
Diagnosis Code Titles), for this final rule and they are not published 
as part of this final rule. We have developed Table 6B (New Procedure 
Codes) for new ICD-10-PCS codes which will be implemented on October 1, 
2015. Because there are no revised or

[[Page 49416]]

deleted procedure codes for FY 2016, we have not developed Table 6D 
(Invalid Procedure Codes) or Table 6F (Revised Procedure Codes).
    In the FY 2016 IPPS/LTCH PPS proposed rule (80 FR 24401), we did 
not propose any additions or deletions to the MS-DRG MCC List for FY 
2016 nor any additions or deletions to the MS-DRG CC List for FY 2016. 
As we did for the proposed rule, for this final rule, we have not 
developed Tables 6I.1 (Additions to the MCC List), 6I.2 (Deletions to 
the MCC List), 6J.1 (Additions to the CC List), and 6J.2 (Deletions to 
the CC List), and they are not published as part of this final rule. We 
have developed Tables 6L (Principal Diagnosis Is Its Own MCC List) and 
6M (Principal Diagnosis Is Its Own CC List). As stated in the 
Definitions Manual of the ICD-10 MS DRGs Version 32 on the ICD-10 MS-
DRG Conversion Project Web site at: http://www.cms.gov/Medicare/Coding/ICD10/ICD-10-MS-DRG-Conversion-Project.html, a few ICD-10-CM diagnosis 
codes express conditions that are normally coded in ICD-9-CM using two 
or more ICD-9-CM diagnosis codes. In the interest of ensuring that the 
ICD-10 MS-DRGs place a patient in the same DRG, whenever one of these 
ICD-10-CM combination codes is used as principal diagnosis, the cluster 
of ICD-9-CM codes that would be coded on an ICD-9-CM record is 
considered. If one of the ICD-9-CM codes in the cluster is a CC or an 
MCC, the single ICD-10-CM combination code used as a principal 
diagnosis must also imply the CC or MCC that the ICD-9-CM cluster would 
have presented. The ICD-10-CM diagnoses for which this implication must 
be made are listed in these tables. We also have developed Table 6M.1 
(Additions to Principal Diagnosis Is Its Own CC) to show the two 
additions to this list for the two principal diagnosis codes acting as 
their own CC.
    The complete documentation of the ICD-10 MS-DRG Version 32 GROUPER 
logic, including the current CC Exclusions List, is available via the 
Internet on the CMS Web site at: http://www.cms.gov/Medicare/Coding/ICD10/ICD-10-MS-DRG-Conversion-Project.html. The complete documentation 
of the ICD-10 MS-DRG GROUPER logic also is available on the CMS Acute 
Inpatient PPS Web page at: http://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/AcuteInpatientPPS/index.html.
12. Review of Procedure Codes in MS-DRGs 981 Through 983, 984 Through 
986, and 987 Through 989
    Each year, we review cases assigned to former CMS DRG 468 
(Extensive O.R. Procedure Unrelated to Principal Diagnosis), CMS DRG 
476 (Prostatic O.R. Procedure Unrelated to Principal Diagnosis), and 
CMS DRG 477 (Nonextensive O.R. Procedure Unrelated to Principal 
Diagnosis) to determine whether it would be appropriate to change the 
procedures assigned among these CMS DRGs. Under the MS-DRGs that we 
adopted for FY 2008, CMS DRG 468 was split three ways and became MS-
DRGs 981, 982, and 983 (Extensive O.R. Procedure Unrelated to Principal 
Diagnosis with MCC, with CC, and without CC/MCC, respectively). CMS DRG 
476 became MS-DRGs 984, 985, and 986 (Prostatic O.R. Procedure 
Unrelated to Principal Diagnosis with MCC, with CC, and without CC/MCC, 
respectively). CMS DRG 477 became MS-DRGs 987, 988, and 989 
(Nonextensive O.R. Procedure Unrelated to Principal Diagnosis with MCC, 
with CC, and without CC/MCC, respectively).
    MS-DRGs 981 through 983, 984 through 986, and 987 through 989 
(formerly CMS DRGs 468, 476, and 477, respectively) are reserved for 
those cases in which none of the O.R. procedures performed are related 
to the principal diagnosis. These MS-DRGs are intended to capture 
atypical cases, that is, those cases not occurring with sufficient 
frequency to represent a distinct, recognizable clinical group. MS-DRGs 
984 through 986 (previously CMS DRG 476) are assigned to those 
discharges in which one or more of the following prostatic procedures 
are performed and are unrelated to the principal diagnosis:
     60.0 (Incision of prostate);
     60.12 (Open biopsy of prostate);
     60.15 (Biopsy of periprostatic tissue);
     60.18 (Other diagnostic procedures on prostate and 
periprostatic tissue);
     60.21 (Transurethral prostatectomy);
     60.29 (Other transurethral prostatectomy);
     60.61 (Local excision of lesion of prostate);
     60.69 (Prostatectomy, not elsewhere classified);
     60.81 (Incision of periprostatic tissue);
     60.82 (Excision of periprostatic tissue);
     60.93 (Repair of prostate);
     60.94 (Control of (postoperative) hemorrhage of prostate);
     60.95 (Transurethral balloon dilation of the prostatic 
urethra);
     60.96 (Transurethral destruction of prostate tissue by 
microwave thermotherapy);
     60.97 (Other transurethral destruction of prostate tissue 
by other thermotherapy); and
     60.99 (Other operations on prostate).
    All remaining O.R. procedures are assigned to MS-DRGs 981 through 
983 and 987 through 989, with MS-DRGs 987 through 989 assigned to those 
discharges in which the only procedures performed are nonextensive 
procedures that are unrelated to the principal diagnosis.\7\
---------------------------------------------------------------------------

    \7\ The original list of the ICD-9-CM procedure codes for the 
procedures we consider nonextensive procedures, if performed with an 
unrelated principal diagnosis, was published in Table 6C in section 
IV. of the Addendum to the FY 1989 final rule (53 FR 38591). As part 
of the FY 1991 final rule (55 FR 36135), the FY 1992 final rule (56 
FR 43212), the FY 1993 final rule (57 FR 23625), the FY 1994 final 
rule (58 FR 46279), the FY 1995 final rule (59 FR 45336), the FY 
1996 final rule (60 FR 45783), the FY 1997 final rule (61 FR 46173), 
and the FY 1998 final rule (62 FR 45981), we moved several other 
procedures from DRG 468 to DRG 477, and some procedures from DRG 477 
to DRG 468. No procedures were moved in FY 1999, as noted in the 
final rule (63 FR 40962), in the FY 2000 (64 FR 41496), in the FY 
2001 (65 FR 47064), or in the FY 2002 (66 FR 39852). In the FY 2003 
final rule (67 FR 49999), we did not move any procedures from DRG 
477. However, we did move procedure codes from DRG 468 and placed 
them in more clinically coherent DRGs. In the FY 2004 final rule (68 
FR 45365), we moved several procedures from DRG 468 to DRGs 476 and 
477 because the procedures are nonextensive. In the FY 2005 final 
rule (69 FR 48950), we moved one procedure from DRG 468 to 477. In 
addition, we added several existing procedures to DRGs 476 and 477. 
In FY 2006 (70 FR 47317), we moved one procedure from DRG 468 and 
assigned it to DRG 477. In FY 2007, we moved one procedure from DRG 
468 and assigned it to DRGs 479, 553, and 554. In FYs 2008, 2009, 
2010, 2011, 2012, 2013, 2014, and 2015, no procedures were moved, as 
noted in the FY 2008 final rule with comment period (72 FR 46241), 
in the FY 2009 final rule (73 FR 48513), in the FY 2010 final rule 
(74 FR 43796), in the FY 2011 final rule (75 FR 50122), in the FY 
2012 final rule (76 FR 51549), in the FY 2013 final rule (77 FR 
53321), in the FY 2014 final rule (78 FR 50545); and in the FY 2015 
final rule (79 FR 49906).
---------------------------------------------------------------------------

    Our review of MedPAR claims data showed that there are no cases 
that merited movement or should logically be assigned to any of the 
other MDCs. Therefore, for FY 2016, we did not propose to change the 
procedures assigned among these MS-DRGs. We invited public comments on 
our proposal.
    We did not receive any public comments on our proposal and, 
therefore, are adopting it as final.
a. Moving Procedure Codes From MS-DRGs 981 Through 983 or MS-DRGs 987 
Through 989 into MDCs
    We annually conduct a review of procedures producing assignment to 
MS-DRGs 981 through 983 (Extensive

[[Page 49417]]

O.R. procedure unrelated to principal diagnosis with MCC, with CC, and 
without CC/MCC, respectively) or MS-DRGs 987 through 989 (Nonextensive 
O.R. procedure unrelated to principal diagnosis with MCC, with CC, and 
without CC/MCC, respectively) on the basis of volume, by procedure, to 
see if it would be appropriate to move procedure codes out of these MS-
DRGs into one of the surgical MS-DRGs for the MDC into which the 
principal diagnosis falls. The data are arrayed in two ways for 
comparison purposes. We look at a frequency count of each major 
operative procedure code. We also compare procedures across MDCs by 
volume of procedure codes within each MDC.
    We identify those procedures occurring in conjunction with certain 
principal diagnoses with sufficient frequency to justify adding them to 
one of the surgical MS-DRGs for the MDC in which the diagnosis falls. 
As noted above, there are no cases that merited movement or that should 
logically be assigned to any of the other MDCs. Therefore, for FY 2016, 
we did not propose to remove any procedures from MS-DRGs 981 through 
983 or MS-DRGs 987 through 989 into one of the surgical MS-DRGs for the 
MDC into which the principal diagnosis is assigned. We invited public 
comments on our proposal.
    We did not receive any public comments on our proposal and, 
therefore, are adopting it as final.
b. Reassignment of Procedures Among MS DRGs 981 Through 983, 984 
Through 986, and 987 Through 989
(1) Annual Review of Procedures
    We also annually review the list of ICD-9-CM procedures that, when 
in combination with their principal diagnosis code, result in 
assignment to MS-DRGs 981 through 983, 984 through 986 (Prostatic O.R. 
procedure unrelated to principal diagnosis with MCC, with CC, or 
without CC/MCC, respectively), and 987 through 989, to ascertain 
whether any of those procedures should be reassigned from one of these 
three MS DRGs to another of the three MS-DRGs based on average costs 
and the length of stay. We look at the data for trends such as shifts 
in treatment practice or reporting practice that would make the 
resulting MS-DRG assignment illogical. If we find these shifts, we 
would propose to move cases to keep the MS-DRGs clinically similar or 
to provide payment for the cases in a similar manner. Generally, we 
move only those procedures for which we have an adequate number of 
discharges to analyze the data.
    There are no cases representing shifts in treatment practice or 
reporting practice that would make the resulting MS-DRG assignment 
illogical, or that merited movement so that cases should logically be 
assigned to any of the other MDCs. Therefore, for FY 2016, we did not 
propose to move any procedure codes among these MS-DRGs.
    We did not receive any public comments on our proposal and, 
therefore, are adopting it as final.
(2) Review of Cases With Endovascular Embolization Procedures for 
Epistaxis
    During the comment period for the FY 2015 IPPS/LTCH PPS proposed 
rule, we received a public comment expressing concern regarding 
specific procedure codes that are assigned to MS-DRGs 981 through 983; 
984 through 986; and 987 through 989 in relation to our discussion of 
the annual review of these MS-DRGs in section II.G.12. of that proposed 
rule (79 FR 28020). The commenter noted that the endovascular 
embolization of the arteries of the branches of the internal maxillary 
artery is frequently performed for intractable posterior epistaxis 
(nosebleed). The commenter stated that, currently, diagnosis code 784.7 
(Epistaxis) reported with procedure codes 39.75 (Endovascular 
embolization or occlusion of vessel(s) of head or neck using bare 
coils) and 39.76 (Endovascular embolization or occlusion of vessel(s) 
of head or neck using bioactive coils) groups to MS-DRGs 981, 982, and 
983. The commenter indicated that it also found this grouping with the 
ICD-10 MS-DRGs Version 31 using ICD-10-CM diagnosis code R04.0 
(Epistaxis) reported with artery occlusion procedure codes. The 
commenter requested that CMS review these groupings and consider the 
possibility of reassigning these epistaxis cases with endovascular 
embolization procedure codes into a more specific MS-DRG.
    We considered this public comment to be outside of the scope of the 
FY 2015 IPPS/LTCH PPS proposed rule and, therefore, did not address it 
in the FY 2015 IPPS/LTCH PPS final rule. However, we indicated that we 
would consider this public comment for possible proposals in future 
rulemaking as part of our annual review process.
    ICD-10-PCS provides more detailed codes for endovascular 
embolization or occlusion of vessel(s) of head or neck using bare coils 
and bioactive coils which are listed in the following table:

ICD-10-PCS Codes for Endovascular Embolization or Occlusion of Vessel(s)
          of Head or Neck Using Bare Coils and Bioactive Coils
------------------------------------------------------------------------
     ICD-10-PCS code                      Code description
------------------------------------------------------------------------
03LG0BZ..................  Occlusion of intracranial artery with
                            bioactive intraluminal device, open
                            approach.
03LG0DZ..................  Occlusion of intracranial artery with
                            intraluminal device, open approach.
03LG3BZ..................  Occlusion of intracranial artery with
                            bioactive intraluminal device, percutaneous
                            approach.
03LG3DZ..................  Occlusion of intracranial artery with
                            intraluminal device, percutaneous approach.
03LG4BZ..................  Occlusion of intracranial artery with
                            bioactive intraluminal device, percutaneous
                            endoscopic approach.
03LG4DZ..................  Occlusion of intracranial artery with
                            intraluminal device, percutaneous endoscopic
                            approach.
03LH0BZ..................  Occlusion of right common carotid artery with
                            bioactive intraluminal device, open
                            approach.
03LH0DZ..................  Occlusion of right common carotid artery with
                            intraluminal device, open approach.
03LH3BZ..................  Occlusion of right common carotid artery with
                            bioactive intraluminal device, percutaneous
                            approach.
03LH3DZ..................  Occlusion of right common carotid artery with
                            intraluminal device, percutaneous approach.
03LH4BZ..................  Occlusion of right common carotid artery with
                            bioactive intraluminal device, percutaneous
                            endoscopic approach.
03LH4DZ..................  Occlusion of right common carotid artery with
                            intraluminal device, percutaneous endoscopic
                            approach.
03LJ0BZ..................  Occlusion of left common carotid artery with
                            bioactive intraluminal device, open
                            approach.
03LJ0DZ..................  Occlusion of left common carotid artery with
                            intraluminal device, open approach.
03LJ3BZ..................  Occlusion of left common carotid artery with
                            bioactive intraluminal device, percutaneous
                            approach.
03LJ3DZ..................  Occlusion of left common carotid artery with
                            intraluminal device, percutaneous approach.
03LJ4BZ..................  Occlusion of left common carotid artery with
                            bioactive intraluminal device, percutaneous
                            endoscopic approach.
03LJ4DZ..................  Occlusion of left common carotid artery with
                            intraluminal device, percutaneous endoscopic
                            approach.

[[Page 49418]]

 
03LK0BZ..................  Occlusion of right internal carotid artery
                            with bioactive intraluminal device, open
                            approach.
03LK0DZ..................  Occlusion of right internal carotid artery
                            with intraluminal device, open approach.
03LK3BZ..................  Occlusion of right internal carotid artery
                            with bioactive intraluminal device,
                            percutaneous approach.
03LK3DZ..................  Occlusion of right internal carotid artery
                            with intraluminal device, percutaneous
                            approach.
03LK4BZ..................  Occlusion of right internal carotid artery
                            with bioactive intraluminal device,
                            percutaneous endoscopic approach.
03LK4DZ..................  Occlusion of right internal carotid artery
                            with intraluminal device, percutaneous
                            endoscopic approach.
03LL0BZ..................  Occlusion of left internal carotid artery
                            with bioactive intraluminal device, open
                            approach.
03LL0DZ..................  Occlusion of left internal carotid artery
                            with intraluminal device, open approach.
03LL3BZ..................  Occlusion of left internal carotid artery
                            with bioactive intraluminal device,
                            percutaneous approach.
03LL3DZ..................  Occlusion of left internal carotid artery
                            with intraluminal device, percutaneous
                            approach.
03LL4BZ..................  Occlusion of left internal carotid artery
                            with bioactive intraluminal device,
                            percutaneous endoscopic approach.
03LL4DZ..................  Occlusion of left internal carotid artery
                            with intraluminal device, percutaneous
                            endoscopic approach.
03LM0BZ..................  Occlusion of right external carotid artery
                            with bioactive intraluminal device, open
                            approach.
03LM0DZ..................  Occlusion of right external carotid artery
                            with intraluminal device, open approach.
03LM3BZ..................  Occlusion of right external carotid artery
                            with bioactive intraluminal device,
                            percutaneous approach.
03LM3DZ..................  Occlusion of right external carotid artery
                            with intraluminal device, percutaneous
                            approach.
03LM4BZ..................  Occlusion of right external carotid artery
                            with bioactive intraluminal device,
                            percutaneous endoscopic approach.
03LM4DZ..................  Occlusion of right external carotid artery
                            with intraluminal device, percutaneous
                            endoscopic approach.
03LN0BZ..................  Occlusion of left external carotid artery
                            with bioactive intraluminal device, open
                            approach.
03LN0DZ..................  Occlusion of left external carotid artery
                            with intraluminal device, open approach.
03LN3BZ..................  Occlusion of left external carotid artery
                            with bioactive intraluminal device,
                            percutaneous approach.
03LN3DZ..................  Occlusion of left external carotid artery
                            with intraluminal device, percutaneous
                            approach.
03LN4BZ..................  Occlusion of left external carotid artery
                            with bioactive intraluminal device,
                            percutaneous endoscopic approach.
03LN4DZ..................  Occlusion of left external carotid artery
                            with intraluminal device, percutaneous
                            endoscopic approach.
03LP0BZ..................  Occlusion of right vertebral artery with
                            bioactive intraluminal device, open
                            approach.
03LP0DZ..................  Occlusion of right vertebral artery with
                            intraluminal device, open approach.
03LP3BZ..................  Occlusion of right vertebral artery with
                            bioactive intraluminal device, percutaneous
                            approach.
03LP3DZ..................  Occlusion of right vertebral artery with
                            intraluminal device, percutaneous approach.
03LP4BZ..................  Occlusion of right vertebral artery with
                            bioactive intraluminal device, percutaneous
                            endoscopic approach.
03LP4DZ..................  Occlusion of right vertebral artery with
                            intraluminal device, percutaneous endoscopic
                            approach.
03LQ0BZ..................  Occlusion of left vertebral artery with
                            bioactive intraluminal device, open
                            approach.
03LQ0DZ..................  Occlusion of left vertebral artery with
                            intraluminal device, open approach.
03LQ3BZ..................  Occlusion of left vertebral artery with
                            bioactive intraluminal device, percutaneous
                            approach.
03LQ3DZ..................  Occlusion of left vertebral artery with
                            intraluminal device, percutaneous approach.
03LQ4BZ..................  Occlusion of left vertebral artery with
                            bioactive intraluminal device, percutaneous
                            endoscopic approach.
03LQ4DZ..................  Occlusion of left vertebral artery with
                            intraluminal device, percutaneous endoscopic
                            approach.
03VG0BZ..................  Restriction of intracranial artery with
                            bioactive intraluminal device, open
                            approach.
03VG0DZ..................  Restriction of intracranial artery with
                            intraluminal device, open approach.
03VG3BZ..................  Restriction of intracranial artery with
                            bioactive intraluminal device, percutaneous
                            approach.
03VG3DZ..................  Restriction of intracranial artery with
                            intraluminal device, percutaneous approach.
03VG4BZ..................  Restriction of intracranial artery with
                            bioactive intraluminal device, percutaneous
                            endoscopic approach.
03VG4DZ..................  Restriction of intracranial artery with
                            intraluminal device, percutaneous endoscopic
                            approach.
03VH0BZ..................  Restriction of right common carotid artery
                            with bioactive intraluminal device, open
                            approach.
03VH0DZ..................  Restriction of right common carotid artery
                            with intraluminal device, open approach.
03VH3BZ..................  Restriction of right common carotid artery
                            with bioactive intraluminal device,
                            percutaneous approach.
03VH3DZ..................  Restriction of right common carotid artery
                            with intraluminal device, percutaneous
                            approach.
03VH4BZ..................  Restriction of right common carotid artery
                            with bioactive intraluminal device,
                            percutaneous endoscopic approach.
03VH4DZ..................  Restriction of right common carotid artery
                            with intraluminal device, percutaneous
                            endoscopic approach.
03VJ0BZ..................  Restriction of left common carotid artery
                            with bioactive intraluminal device, open
                            approach.
03VJ0DZ..................  Restriction of left common carotid artery
                            with intraluminal device, open approach.
03VJ3BZ..................  Restriction of left common carotid artery
                            with bioactive intraluminal device,
                            percutaneous approach.
03VJ3DZ..................  Restriction of left common carotid artery
                            with intraluminal device, percutaneous
                            approach.
03VJ4BZ..................  Restriction of left common carotid artery
                            with bioactive intraluminal device,
                            percutaneous endoscopic approach.
03VJ4DZ..................  Restriction of left common carotid artery
                            with intraluminal device, percutaneous
                            endoscopic approach.
03VK0BZ..................  Restriction of right internal carotid artery
                            with bioactive intraluminal device, open
                            approach.
03VK0DZ..................  Restriction of right internal carotid artery
                            with intraluminal device, open approach.
03VK3BZ..................  Restriction of right internal carotid artery
                            with bioactive intraluminal device,
                            percutaneous approach.
03VK3DZ..................  Restriction of right internal carotid artery
                            with intraluminal device, percutaneous
                            approach.
03VK4BZ..................  Restriction of right internal carotid artery
                            with bioactive intraluminal device,
                            percutaneous endoscopic approach.
03VK4DZ..................  Restriction of right internal carotid artery
                            with intraluminal device, percutaneous
                            endoscopic approach.
03VL0BZ..................  Restriction of left internal carotid artery
                            with bioactive intraluminal device, open
                            approach.
03VL0DZ..................  Restriction of left internal carotid artery
                            with intraluminal device, open approach.
03VL3BZ..................  Restriction of left internal carotid artery
                            with bioactive intraluminal device,
                            percutaneous approach.
03VL3DZ..................  Restriction of left internal carotid artery
                            with intraluminal device, percutaneous
                            approach.
03VL4BZ..................  Restriction of left internal carotid artery
                            with bioactive intraluminal device,
                            percutaneous endoscopic approach.
03VL4DZ..................  Restriction of left internal carotid artery
                            with intraluminal device, percutaneous
                            endoscopic approach.
03VM0BZ..................  Restriction of right external carotid artery
                            with bioactive intraluminal device, open
                            approach.
03VM0DZ..................  Restriction of right external carotid artery
                            with intraluminal device, open approach.
03VM3BZ..................  Restriction of right external carotid artery
                            with bioactive intraluminal device,
                            percutaneous approach.
03VM3DZ..................  Restriction of right external carotid artery
                            with intraluminal device, percutaneous
                            approach.

[[Page 49419]]

 
03VM4BZ..................  Restriction of right external carotid artery
                            with bioactive intraluminal device,
                            percutaneous endoscopic approach.
03VM4DZ..................  Restriction of right external carotid artery
                            with intraluminal device, percutaneous
                            endoscopic approach.
03VN0BZ..................  Restriction of left external carotid artery
                            with bioactive intraluminal device, open
                            approach.
03VN0DZ..................  Restriction of left external carotid artery
                            with intraluminal device, open approach.
03VN3BZ..................  Restriction of left external carotid artery
                            with bioactive intraluminal device,
                            percutaneous approach.
03VN3DZ..................  Restriction of left external carotid artery
                            with intraluminal device, percutaneous
                            approach.
03VN4BZ..................  Restriction of left external carotid artery
                            with bioactive intraluminal device,
                            percutaneous endoscopic approach.
03VN4DZ..................  Restriction of left external carotid artery
                            with intraluminal device, percutaneous
                            endoscopic approach.
03VP0BZ..................  Restriction of right vertebral artery with
                            bioactive intraluminal device, open
                            approach.
03VP0DZ..................  Restriction of right vertebral artery with
                            intraluminal device, open approach.
03VP3BZ..................  Restriction of right vertebral artery with
                            bioactive intraluminal device, percutaneous
                            approach.
03VP3DZ..................  Restriction of right vertebral artery with
                            intraluminal device, percutaneous approach.
03VP4BZ..................  Restriction of right vertebral artery with
                            bioactive intraluminal device, percutaneous
                            endoscopic approach.
03VP4DZ..................  Restriction of right vertebral artery with
                            intraluminal device, percutaneous endoscopic
                            approach.
03VQ0BZ..................  Restriction of left vertebral artery with
                            bioactive intraluminal device, open
                            approach.
03VQ0DZ..................  Restriction of left vertebral artery with
                            intraluminal device, open approach.
03VQ3BZ..................  Restriction of left vertebral artery with
                            bioactive intraluminal device, percutaneous
                            approach.
03VQ3DZ..................  Restriction of left vertebral artery with
                            intraluminal device, percutaneous approach.
03VQ4BZ..................  Restriction of left vertebral artery with
                            bioactive intraluminal device, percutaneous
                            endoscopic approach.
03VQ4DZ..................  Restriction of left vertebral artery with
                            intraluminal device, percutaneous endoscopic
                            approach.
03VR0DZ..................  Restriction of face artery with intraluminal
                            device, open approach.
03VR3DZ..................  Restriction of face artery with intraluminal
                            device, percutaneous approach.
03VR4DZ..................  Restriction of face artery with intraluminal
                            device, percutaneous endoscopic approach.
03VS0DZ..................  Restriction of right temporal artery with
                            intraluminal device, open approach.
03VS3DZ..................  Restriction of right temporal artery with
                            intraluminal device, percutaneous approach.
03VS4DZ..................  Restriction of right temporal artery with
                            intraluminal device, percutaneous endoscopic
                            approach.
03VT0DZ..................  Restriction of left temporal artery with
                            intraluminal device, open approach.
03VT3DZ..................  Restriction of left temporal artery with
                            intraluminal device, percutaneous approach.
03VT4DZ..................  Restriction of left temporal artery with
                            intraluminal device, percutaneous endoscopic
                            approach.
03VU0DZ..................  Restriction of right thyroid artery with
                            intraluminal device, open approach.
03VU3DZ..................  Restriction of right thyroid artery with
                            intraluminal device, percutaneous approach.
03VU4DZ..................  Restriction of right thyroid artery with
                            intraluminal device, percutaneous endoscopic
                            approach.
03VV0DZ..................  Restriction of left thyroid artery with
                            intraluminal device, open approach.
03VV3DZ..................  Restriction of left thyroid artery with
                            intraluminal device, percutaneous approach.
03VV4DZ..................  Restriction of left thyroid artery with
                            intraluminal device, percutaneous endoscopic
                            approach.
------------------------------------------------------------------------

    We examined claims data from the December 2014 update of the FY 
2014 MedPAR file for cases with diagnosis code 784.7 reported with 
procedure codes 39.75 and 39.76 in MS-DRGs 981, 982, and 983. The 
following table shows our findings.

           Endovascular Embolization Procedures for Epistaxis
------------------------------------------------------------------------
                                                  Average
              MS-DRG                Number of    length of     Average
                                      cases         stay        costs
------------------------------------------------------------------------
MS-DRG 981--All cases............       21,118        12.38      $33,080
MS-DRG 981--Epistaxis cases with             8         6.50       34,655
 principal diagnosis code 784.7
 and procedure code 39.75........
MS-DRG 981--Epistaxis cases with             2        12.50       50,081
 principal diagnosis code 784.7
 and procedure code 39.76........
MS-DRG 982--All cases............       13,657         7.14       19,392
MS-DRG 982--Epistaxis cases with            22         3.14       17,725
 principal diagnosis code 784.7
 and procedure code 39.75........
MS-DRG 982--Epistaxis cases with             2          2.0       11,010
 principal diagnosis code 784.7
 and procedure code 39.76........
MS-DRG 983--All cases............        2,989         3.60       12,760
MS-DRG 983--Epistaxis cases with             5         2.60       10,532
 principal diagnosis code 784.7
 and procedure code 39.75........
MS-DRG 983--Epistaxis cases with             4         1.50       16,658
 principal diagnosis code 784.7
 and procedure code 39.76........
------------------------------------------------------------------------

    We found only 35 epistaxis cases with procedure code 39.75 reported 
and 8 cases with procedure code 39.76 reported among MS-DRGs 981, 982, 
and 983. The use of endovascular embolizations for epistaxis appears to 
be rare. The average costs for the cases with procedure code 39.75 in 
MS-DRGs 981, 982, and 983 are similar to the average costs for all 
cases in MS-DRGs 981, 982, and 983, respectively. The average costs for 
the cases with procedure code 39.75 in MS-DRGs 981, 982, and 983 were 
$34,655, $17,725, and $10,532, respectively, compared to $33,080, 
$19,392, and $12,760 for all cases in MS-DRGs 981, 982, and 983. The 
average costs for cases with procedure code 39.76 in MS-DRGs 981, 982, 
and 983 were $50,081, $11,010, and $16,658, respectively, and were 
significantly greater than all cases in MS-DRGs 981 and 983. However, 
as stated earlier, there were only 8 cases reported with procedure code 
39.76. As explained previously, MS-DRGs 981, 982, and 983 were created 
for operating

[[Page 49420]]

room procedures that are unrelated to the principal diagnosis. Because 
there were so few cases reported, this does not appear to be a common 
procedure for epistaxis. There were not enough cases to base a change 
of MS-DRG assignment for these cases.
    Our clinical advisors reviewed this issue and did not identify any 
new MS-DRG assignment that would be more appropriate for these rare 
cases. They advised us to maintain the current MS-DRG structure within 
MS-DRGs 981, 982, and 983.
    Based on the results of the examination of the claims data and the 
recommendations from our clinical advisors, in the FY 2016 IPPS/LTCH 
PPS proposed rule (80 FR 24403 through 24405), we did not propose to 
create new MS-DRG assignments for epistaxis cases receiving 
endovascular embolization procedures. We proposed to maintain the 
current MS-DRG structure for epistaxis cases receiving endovascular 
embolization procedures and did not propose any updates to MS-DRGs 981, 
982, and 983. We invited public comments on our proposal.
    Comment: A number of commenters supported the proposal. The 
commenters stated that the proposal was reasonable, given the data and 
information provided.
    Response: We appreciate the commenters' support for our proposal.
    After consideration of the public comments we received, we are 
finalizing our proposal to maintain the current MS-DRG structure for 
epistaxis cases receiving endovascular embolization procedures and not 
make any updates to MS-DRGs 981, 982, and 983.
c. Adding Diagnosis or Procedure Codes to MDCs
    Based on the review of cases in the MDCs, as described above in 
sections II.G.2. through 7. of the preamble of this final rule, we did 
not propose to add any diagnosis or procedure codes to MDCs for FY 
2016. We invited public comments on our proposal.
    We did not receive any public comments on our proposal and, 
therefore, are adopting it as final.
13. Changes to the ICD-9-CM System
a. ICD-10 Coordination and Maintenance Committee
    In September 1985, the ICD-9-CM Coordination and Maintenance 
Committee was formed. This is a Federal interdepartmental committee, 
co-chaired by the National Center for Health Statistics (NCHS), the 
Centers for Disease Control and Prevention, and CMS, charged with 
maintaining and updating the ICD-9-CM system. The final update to ICD-
9-CM codes was to be made on October 1, 2013. Thereafter, the name of 
the Committee was changed to the ICD-10 Coordination and Maintenance 
Committee, effective with the March 19-20, 2014 meeting. The ICD-10 
Coordination and Maintenance Committee addresses updates to the ICD-10-
CM, ICD-10-PCS, and ICD-9-CM coding systems. The Committee is jointly 
responsible for approving coding changes, and developing errata, 
addenda, and other modifications to the coding systems to reflect newly 
developed procedures and technologies and newly identified diseases. 
The Committee is also responsible for promoting the use of Federal and 
non-Federal educational programs and other communication techniques 
with a view toward standardizing coding applications and upgrading the 
quality of the classification system.
    The official list of ICD-9-CM diagnosis and procedure codes by 
fiscal year can be found on the CMS Web site at: http://www.cms.gov/Medicare/Coding/ICD9ProviderDiagnosticCodes/codes.html. The official 
list of ICD-10-CM and ICD-10-PCS codes can be found on the CMS Web site 
at: http://www.cms.gov/Medicare/Coding/ICD10/index.html,
    The NCHS has lead responsibility for the ICD-10-CM and ICD-9-CM 
diagnosis codes included in the Tabular List and Alphabetic Index for 
Diseases, while CMS has lead responsibility for the ICD-10-PCS and ICD-
9-CM procedure codes included in the Tabular List and Alphabetic Index 
for Procedures.
    The Committee encourages participation in the above process by 
health-related organizations. In this regard, the Committee holds 
public meetings for discussion of educational issues and proposed 
coding changes. These meetings provide an opportunity for 
representatives of recognized organizations in the coding field, such 
as the American Health Information Management Association (AHIMA), the 
American Hospital Association (AHA), and various physician specialty 
groups, as well as individual physicians, health information management 
professionals, and other members of the public, to contribute ideas on 
coding matters. After considering the opinions expressed at the public 
meetings and in writing, the Committee formulates recommendations, 
which then must be approved by the agencies.
    The Committee presented proposals for coding changes for 
implementation in FY 2016 at a public meeting held on September 23-24, 
2014, and finalized the coding changes after consideration of comments 
received at the meetings and in writing by November 15, 2014.
    The Committee held its 2015 meeting on March 18-19, 2015. It was 
announced at this meeting that any new ICD-10-CM/PCS codes for which 
there was consensus of public support and for which complete tabular 
and indexing changes would be made by May 2015 would be included in the 
October 1, 2015 update to ICD-10-CM/ICD-10-PCS. For FY 2016, there are 
no new, revised, or deleted ICD-10-CM diagnosis codes. For FY 2016, 
there are new ICD-10-PCS procedure codes that are included in Table 6B 
(New Procedure Codes). However, there are no revised or deleted ICD-10-
PCS procedure codes. There also are no new ICD-9-CM diagnosis or 
procedure codes because ICD-9-CM will be replaced by ICD-10-CM/ICD-10-
PCS for services provided on or after October 1, 2015.
    Copies of the agenda, handouts, and access to the live stream 
videos for the procedure codes discussions at the Committee's September 
23-24, 2014 meeting and March 18-19, 2015 meeting can be obtained from 
the CMS Web site at: http://www.cms.gov/Medicare/Coding/ICD9ProviderDiagnosticCodes/index.html?redirect=/
icd9ProviderDiagnosticCodes/03_meetings.asp. The agenda, handouts and 
minutes of the diagnosis codes discussions at the September 23-24, 2014 
meeting and March 18-19, 2015 meeting are found at: http://www.cdc.gov/nchs/icd/icd9cm-maintenance.html. These Web sites also provide detailed 
information about the Committee, including information on requesting a 
new code, attending a Committee meeting, timeline requirements and 
meeting dates.
    We encourage commenters to address suggestions on coding issues 
involving diagnosis codes to: Donna Pickett, Co-Chairperson, ICD-10 
Coordination and Maintenance Committee, NCHS, Room 2402, 3311 Toledo 
Road, Hyattsville, MD 20782. Comments may be sent by Email to: 
[email protected].
    Questions and comments concerning the procedure codes should be 
addressed to: Patricia Brooks, Co-Chairperson, ICD-10 Coordination and 
Maintenance Committee, CMS, Center for Medicare, Hospital and 
Ambulatory Policy Group, Division of Acute Care, C4-08-06, 7500 
Security Boulevard, Baltimore, MD 21244-1850. Comments may be sent by 
Email to: [email protected].
    In the September 7, 2001 final rule implementing the IPPS new 
technology add-on payments (66 FR 46906), we

[[Page 49421]]

indicated we would attempt to include proposals for procedure codes 
that would describe new technology discussed and approved at the Spring 
meeting as part of the code revisions effective the following October.
    Section 503(a) of Public Law 108-173 included a requirement for 
updating ICD-9-CM codes twice a year instead of a single update on 
October 1 of each year. This requirement was included as part of the 
amendments to the Act relating to recognition of new technology under 
the IPPS. Section 503(a) amended section 1886(d)(5)(K) of the Act by 
adding a clause (vii) which states that the Secretary shall provide for 
the addition of new diagnosis and procedure codes on April 1 of each 
year, but the addition of such codes shall not require the Secretary to 
adjust the payment (or diagnosis-related group classification) until 
the fiscal year that begins after such date. This requirement improves 
the recognition of new technologies under the IPPS system by providing 
information on these new technologies at an earlier date. Data will be 
available 6 months earlier than would be possible with updates 
occurring only once a year on October 1.
    While section 1886(d)(5)(K)(vii) of the Act states that the 
addition of new diagnosis and procedure codes on April 1 of each year 
shall not require the Secretary to adjust the payment, or DRG 
classification, under section 1886(d) of the Act until the fiscal year 
that begins after such date, we have to update the DRG software and 
other systems in order to recognize and accept the new codes. We also 
publicize the code changes and the need for a mid-year systems update 
by providers to identify the new codes. Hospitals also have to obtain 
the new code books and encoder updates, and make other system changes 
in order to identify and report the new codes.
    The ICD-10 (previously the ICD-9-CM) Coordination and Maintenance 
Committee holds its meetings in the spring and fall in order to update 
the codes and the applicable payment and reporting systems by October 1 
of each year. Items are placed on the agenda for the Committee meeting 
if the request is received at least 2 months prior to the meeting. This 
requirement allows time for staff to review and research the coding 
issues and prepare material for discussion at the meeting. It also 
allows time for the topic to be publicized in meeting announcements in 
the Federal Register as well as on the CMS Web site. The public decides 
whether or not to attend the meeting based on the topics listed on the 
agenda. Final decisions on code title revisions are currently made by 
March 1 so that these titles can be included in the IPPS proposed rule. 
A complete addendum describing details of all diagnosis and procedure 
coding changes, both tabular and index, is published on the CMS and 
NCHS Web sites in May of each year. Publishers of coding books and 
software use this information to modify their products that are used by 
health care providers. This 5-month time period has proved to be 
necessary for hospitals and other providers to update their systems.
    A discussion of this timeline and the need for changes are included 
in the December 4-5, 2005 ICD-9-CM Coordination and Maintenance 
Committee Meeting minutes. The public agreed that there was a need to 
hold the fall meetings earlier, in September or October, in order to 
meet the new implementation dates. The public provided comment that 
additional time would be needed to update hospital systems and obtain 
new code books and coding software. There was considerable concern 
expressed about the impact this new April update would have on 
providers.
    In the FY 2005 IPPS final rule, we implemented section 
1886(d)(5)(K)(vii) of the Act, as added by section 503(a) of Public Law 
108-173, by developing a mechanism for approving, in time for the April 
update, diagnosis and procedure code revisions needed to describe new 
technologies and medical services for purposes of the new technology 
add-on payment process. We also established the following process for 
making these determinations. Topics considered during the Fall ICD-10 
(previously ICD-9-CM) Coordination and Maintenance Committee meeting 
are considered for an April 1 update if a strong and convincing case is 
made by the requestor at the Committee's public meeting. The request 
must identify the reason why a new code is needed in April for purposes 
of the new technology process. The participants at the meeting and 
those reviewing the Committee meeting summary report are provided the 
opportunity to comment on this expedited request. All other topics are 
considered for the October 1 update. Participants at the Committee 
meeting are encouraged to comment on all such requests. There were no 
requests approved for an expedited April l, 2015 implementation of a 
code at the September 23-24, 2014 Committee meeting. Therefore, there 
were no new codes implemented on April 1, 2015.
    ICD-9-CM addendum and code title information is published on the 
CMS Web site at: http://www.cms.gov/Medicare/Coding/ICD9ProviderDiagnosticCodes/index.html?redirect=/
icd9ProviderDiagnosticCodes/01overview.asp#TopofPage. ICD-10-CM and 
ICD-10-PCS addendum and code title information is published on the CMS 
Web site at http://www.cms.gov/Medicare/Coding/ICD10/index.html. 
Information on ICD-10-CM diagnosis codes, along with the Official ICD-
10-CM Coding Guidelines, can also be found on the CDC Web site at: 
http://www.cdc.gov/nchs/index.html. Information on new, revised, and 
deleted ICD-10-CM/ICD-10-PCS codes is also provided to the AHA for 
publication in the Coding Clinic for ICD-10. AHA also distributes 
information to publishers and software vendors.
    CMS also sends copies of all ICD-10-CM and ICD-10-PCS coding 
changes to its Medicare contractors for use in updating their systems 
and providing education to providers.
    The code titles are adopted as part of the ICD-10 (previously ICD-
9-CM) Coordination and Maintenance Committee process. Therefore, 
although we publish the code titles in the IPPS proposed and final 
rules, they are not subject to comment in the proposed or final rules.
b. Code Freeze
    In the January 16, 2009 ICD-10-CM and ICD-10-PCS final rule (74 FR 
3340), there was a discussion of the need for a partial or total freeze 
in the annual updates to both ICD-9-CM and ICD-10-CM and ICD-10-PCS 
codes. The public comment addressed in that final rule stated that the 
annual code set updates should cease l year prior to the implementation 
of ICD-10. The commenters stated that this freeze of code updates would 
allow for instructional and/or coding software programs to be designed 
and purchased early, without concern that an upgrade would take place 
immediately before the compliance date, necessitating additional 
updates and purchases.
    HHS responded to comments in the ICD-10 final rule that the ICD-9-
CM Coordination and Maintenance Committee has jurisdiction over any 
action impacting the ICD-9-CM and ICD-10 code sets. Therefore, HHS 
indicated that the issue of consideration of a moratorium on updates to 
the ICD-9-CM, ICD-10-CM, and ICD-10-PCS code sets in anticipation of 
the adoption of ICD-10-CM and ICD-10-PCS would be addressed through the 
Committee at a future public meeting.
    The code freeze was discussed at multiple meetings of the ICD-9-CM 
Coordination and Maintenance

[[Page 49422]]

Committee and public comment was actively solicited. The Committee 
evaluated all comments from participants attending the Committee 
meetings as well as written comments that were received. The Committee 
also considered the delay in implementation of ICD-10 until October 1, 
2014. There was an announcement at the September 19, 2012 ICD-9-CM 
Coordination and Maintenance Committee meeting that a partial freeze of 
both ICD-9-CM and ICD-10 codes will be implemented as follows:
     The last regular annual update to both ICD-9-CM and ICD-10 
code sets was made on October 1, 2011.
     On October 1, 2012 and October 1, 2013, there were to be 
only limited code updates to both ICD-9-CM and ICD-10 code sets to 
capture new technology and new diseases.
     On October 1, 2014, there were to be only limited code 
updates to ICD-10 code sets to capture new technology and diagnoses as 
required by section 503(a) of Public Law 108-173. There were to be no 
updates to ICD-9-CM on October 1, 2014.
     On October 1, 2015, one year after the originally 
scheduled implementation of ICD-10, regular updates to ICD-10 were to 
begin.
    On May 15, 2014, CMS posted an updated Partial Code Freeze schedule 
on the CMS Web site at: http://www.cms.gov/Medicare/Coding/ICD10/ICD-9-CM-Coordination-and-Maintenance-Committee-Meetings.html. This updated 
schedule provided information on the extension of the partial code 
freeze until 1 year after the implementation of ICD-10. As stated 
earlier, on April 1, 2014, the Protecting Access to Medicare Act of 
2014 (PAMA) (Pub. L. 113-93) was enacted, which specified that the 
Secretary may not adopt ICD-10 prior to October 1, 2015. Accordingly, 
the U.S. Department of Health and Human Services released a final rule 
in the Federal Register on August 4, 2014 (79 FR 45128 through 45134) 
that included a new compliance date that requires the use of ICD-10 
beginning October 1, 2015. The August 4, 2014 final rule is available 
for viewing on the Internet at: http://www.gpo.gov/fdsys/pkg/FR-2014-08-04/pdf/2014-18347.pdf. That final rule also requires HIPAA covered 
entities to continue to use ICD-9-CM through September 30, 2015. 
Accordingly, the updated schedule for the partial code freeze is as 
follows:
     The last regular annual updates to both ICD-9-CM and ICD-
10 code sets were made on October 1, 2011.
     On October 1, 2012, October 1, 2013, and October 1, 2014, 
there were only limited code updates to both the ICD-9-CM and ICD-10 
code sets to capture new technologies and diseases as required by 
section 1886(d)(5)(K) of the Act.
     On October 1, 2015, there will be only limited code 
updates to ICD-10 code sets to capture new technologies and diagnoses 
as required by section 1886(d)(5)(K) of the Act. There will be no 
updates to ICD-9-CM, as it will no longer be used for reporting.
     On October 1, 2016 (1 year after implementation of ICD-
10), regular updates to ICD-10 will begin.
    The ICD-10 (previously ICD-9-CM) Coordination and Maintenance 
Committee announced that it would continue to meet twice a year during 
the freeze. At these meetings, the public will be encouraged to comment 
on whether or not requests for new diagnosis and procedure codes should 
be created based on the need to capture new technology and new 
diseases. Any code requests that do not meet the criteria will be 
evaluated for implementation within ICD-10 one year after the 
implementation of ICD-10, once the partial freeze is ended.
    Complete information on the partial code freeze and discussions of 
the issues at the Committee meetings can be found on the ICD-10 
Coordination and Maintenance Committee Web site at: http://www.cms.gov/Medicare/Coding/ICD9ProviderDiagnosticCodes/meetings.html. A summary of 
the September 19, 2012 Committee meeting, along with both written and 
audio transcripts of this meeting, is posted on the Web site at: http://www.cms.gov/Medicare/Coding/ICD9ProviderDiagnosticCodes/ICD-9-CM-C-and-M-Meeting-Materials-Items/2012-09-19-MeetingMaterials.html.
    This partial code freeze has dramatically decreased the number of 
codes created each year as shown by the following information.

                   Total Number of Codes and Changes in Total Number of Codes per Fiscal Year
----------------------------------------------------------------------------------------------------------------
                        ICD-9-CM Codes                                   ICD-10-CM and ICD-10-PCS Codes
----------------------------------------------------------------------------------------------------------------
            Fiscal Year                 Number       Change           Fiscal Year          Number       Change
----------------------------------------------------------------------------------------------------------------
FY 2009 (October 1, 2008):                                      FY 2009:
    Diagnoses......................       14,025          348      ICD-10-CM..........       68,069           +5
    Procedures.....................        3,824           56      ICD-10-PCS.........       72,589      -14,327
FY 2010 (October 1, 2009):                                      FY 2010:
    Diagnoses......................       14,315          290      ICD-10-CM..........       69,099       +1,030
    Procedures.....................        3,838           14      ICD-10-PCS.........       71,957         -632
FY 2011 (October 1, 2010):
    Diagnoses......................       14,432          117      ICD-10-CM..........       69,368         +269
    Procedures.....................        3,859           21      ICD-10-PCS.........       72,081         +124
FY 2012 (October 1, 2011):                                      FY 2012:
    Diagnoses......................       14,567          135      ICD-10-CM..........       69,833         +465
    Procedures.....................        3,877           18      ICD-10-PCS.........       71,918         -163
FY 2013 (October 1, 2012):                                      FY 2013:
    Diagnoses......................       14,567            0      ICD-10-CM..........       69,832           -1
    Procedures.....................        3,878            1      ICD-10-PCS.........       71,920           +2
FY 2014 (October 1, 2013):                                      FY 2014:
    Diagnoses......................       14,567            0      ICD-10-CM..........       69,823           -9
    Procedures.....................        3,882            4      ICD-10-PCS.........       71,924           +4
FY 2015 (October 1, 2014):                                      FY 2015:
    Diagnoses......................       14,567            0      ICD-10-CM..........       69,823            0
    Procedures.....................        3,882            0      ICD-10-PCS.........       71,924            0
FY 2016 (October 1, 2015):                                      FY 2016:
    Diagnoses......................       14,567            0      ICD-10-CM..........       69,823            0
    Procedures.....................        3,882            0      ICD-10-PCS.........       71,974          +50
----------------------------------------------------------------------------------------------------------------


[[Page 49423]]

    As mentioned earlier, the public is provided the opportunity to 
comment on any requests for new diagnosis or procedure codes discussed 
at the ICD-10 Coordination and Maintenance Committee meeting. The 
public has supported only a limited number of new codes during the 
partial code freeze, as can be seen by data shown above. We have gone 
from creating several hundred new codes each year to creating only a 
limited number of new ICD-9-CM and ICD-10 codes.
    At the September 23-24, 2014 and March 18-19, 2015 Committee 
meetings, we discussed any requests we had received for new ICD-10-CM 
diagnosis and ICD-10-PCS procedure codes that were to be implemented on 
October 1, 2015. We did not discuss ICD-9-CM codes. The public was 
given the opportunity to comment on whether or not new ICD-10-CM and 
ICD-10-PCS codes should be created, based on the partial code freeze 
criteria. The public was to use the criteria as to whether codes were 
needed to capture new diagnoses or new technologies. If the codes do 
not meet those criteria for implementation during the partial code 
freeze, consideration was to be given as to whether the codes should be 
created after the partial code freeze ends 1 year after the 
implementation of ICD-10-CM/PCS. We invited public comments on any code 
requests discussed at the September 23-24, 2014 and March 18-19, 2015 
Committee meetings for implementation as part of the October 1, 2015 
update. The deadline for commenting on code proposals discussed at the 
September 23-24, 2014 Committee meeting was November 21, 2014. The 
deadline for commenting on code proposals discussed at the March 18-19, 
2015 Committee meeting was April 17, 2015.
14. Other Policy Changes: Replaced Devices Offered Without Cost or With 
a Credit
a. Background
    In the FY 2008 IPPS final rule with comment period (72 FR 47246 
through 47251), we discussed the topic of Medicare payment for devices 
that are replaced without cost or where credit for a replaced device is 
furnished to the hospital. We implemented a policy to reduce a 
hospital's IPPS payment for certain MS-DRGs where the implantation of a 
device that has been recalled determined the base MS-DRG assignment. We 
specified that if a hospital received a credit for a recalled device 
equal to 50 percent or more of the cost of the device, we would reduce 
a hospital's IPPS payment for those MS-DRGs.
    In the FY 2012 IPPS/LTCH PPS final rule (76 FR 51556 and 51557), we 
clarified this policy to state that the policy applies if the hospital 
received a credit equal to 50 percent or more of the cost of the 
replacement device and issued instructions to hospitals accordingly.
b. Request for Clarification on Policy Relating to ``Device-Dependent'' 
MS-DRGs
    After publication of the FY 2015 IPPS/LTCH PPS final rule, we 
received a request to clarify the list of ``device-dependent'' MS-DRGs 
subject to the policy for payment under the IPPS for replaced devices 
offered without cost or with a credit. Specifically, a requestor noted 
that ICD-9-CM procedure codes that previously grouped to MS-DRGs 216 
through 221 (Cardiac Valve & Other Major Cardiothoracic Procedure with 
and without Cardiac Catheterization, with MCC, with CC, without CC/MCC, 
respectively) and were subject to the policy for payment under the IPPS 
as ``device-dependent'' MS-DRGs had been reassigned to new MS-DRGs 266 
and 267 (Endovascular Cardiac Valve Replacement with MCC and without 
MCC, respectively). The requestor suggested that MS-DRGs 266 and 267 
also should be considered ``device-dependent'' MS-DRGs and added to the 
list of MS-DRGs subject to the IPPS payment policy for replaced devices 
offered without cost or with a credit.
    As noted by the requestor, as final policy for FY 2015, certain 
ICD-9-CM procedure codes that previously grouped to MS-DRGs 216 through 
221, which are on the list of MS-DRGs subject to the policy for payment 
under the IPPS for replaced devices offered without cost or with a 
credit, were reassigned to MS-DRGs 266 and 267. We agree that MS-DRGs 
266 and 267 should be included in the list of ``device-dependent'' MS-
DRGs subject to the IPPS policy. We generally map new MS-DRGs onto the 
list when they are formed from procedures previously assigned to MS-
DRGs that are already on the list. Therefore, in the FY 2016 IPPS/LTCH 
PPS proposed rule (80 FR 24409), we proposed to add MS-DRGs 266 and 267 
to the list of ``device dependent'' MS-DRGs subject to the policy for 
payment under the IPPS for replaced devices offered without cost or 
with a credit.
    In addition, as discussed in section II.G.4.e. of the preamble of 
the proposed rule, for FY 2016, we proposed to delete MS-DRGs 237 and 
238 (Major Cardiovascular Procedures with MCC and without MCC, 
respectively) and create new MS-DRGs 268 and 269 (Aortic and Heart 
Assist Procedures Except Pulsation Balloon with MCC and without MCC, 
respectively), as well as new MS-DRGs 270, 271, and 272 (Other Major 
Cardiovascular Procedures with MCC, with CC, and without CC/MCC, 
respectively). Currently, MS-DRGs 237 and 238 are on the list of MS-
DRGs subject to the policy for payment under the IPPS for replaced 
devices offered without cost or with a credit. As stated previously, we 
generally map new MS-DRGs onto the list when they are formed from 
procedures previously assigned to MS-DRGs that are already on the list. 
Therefore, we indicated that if we finalized these proposed MS-DRG 
changes, we also would add proposed new MS-DRGs 268 through 272 to the 
list of MS-DRGs subject to the policy for payment under the IPPS for 
replaced devices offered without cost or with a credit. We invited 
public comments on our proposed list of MS-DRGs to be subject to the 
IPPS policy for replaced devices offered without cost or with a credit 
for FY 2016 (80 FR 24409 through 24410).
    Comment: Commenters supported the proposal to add MS-DRGs 266 and 
267 to the list of MS-DRGs subject to the IPPS payment policy for 
replaced devices offered without cost or with a credit. We did not 
receive any public comments in response to our proposal to delete ICD-
9-CM MS-DRGs 237 and 238 and add any of the finalized new ICD-10 MS-
DRGs to the list.
    Response: We appreciate the commenters' support.
    After consideration of the public comments we received, we are 
adding MS-DRGs 266 and 267 to the list of MS-DRGs subject to the policy 
for payment under the IPPS for replaced devices offered without cost or 
with a credit, and consistent with the applicable finalized MS-DRG 
changes, also removing existing MS-DRGs 237 and 238 and adding new MS-
DRGs 268 through 272. The list of MS-DRGs that are subject to the IPPS 
policy for replaced devices offered without cost or with a credit for 
FY 2016 is displayed below. We also intend to issue this list to 
providers in the form of a Change Request (CR).

[[Page 49424]]



 List of MS-DRGs Subject to the IPPS Policy for Replaced Devices Offered
                      Without Cost or With a Credit
------------------------------------------------------------------------
            MDC                MS-DRG             MS-DRG title
------------------------------------------------------------------------
PreMDC.....................        001  Heart Transplant or Implant of
                                         Heart Assist System with MCC.
PreMDC.....................        002  Heart Transplant or Implant of
                                         Heart Assist System without
                                         MCC.
MDC 01.....................        023  Craniotomy with Major Device
                                         Implant/Acute Complex CNS PDX
                                         with MCC or Chemo Implant.
MDC 01.....................        024  Craniotomy with Major Device
                                         Implant/Acute Complex CNS PDX
                                         without MCC.
MDC 01.....................        025  Craniotomy & Endovascular
                                         Intracranial Procedures with
                                         MCC.
MDC 01.....................        026  Craniotomy & Endovascular
                                         Intracranial Procedures with
                                         CC.
MDC 01.....................        027  Craniotomy & Endovascular
                                         Intracranial Procedures without
                                         CC/MCC.
MDC 01.....................        040  Peripheral/Cranial Nerve & Other
                                         Nervous System Procedures with
                                         MCC.
MDC 01.....................        041  Peripheral/Cranial Nerve & Other
                                         Nervous System Procedures with
                                         CC or Peripheral
                                         Neurostimulation.
MDC 01.....................        042  Peripheral/Cranial Nerve & Other
                                         Nervous System Procedures
                                         without CC/MCC.
MDC 03.....................        129  Major Head & Neck Procedures
                                         with CC/MCC or Major Device.
MDC 03.....................        130  Major Head & Neck Procedures
                                         without CC/MCC.
MDC 05.....................        215  Other Heart Assist System
                                         Implant.
MDC 05.....................        216  Cardiac Valve & Other Major
                                         Cardiothoracic Procedures with
                                         Cardiac Catheterization with
                                         MCC.
MDC 05.....................        217  Cardiac Valve & Other Major
                                         Cardiothoracic Procedures with
                                         Cardiac Catheterization with
                                         CC.
MDC 05.....................        218  Cardiac Valve & Other Major
                                         Cardiothoracic Procedures with
                                         Cardiac Catheterization without
                                         CC/MCC.
MDC 05.....................        219  Cardiac Valve & Other Major
                                         Cardiothoracic Procedures
                                         without Cardiac Catheterization
                                         with MCC.
MDC 05.....................        220  Cardiac Valve & Other Major
                                         Cardiothoracic Procedures
                                         without Cardiac Catheterization
                                         with CC.
MDC 05.....................        221  Cardiac Valve & Other Major
                                         Cardiothoracic Procedures
                                         without Cardiac Catheterization
                                         without CC/MCC.
MDC 05.....................        222  Cardiac Defibrillator Implant
                                         with Cardiac Catheterization
                                         with AMI/HF/Shock with MCC.
MDC 05.....................        223  Cardiac Defibrillator Implant
                                         with Cardiac Catheterization
                                         with AMI/HF/Shock without MCC.
MDC 05.....................        224  Cardiac Defibrillator Implant
                                         with Cardiac Catheterization
                                         without AMI/HF/Shock with MCC.
MDC 05.....................        225  Cardiac Defibrillator Implant
                                         with Cardiac Catheterization
                                         without AMI/HF/Shock without
                                         MCC.
MDC 05.....................        226  Cardiac Defibrillator Implant
                                         without Cardiac Catheterization
                                         with MCC.
MDC 05.....................        227  Cardiac Defibrillator Implant
                                         without Cardiac Catheterization
                                         without MCC.
MDC 05.....................        242  Permanent Cardiac Pacemaker
                                         Implant with MCC.
MDC 05.....................        243  Permanent Cardiac Pacemaker
                                         Implant with CC.
MDC 05.....................        244  Permanent Cardiac Pacemaker
                                         Implant without CC/MCC.
MDC 05.....................        245  AICD Generator Procedures.
MDC 05.....................        258  Cardiac Pacemaker Device
                                         Replacement with MCC.
MDC 05.....................        259  Cardiac Pacemaker Device
                                         Replacement without MCC.
MDC 05.....................        260  Cardiac Pacemaker Revision
                                         Except Device Replacement with
                                         MCC.
MDC 05.....................        261  Cardiac Pacemaker Revision
                                         Except Device Replacement with
                                         CC.
MDC 05.....................        262  Cardiac Pacemaker Revision
                                         Except Device Replacement
                                         without CC/MCC.
MDC 05.....................        265  AICD Lead Procedures.
MDC 05.....................        266  Endovascular Cardiac Valve
                                         Replacement with MCC.
MDC 05.....................        267  Endovascular Cardiac Valve
                                         Replacement without MCC.
MDC 05.....................        268  Aortic and Heart Assist
                                         Procedures Except Pulsation
                                         Balloon with MCC.
MDC 05.....................        269  Aortic and Heart Assist
                                         Procedures Except Pulsation
                                         Balloon without MCC.
MDC 05.....................        270  Other Major Cardiovascular
                                         Procedures with MCC.
MDC 05.....................        271  Other Major Cardiovascular
                                         Procedures with CC.
MDC 05.....................        272  Other Major Cardiovascular
                                         Procedures without CC/MCC.
MDC 08.....................        461  Bilateral or Multiple Major
                                         Joint Procedures of Lower
                                         Extremity with MCC.
MDC 08.....................        462  Bilateral or Multiple Major
                                         Joint Procedures of Lower
                                         Extremity without MCC.
MDC 08.....................        466  Revision of Hip or Knee
                                         Replacement with MCC.
MDC 08.....................        467  Revision of Hip or Knee
                                         Replacement with CC.
MDC 08.....................        468  Revision of Hip or Knee
                                         Replacement without CC/MCC.
MDC 08.....................        469  Major Joint Replacement or
                                         Reattachment of Lower Extremity
                                         with MCC.
MDC 08.....................        470  Major Joint Replacement or
                                         Reattachment of Lower Extremity
                                         without MCC.
------------------------------------------------------------------------

15. Out of Scope Public Comments
    We received public comments regarding two MS-DRG issues that were 
outside of the scope of the proposals included in the FY 2016 IPPS/LTCH 
proposed rule. These comments were as follows:
     Several commenters requested the creation of a new MS-DRG 
for primary total ankle replacements and revisions of total ankle 
replacement procedures.
     Several commenters requested the creation of a new MS-DRG 
for hip fractures for individuals who receive total hip replacements.
    However, because we consider these public comments to be outside of 
the scope of the proposed rule, we are not addressing them in this 
final rule. As stated in section II.G.1.b. of the preamble of this 
final rule, we encourage individuals with comments about MS-DRG 
classification to submit these comments no later than December 7 of 
each year so that they can be considered for possible inclusion in the 
annual proposed rule and, if included, may be subjected to public 
review and comment. We will consider these public comments for possible 
proposals in future rulemaking as part of our annual review process.

H. Recalibration of the FY 2016 MS-DRG Relative Weights

1. Data Sources for Developing the Relative Weights
    In developing the FY 2016 system of weights, we used two data 
sources: claims data and cost report data. As in previous years, the 
claims data source is the MedPAR file. This file is based on fully 
coded diagnostic and procedure data for all Medicare inpatient hospital 
bills. The FY 2014 MedPAR data used in this final rule include 
discharges occurring on October 1, 2013, through September 30, 2014, 
based on bills received by CMS through March 31,

[[Page 49425]]

2015, from all hospitals subject to the IPPS and short-term, acute care 
hospitals in Maryland (which at that time were under a waiver from the 
IPPS). The FY 2014 MedPAR file used in calculating the relative weights 
includes data for approximately 9,682,319 Medicare discharges from IPPS 
providers. Discharges for Medicare beneficiaries enrolled in a Medicare 
Advantage managed care plan are excluded from this analysis. These 
discharges are excluded when the MedPAR ``GHO Paid'' indicator field on 
the claim record is equal to ``1'' or when the MedPAR DRG payment 
field, which represents the total payment for the claim, is equal to 
the MedPAR ``Indirect Medical Education (IME)'' payment field, 
indicating that the claim was an ``IME only'' claim submitted by a 
teaching hospital on behalf of a beneficiary enrolled in a Medicare 
Advantage managed care plan. In addition, the March 31, 2015 update of 
the FY 2014 MedPAR file complies with version 5010 of the X12 HIPAA 
Transaction and Code Set Standards, and includes a variable called 
``claim type.'' Claim type ``60'' indicates that the claim was an 
inpatient claim paid as fee-for-service. Claim types ``61,'' ``62,'' 
``63,'' and ``64'' relate to encounter claims, Medicare Advantage IME 
claims, and HMO no-pay claims. Therefore, the calculation of the 
relative weights for FY 2016 also excludes claims with claim type 
values not equal to ``60.'' The data exclude CAHs, including hospitals 
that subsequently became CAHs after the period from which the data were 
taken. We note that the FY 2016 relative weights are based on the ICD-
9-CM diagnoses and procedures codes from the MedPAR claims data, 
grouped through the ICD-9-CM version of the FY 2016 GROUPER (Version 
33).
    The second data source used in the cost-based relative weighting 
methodology is the Medicare cost report data files from the HCRIS. 
Normally, we use the HCRIS dataset that is 3 years prior to the IPPS 
fiscal year. Specifically, we used cost report data from the March 31, 
2015 update of the FY 2013 HCRIS for calculating the FY 2016 cost-based 
relative weights.
2. Methodology for Calculation of the Relative Weights
    As we explain in section II.E.2. of the preamble of this final 
rule, we calculated the FY 2016 relative weights based on 19 CCRs, as 
we did for FY 2015. The methodology we used to calculate the FY 2016 
MS-DRG cost-based relative weights based on claims data in the FY 2014 
MedPAR file and data from the FY 2013 Medicare cost reports is as 
follows:
     To the extent possible, all the claims were regrouped 
using the FY 2016 MS-DRG classifications discussed in sections II.B. 
and II.G. of the preamble of this final rule.
     The transplant cases that were used to establish the 
relative weights for heart and heart-lung, liver and/or intestinal, and 
lung transplants (MS-DRGs 001, 002, 005, 006, and 007, respectively) 
were limited to those Medicare-approved transplant centers that have 
cases in the FY 2014 MedPAR file. (Medicare coverage for heart, heart-
lung, liver and/or intestinal, and lung transplants is limited to those 
facilities that have received approval from CMS as transplant centers.)
     Organ acquisition costs for kidney, heart, heart-lung, 
liver, lung, pancreas, and intestinal (or multivisceral organs) 
transplants continue to be paid on a reasonable cost basis. Because 
these acquisition costs are paid separately from the prospective 
payment rate, it is necessary to subtract the acquisition charges from 
the total charges on each transplant bill that showed acquisition 
charges before computing the average cost for each MS-DRG and before 
eliminating statistical outliers.
     Claims with total charges or total lengths of stay less 
than or equal to zero were deleted. Claims that had an amount in the 
total charge field that differed by more than $10.00 from the sum of 
the routine day charges, intensive care charges, pharmacy charges, 
special equipment charges, therapy services charges, operating room 
charges, cardiology charges, laboratory charges, radiology charges, 
other service charges, labor and delivery charges, inhalation therapy 
charges, emergency room charges, blood charges, and anesthesia charges 
were also deleted.
     At least 92.1 percent of the providers in the MedPAR file 
had charges for 14 of the 19 cost centers. All claims of providers that 
did not have charges greater than zero for at least 14 of the 19 cost 
centers were deleted. In other words, a provider must have no more than 
five blank cost centers. If a provider did not have charges greater 
than zero in more than five cost centers, the claims for the provider 
were deleted.
     Statistical outliers were eliminated by removing all cases 
that were beyond 3.0 standard deviations from the geometric mean of the 
log distribution of both the total charges per case and the total 
charges per day for each MS-DRG.
     Effective October 1, 2008, because hospital inpatient 
claims include a POA indicator field for each diagnosis present on the 
claim, only for purposes of relative weight-setting, the POA indicator 
field was reset to ``Y'' for ``Yes'' for all claims that otherwise have 
an ``N'' (No) or a ``U'' (documentation insufficient to determine if 
the condition was present at the time of inpatient admission) in the 
POA field.
    Under current payment policy, the presence of specific HAC codes, 
as indicated by the POA field values, can generate a lower payment for 
the claim. Specifically, if the particular condition is present on 
admission (that is, a ``Y'' indicator is associated with the diagnosis 
on the claim), it is not a HAC, and the hospital is paid for the higher 
severity (and, therefore, the higher weighted MS-DRG). If the 
particular condition is not present on admission (that is, an ``N'' 
indicator is associated with the diagnosis on the claim) and there are 
no other complicating conditions, the DRG GROUPER assigns the claim to 
a lower severity (and, therefore, the lower weighted MS-DRG) as a 
penalty for allowing a Medicare inpatient to contract a HAC. While the 
POA reporting meets policy goals of encouraging quality care and 
generates program savings, it presents an issue for the relative 
weight-setting process. Because cases identified as HACs are likely to 
be more complex than similar cases that are not identified as HACs, the 
charges associated with HAC cases are likely to be higher as well. 
Therefore, if the higher charges of these HAC claims are grouped into 
lower severity MS-DRGs prior to the relative weight-setting process, 
the relative weights of these particular MS-DRGs would become 
artificially inflated, potentially skewing the relative weights. In 
addition, we want to protect the integrity of the budget neutrality 
process by ensuring that, in estimating payments, no increase to the 
standardized amount occurs as a result of lower overall payments in a 
previous year that stem from using weights and case-mix that are based 
on lower severity MS-DRG assignments. If this would occur, the 
anticipated cost savings from the HAC policy would be lost.
    To avoid these problems, we reset the POA indicator field to ``Y'' 
only for relative weight-setting purposes for all claims that otherwise 
have an ``N'' or a ``U'' in the POA field. This resetting ``forced'' 
the more costly HAC claims into the higher severity MS-DRGs as 
appropriate, and the relative weights calculated for each MS-DRG more 
closely reflect the true costs of those cases.

[[Page 49426]]

    In addition, in the FY 2013 IPPS/LTCH PPS final rule, for FY 2013 
and subsequent fiscal years, we finalized a policy to treat hospitals 
that participate in the Bundled Payments for Care Improvement (BPCI) 
initiative the same as prior fiscal years for the IPPS payment modeling 
and ratesetting process without regard to hospitals' participation 
within these bundled payment models (that is, as if hospitals were not 
participating in those models under the BPCI initiative). The BPCI 
initiative, developed under the authority of section 3021 of the 
Affordable Care Act (codified at section 1115A of the Act), is 
comprised of four broadly defined models of care, which link payments 
for multiple services beneficiaries receive during an episode of care. 
Under the BPCI initiative, organizations enter into payment 
arrangements that include financial and performance accountability for 
episodes of care. For FY 2016, as we proposed, we are continuing to 
include all applicable data from subsection (d) hospitals participating 
in BPCI Models 1, 2, and 4 in our IPPS payment modeling and ratesetting 
calculations. We refer readers to the FY 2013 IPPS/LTCH PPS final rule 
for a complete discussion on our final policy for the treatment of 
hospitals participating in the BPCI initiative in our ratesetting 
process. For additional information on the BPCI initiative, we refer 
readers to the CMS' Center for Medicare and Medicaid Innovation's Web 
site at: http://innovation.cms.gov/initiatives/Bundled-Payments/index.html and to section IV.H.4. of the preamble of the FY 2013 IPPS/
LTCH PPS final rule (77 FR 53341 through 53343).
    Once the MedPAR data were trimmed and the statistical outliers were 
removed, the charges for each of the 19 cost groups for each claim were 
standardized to remove the effects of differences in area wage levels, 
IME and DSH payments, and for hospitals located in Alaska and Hawaii, 
the applicable cost-of-living adjustment. Because hospital charges 
include charges for both operating and capital costs, we standardized 
total charges to remove the effects of differences in geographic 
adjustment factors, cost-of-living adjustments, and DSH payments under 
the capital IPPS as well. Charges were then summed by MS-DRG for each 
of the 19 cost groups so that each MS-DRG had 19 standardized charge 
totals. These charges were then adjusted to cost by applying the 
national average CCRs developed from the FY 2013 cost report data.
    The 19 cost centers that we used in the relative weight calculation 
are shown in the following table. The table shows the lines on the cost 
report and the corresponding revenue codes that we used to create the 
19 national cost center CCRs.

--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                                       Medicare charges
                                                     Revenue codes                          Cost from HCRIS     Charges from HCRIS        from HCRIS
  Cost center group name  (19     MedPAR charge       contained in     Cost report line   (Worksheet C, Part    (Worksheet C, Part        (Worksheet
            total)                    field          MedPAR charge       description     1, Column 5 and line   1, Columns 6 and 7     D[dash]3, Column
                                                         field                             number)  Form CMS-    and line number)      and line number)
                                                                                                2552-10          Form CMS-2552-10      Form CMS-2552-10
--------------------------------------------------------------------------------------------------------------------------------------------------------
Routine Days..................  Private Room       011X and 014X....  Adults &           C_1_C5_30             C_1_C6_30             D3_HOS_C2_30
                                 Charges.                              Pediatrics
                                                                       (General Routine
                                                                       Care).
                                Semi-Private Room  012X, 013X and
                                 Charges.           016X-019X
                                Ward Charges.....  015X
Intensive Days................  Intensive Care     020X.............  Intensive Care     C_1_C5_31             C_1_C6_31             D3_HOS_C2_31
                                 Charges.                              Unit.
                                Coronary Care      021X.............  Coronary Care      C_1_C5_32             C_1_C6_32             D3_HOS_C2_32
                                 Charges.                              Unit.
                                                                      Burn Intensive     C_1_C5_33             C_1_C6_33             D3_HOS_C2_33
                                                                       Care Unit.
                                                                      Surgical           C_1_C5_34             C_1_C6_34             D3_HOS_C2_34
                                                                       Intensive Care
                                                                       Unit.
                                                                      Other Special      C_1_C5_35             C_1_C6_35             D3_HOS_C2_35
                                                                       Care Unit.
Drugs.........................  Pharmacy Charges.  025X, 026X and     Intravenous        C_1_C5_64             C_1_C6_64             D3_HOS_C2_64
                                                    063X.              Therapy.
                                                                                                               C_1_C7_64
                                                                      Drugs Charged To   C_1_C5_73             C_1_C6_73             D3_HOS_C2_73
                                                                       Patient.
                                                                                                               C_1_C7_73
Supplies and Equipment........  Medical/Surgical   0270, 0271, 0272,  Medical Supplies   C_1_C5_71             C_1_C6_71             D3_HOS_C2_71
                                 Supply Charges.    0273, 0274,        Charged to
                                                    0277, 0279, and    Patients.
                                                    0621, 0622, 0623.
                                                                                                               C_1_C7_71
                                Durable Medical    0290, 0291, 0292   DME-Rented.......  C_1_C5_96             C_1_C6_96             D3_HOS_C2_96
                                 Equipment          and 0294-0299.
                                 Charges.
                                                                                                               C_1_C7_96
                                Used Durable       0293.............  DME-Sold.........  C_1_C5_97             C_1_C6_97             D3_HOS_C2_97
                                 Medical Charges.
                                                                                                               C_1_C7_97
Implantable Devices...........  .................  0275, 0276, 0278,  Implantable        C_1_C5_72             C_1_C6_72             D3_HOS_C2_72
                                                    0624.              Devices Charged
                                                                       to Patients.
                                                                                                               C_1_C7_72

[[Page 49427]]

 
Therapy Services..............  Physical Therapy   042X.............  Physical Therapy.  C_1_C5_66             C_1_C6_66             D3_HOS_C2_66
                                 Charges.
                                                                                                               C_1_C7_66
                                Occupational       043X.............  Occupational       C_1_C5_67             C_1_C6_67             D3_HOS_C2_67
                                 Therapy Charges.                      Therapy.
                                                                                                               C_1_C7_67
                                Speech Pathology   044X and 047X....  Speech Pathology.  C_1_C5_68             C_1_C6_68             D3_HOS_C2_68
                                 Charges.
                                                                                                               C_1_C7_68
Inhalation Therapy............  Inhalation         041X and 046X....  Respiratory        C_1_C5_65             C_1_C6_65             D3_HOS_C2_65
                                 Therapy Charges.                      Therapy.
                                                                                                               C_1_C7_65
Operating Room................  Operating Room     036X.............  Operating Room...  C_1_C5_50             C_1_C6_50             D3_HOS_C2_50
                                 Charges.
                                                                                                               C_1_C7_50
                                                   071X.............  Recovery Room....  C_1_C5_51             C_1_C6_51             D3_HOS_C2_51
                                                                                                               C_1_C7_51
Labor & Delivery..............  Operating Room     072X.............  Delivery Room and  C_1_C5_52             C_1_C6_52             D3_HOS_C2_52
                                 Charges.                              Labor Room.
                                                                                                               C_1_C7_52
Anesthesia....................  Anesthesia         037X.............  Anes thesi ology.  C_1_C5_53             C_1_C6_53             D3_HOS_C2_53
                                 Charges.
                                                                                                               C_1_C7_53
Cardiology....................  Cardiology         048X and 073X....  Electro            C_1_C5_69             C_1_C6_69             D3_HOS_C2_69
                                 Charges.                              cardiology.
                                                                                                               C_1_C7_69
Cardiac Catheteri zation......  .................  0481.............  Cardiac Catheteri  C_1_C5_59             C_1_C6_59             D3_HOS_C2_59
                                                                       zation.
                                                                                                               C_1_C7_59
Laboratory....................  Laboratory         030X, 031X, and    Laboratory.......  C_1_C5_60             C_1_C6_60             D3_HOS_C2_60
                                 Charges.           075X.
                                                                                                               C_1_C7_60
                                                                      PBP Clinic         C_1_C5_61             C_1_C6_61             D3_HOS_C2_61
                                                                       Laboratory
                                                                       Services.
                                                                                                               C_1_C7_61
                                                   074X, 086X.......  Electro-Enceph     C_1_C5_70             C_1_C6_70             D3_HOS_C2_70
                                                                       alography.
                                                                                                               C_1_C7_70
Radiology.....................  Radiology Charges  032X, 040X.......  Radiology--Diagno  C_1_C5_54             C_1_C6_54             D3_HOS_C2_54
                                                                       stic.
                                                                                                               C_1_C7_54
                                                   028x, 0331, 0332,  Radiology--Therap  C_1_C5_55             C_1_C6_55             D3_HOS_C2_55
                                                    0333, 0335,        eutic.
                                                    0339, 0342.
                                                   0343 and 344.....  Radioisotope.....  C_1_C5_56             C_1_C6_56             D3_HOS_C2_56
                                                                                                               C_1_C7_56
Computed Tomography (CT) Scan.  CT Scan Charges..  035X.............  Computed           C_1_C5_57             C_1_C6_57             D3_HOS_C2_57
                                                                       Tomography (CT)
                                                                       Scan.
                                                                                                               C_1_C7_57
Magnetic Resonance Imaging      MRI Charges......  061X.............  Magnetic           C_1_C5_58             C_1_C6_58             D3_HOS_C2_58
 (MRI).                                                                Resonance
                                                                       Imaging (MRI).
                                                                                                               C_1_C7_58
Emergency Room................  Emergency Room     045x.............  Emergency........  C_1_C5_91             C_1_C6_91             D3_HOS_C2_91
                                 Charges.
                                                                                                               C_1_C7_91
Blood and Blood Products......  Blood Charges....  038x.............  Whole Blood &      C_1_C5_62             C_1_C6_62             D3_HOS_C2_62
                                                                       Packed Red Blood
                                                                       Cells.
                                                   0819 (for                                                   C_1_C7_62
                                                    acquisition
                                                    charges
                                                    associated with
                                                    MS-DRG 014 only).
                                Blood Storage/     039x.............  Blood Storing,     C_1_C5_63             C_1_C6_63             D3_HOS_C2_63
                                 Processing.                           Processing, &
                                                                       Transfusing.
                                                                                                               C_1_C7_63

[[Page 49428]]

 
Other Services................  Other Service      0002-0099, 022X,
                                 Charge.            023X,
                                                    024X,052X,053X.
                                                   055X-060X, 064X-
                                                    070X, 076X-078X,
                                                    090X-095X and
                                                    099X.
                                Renal Dialysis...  0800X............  Renal Dialysis...  C_1_C5_74             C_1_C6_74             D3_HOS_C2_74
                                ESRD Revenue       080X and 082X-                                              C_1_C7_74
                                 Setting Charges.   088X.
                                                                      Home Program       C_1_C5_94             C_1_C6_94             D3_HOS_C2_94
                                                                       Dialysis.
                                                                                                               C_1_C7_94
                                Outpatient         049X.............  ASC (Non Distinct  C_1_C5_75             C_1_C6_75             D3_HOS_C2_75
                                 Service Charges.                      Part).
                                Lithotripsy        079X.............                                           C_1_C7_75
                                 Charge.
                                                                      Other Ancillary..  C_1_C5_76             C_1_C6_76             D3_HOS_C2_76
                                                                                                               C_1_C7_76
                                Clinic Visit       051X.............  Clinic...........  C_1_C5_90             C_1_C6_90             D3_HOS_C2_90
                                 Charges.
                                                                                                               C_1_C7_90
                                                                      Observation beds.  C_1_C5_92.01          C_1_C6_92.01          D3_HOS_C2_92.01
                                                                                                               C_1_C7_92.01
                                Professional Fees  096X, 097X, and    Other Outpatient   C_1_C5_93             C_1_C6_93             D3_HOS_C2_93
                                 Charges.           098X.              Services.
                                                                                                               C_1_C7_93
                                Ambulance Charges  054X.............  Ambulance........  C_1_C5_95             C_1_C6_95             D3_HOS_C2_95
                                                                                                               C_1_C7_95
                                                                      Rural Health       C_1_C5_88             C_1_C6_88             D3_HOS_C2_88
                                                                       Clinic.
                                                                                                               C_1_C7_88
                                                                      FQHC.............  C_1_C5_89             C_1_C6_89             D3_HOS_C2_89
                                                                                                               C_1_C7_89
--------------------------------------------------------------------------------------------------------------------------------------------------------

    We refer readers to the FY 2009 IPPS/LTCH PPS final rule (73 FR 
48462) for a discussion on the revenue codes included in the Supplies 
and Equipment and Implantable Devices CCRs, respectively.

3. Development of National Average CCRs

    We developed the national average CCRs as follows:
    Using the FY 2013 cost report data, we removed CAHs, Indian Health 
Service hospitals, all-inclusive rate hospitals, and cost reports that 
represented time periods of less than 1 year (365 days). We included 
hospitals located in Maryland because we include their charges in our 
claims database. We then created CCRs for each provider for each cost 
center (see prior table for line items used in the calculations) and 
removed any CCRs that were greater than 10 or less than 0.01. We 
normalized the departmental CCRs by dividing the CCR for each 
department by the total CCR for the hospital for the purpose of 
trimming the data. We then took the logs of the normalized cost center 
CCRs and removed any cost center CCRs where the log of the cost center 
CCR was greater or less than the mean log plus/minus 3 times the 
standard deviation for the log of that cost center CCR. Once the cost 
report data were trimmed, we calculated a Medicare-specific CCR. The 
Medicare-specific CCR was determined by taking the Medicare charges for 
each line item from Worksheet D-3 and deriving the Medicare-specific 
costs by applying the hospital-specific departmental CCRs to the 
Medicare-specific charges for each line item from Worksheet D-3. Once 
each hospital's Medicare-specific costs were established, we summed the 
total Medicare-specific costs and divided by the sum of the total 
Medicare-specific charges to produce national average, charge-weighted 
CCRs.
    After we multiplied the total charges for each MS-DRG in each of 
the 19 cost centers by the corresponding national average CCR, we 
summed the 19 ``costs'' across each MS-DRG to produce a total 
standardized cost for the MS-DRG. The average standardized cost for 
each MS-DRG was then computed as the total standardized cost for the 
MS-DRG divided by the transfer-adjusted case count for the MS-DRG. The 
average cost for each MS-DRG was then divided by the national average 
standardized cost per case to determine the relative weight.
    The FY 2016 cost-based relative weights were then normalized by an 
adjustment factor of 1.678947 so that the average case weight after 
recalibration was equal to the average case weight before 
recalibration. The normalization adjustment is intended to ensure that 
recalibration by itself neither increases nor decreases total payments 
under the IPPS, as required by section 1886(d)(4)(C)(iii) of the Act.
    The 19 national average CCRs for FY 2016 are as follows:

[[Page 49429]]



------------------------------------------------------------------------
                           Group                                 CCR
------------------------------------------------------------------------
Routine Days...............................................        0.480
Intensive Days.............................................        0.393
Drugs......................................................        0.191
Supplies & Equipment.......................................        0.297
Implantable Devices........................................        0.337
Therapy Services...........................................        0.332
Laboratory.................................................        0.125
Operating Room.............................................        0.199
Cardiology.................................................        0.118
Cardiac Catheterization....................................        0.124
Radiology..................................................        0.159
MRIs.......................................................        0.085
CT Scans...................................................        0.041
Emergency Room.............................................        0.183
Blood and Blood Products...................................        0.336
Other Services.............................................        0.368
Labor & Delivery...........................................        0.404
Inhalation Therapy.........................................        0.177
Anesthesia.................................................        0.106
------------------------------------------------------------------------

    Since FY 2009, the relative weights have been based on 100 percent 
cost weights based on our MS-DRG grouping system.
    When we recalibrated the DRG weights for previous years, we set a 
threshold of 10 cases as the minimum number of cases required to 
compute a reasonable weight. In the FY 2016 IPPS/LTCH PPS proposed 
rule, we proposed to use that same case threshold in recalibrating the 
MS-DRG relative weights for FY 2016. In the FY 2016 IPPS/LTCH PPS 
proposed rule, we stated that, using data from the FY 2014 MedPAR file, 
there were 8 MS-DRGs that contain fewer than 10 cases (80 FR 24414). 
However, we mistakenly included MS-DRG 768 (Vaginal Delivery with O.R. 
Procedure Except Sterilization and/or D&C) as a low-volume MS-DRG, 
which, using data from the December 2014 update of the FY 2014 MedPAR 
file, had more than 10 cases. For this final rule, using data from the 
March 2015 update of the FY 2014 MedPAR file, there continue to be 7 
MS-DRGs that contain fewer than 10 cases, as reflected in the table 
below. Under the MS-DRGs, we have fewer low-volume DRGs than under the 
CMS DRGs because we no longer have separate MS-DRGs for patients aged 0 
to 17 years. With the exception of newborns, we previously separated 
some MS-DRGs based on whether the patient was age 0 to 17 years or age 
17 years and older. Other than the age split, cases grouping to these 
MS-DRGs are identical. The MS-DRGs for patients aged 0 to 17 years 
generally have very low volumes because children are typically 
ineligible for Medicare. In the past, we have found that the low volume 
of cases for the pediatric MS-DRGs could lead to significant year-to-
year instability in their relative weights. Although we have always 
encouraged non-Medicare payers to develop weights applicable to their 
own patient populations, we have received frequent complaints from 
providers about the use of the Medicare relative weights in the 
pediatric population. We believe that eliminating this age split in the 
MS-DRGs will provide more stable payment for pediatric cases by 
determining their payment using adult cases that are much higher in 
total volume. Newborns are unique and require separate MS-DRGs that are 
not mirrored in the adult population. Therefore, it remains necessary 
to retain separate MS-DRGs for newborns. All of the low-volume MS-DRGs 
listed below are for newborns. For FY 2016, because we do not have 
sufficient MedPAR data to set accurate and stable cost relative weights 
for the following low-volume MS-DRGs, as we proposed, we computed 
relative weights for the low-volume MS-DRGs by adjusting their final FY 
2015 relative weights by the percentage change in the average weight of 
the cases in other MS-DRGs. The crosswalk table is shown below:

------------------------------------------------------------------------
    Low-volume  MS-DRG         MS-DRG Title        Crosswalk to MS-DRG
------------------------------------------------------------------------
789......................  Neonates, Died or    Final FY 2015 relative
                            Transferred to       weight (adjusted by
                            Another Acute Care   percent change in
                            Facility.            average weight of the
                                                 cases in other MS-
                                                 DRGs).
790......................  Extreme Immaturity   Final FY 2015 relative
                            or Respiratory       weight (adjusted by
                            Distress Syndrome,   percent change in
                            Neonate.             average weight of the
                                                 cases in other MS-
                                                 DRGs).
791......................  Prematurity with     Final FY 2015 relative
                            Major Problems.      weight (adjusted by
                                                 percent change in
                                                 average weight of the
                                                 cases in other MS-
                                                 DRGs).
792......................  Prematurity without  Final FY 2015 relative
                            Major Problems.      weight (adjusted by
                                                 percent change in
                                                 average weight of the
                                                 cases in other MS-
                                                 DRGs).
793......................  Full-Term Neonate    Final FY 2015 relative
                            with Major           weight (adjusted by
                            Problems.            percent change in
                                                 average weight of the
                                                 cases in other MS-
                                                 DRGs).
794......................  Neonate with Other   Final FY 2015 relative
                            Significant          weight (adjusted by
                            Problems.            percent change in
                                                 average weight of the
                                                 cases in other MS
                                                 DRGs).
795......................  Normal Newborn.....  Final FY 2015 relative
                                                 weight (adjusted by
                                                 percent change in
                                                 average weight of the
                                                 cases in other MS-
                                                 DRGs).
------------------------------------------------------------------------

    Comment: One commenter stated that the relative weight for MS-DRG 
014 (Allogeneic Bone Marrow Transplant) may be understated due to the 
omission of costs and charges associated with revenue code 0819 which 
was not included in column 3 of the table of cost report lines and 
revenue codes on pages 24412 and 24413 of the FY 2016 IPPS/LTCH PPS 
proposed rule. This commenter also noted that, in the FY 2016 IPPS/LTCH 
PPS proposed rule (80 FR 24411), CMS removes claims from the relative 
weight calculation that had an amount in the total charge field that 
differed by more than $10 from the sum of the routine day charges, 
intensive care charges, pharmacy charges, special equipment charges, 
therapy services charges, operating room charges, cardiology charges, 
laboratory charges, radiology charges, other service charges, labor and 
delivery charges, inhalation therapy charges, emergency room charges, 
blood charges, and anesthesia charges. The commenter asserted that if 
revenue code 0819 is not included in the mapped charges, a difference 
of greater than $10 would always result on any claim with revenue code 
0819, causing the claims with revenue code 0819 to be deleted from the 
dataset, and the relative weight for MS-DRG 014 to be understated. 
Another commenter noted that, in response to its question in the past 
regarding the absence of revenue code 0819 from the cost centers 
crosswalk table, CMS had indicated that the national Blood and Blood 
Products CCR is what is used to reduce revenue code 0819 line item 
charges to costs on inpatient claims. The commenter believed this 
should be reflected in the table in the final rule so that hospitals 
are able to use this information to evaluate their internal cost 
reporting practices. The commenter also mentioned the variability in 
cost reporting among hospitals related to the Blood and Blood Products 
cost centers, and noted that some hospitals report

[[Page 49430]]

costs and charges related to stem cell transplantation on lines 62 or 
63 of the Medicare cost report Form CMS-2552-10, while other hospitals 
report these costs and charges on line 112, ``Other Organ 
Acquisition''. The commenter asserted that CMS' use of a cost center 
group that may have no relation to where and how donor related charges 
and costs are actually being captured by providers could be one 
explanation for why the payment rate for MS-DRG 014 does not 
appropriately account for all donor related costs incurred by providers 
who perform stem cell transplantations. The commenter expressed hope 
that, as CMS reviews the use of nonstandard and subscripted cost 
centers, it also will undertake a review of where and how SCT charges 
and costs associated with donor related services reported through 
revenue code 0819 are being accounted for by hospitals in the cost 
reports. The commenter also was concerned there are no donor source 
codes in the ICD-10-PCS coding system and urged CMS to address this 
matter as soon as possible so that provider reporting of donor source 
codes is not interrupted with the implementation of ICD-10.
    Response: Section 90.3.3.A.1 of Chapter 3 of the Medicare Claims 
Processing Manual states that payment for acquisition services 
associated with allogeneic stem cell transplants is included in the MS-
DRG payment for the allogeneic stem cell transplant when the transplant 
occurs in the inpatient setting. The MAC will not make separate payment 
for these acquisition services because hospitals may bill and receive 
payment only for services provided to a Medicare beneficiary who is the 
recipient of the stem cell transplant and whose illness is being 
treated with the stem cell transplant. Unlike the acquisition costs of 
solid organs for transplant (for example, hearts and kidneys), which 
are paid on a reasonable cost basis, acquisition costs for allogeneic 
stem cells are included in the prospective payment. We note that, in 
each proposed and final IPPS rule, in the description of the 
calculation of the MS-DRG relative weights, we state that organ 
acquisition costs are paid on a reasonable cost basis, and therefore, 
we deduct the acquisition charges from the total charges on each 
transplant bill that showed acquisition charges before computing the 
average cost for each MS-DRG. (We refer readers to the FY 2016 IPPS/
LTCH PPS proposed rule 80 FR 24410 through 24411.) Under section 
90.3.3.A.2 of the Medicare Claims Processing Manual, hospitals are to 
identify stem cell acquisition charges for allogeneic bone marrow/stem 
cell transplants separately by using revenue code 0819 (Other Organ 
Acquisition).
    Accordingly, charges for allogeneic bone marrow transplants are, in 
fact, included in the MS-DRG relative weights calculation, in the 
``Blood and Blood Products'' CCR. That is, for claims that group into 
MS-DRG 014, CMS includes the acquisition charges in the blood charges 
and uses the Blood and Blood Products CCR to adjust those charges to 
cost. Therefore, contrary to the concern expressed by the first 
commenter, the relative weight for MS-DRG 014 does reflect costs and 
charges associated with revenue code 0819, and claims containing 
revenue code 0819 are not systematically deleted from the dataset. In 
this final rule and for subsequent rules, we are modifying the 
crosswalk table for the entry of the Blood and Blood Products cost 
center group to include revenue code 0819, but we are specifying that 
only the charges associated with MS-DRG 014 are mapped to the Blood and 
Blood Products cost center. We are continuing to exclude other 081x 
revenue codes from the crosswalk table, as these codes are associated 
with Organ Acquisition, which are otherwise excluded from the relative 
weights calculation because, as explained above, organ acquisition 
costs are paid on a reasonable cost basis and not under the prospective 
payment rate.
    Regarding the comment which stated that some hospitals report costs 
and charges related to stem cell transplantation on lines 62 or 63 of 
the Medicare cost report Form CMS-2552-10, while other hospitals report 
these costs and charges on line 112, ``Other Organ Acquisition,'' we 
note that because the charges associated with revenue code 0819 are 
being mapped by CMS to the Blood and Blood Products cost centers from 
line 62 (Whole Blood and Packed Red Blood Cells) and line 63 (Blood 
Storing, Processing, and Transfusions), the appropriate cost centers 
for hospitals to report the attending costs of allogeneic bone marrow/
stem cell transplants are lines 62 and 63 of CMS Form-2552-10. (The 
cost report instructions for Worksheet A in the Provider Reimbursement 
Manual (PRM), Part II (Pub. 15-2, Chapter 40, Section 4013, state that 
hospitals are to include on line 62 ``the direct expenses incurred in 
obtaining blood directly from donors as well as obtaining whole blood, 
packed red blood cells, and blood derivatives,'' and ``the processing 
fee charged by suppliers.'' We also note that line 112, along with the 
other organ transplant lines 105 through 111, are excluded from the 
calculation of the CCRs and the IPPS relative weights (and therefore 
are not listed on the crosswalk table). Consequently, any costs related 
to charges billed under revenue code 0819 that are reported on line 112 
would not be captured in the MS-DRG relative weight calculations.
    Regarding the commenter's concern that donor related costs are not 
being properly reported on the Medicare cost report, and that CMS 
should undertake a review of where and how donor related services 
reported through revenue code 0819 are being accounted for by hospitals 
on the cost reports, we believe this is related to overall 
inconsistencies in cost reporting, particularly with nonstandard cost 
centers, which we discuss in section II.E.2. of this final rule. As we 
state in response to comments received in that section, we appreciate 
the comments that stakeholders have submitted and will continue to 
explore ways in which CMS can improve the accuracy of the cost report 
data and the calculation of CCRs used in the cost estimation process. 
To the extent possible, we will continue to seek stakeholder input in 
an effort to limit the impact on hospitals.
    Regarding the commenter's concerns that there are no donor source 
codes under ICD-10-PCS, we note that the donor source is an integral 
part of all transplant and transfusion codes within ICD-10-PCS. Donor 
source information is captured in the seventh character qualifiers. For 
example, the root term ``Transplantation'' provides the following 
seventh character qualifier values as options to describe donor source: 
Syngeneic (live related); Allogeneic (live non-related); and Zooplastic 
(animal). We note that bone marrow transplant procedures are coded to 
the root operation ``Transfusion'' as stated in the ICD-10-PCS 
Reference Manual (which is available on the CMS Web site at: http://www.cms.gov/Medicare/Coding/ICD10/2016-ICD-10-PCS-and-GEMs.html). The 
root term ``Transfusion'' provides the seventh character qualifier 
values of Autologous and Nonautologous as options to describe donor 
source. For specific questions related to coding for transplants and 
transfusions, we refer readers to the American Hospital Association 
(AHA). The AHA Central OfficeTM is the national 
clearinghouse for medical coding advice. Coding inquiries may be 
directed to the following AHA Web site: http://www.CodingClinicAdvisor.com.
    Comment: One commenter pointed out that the proposed MS-DRG 
relative weight for MS-DRG 619 (O.R. Procedures for Obesity with MCC) 
is 2.8830, which is less than the MS-DRG relative weight for this MS-
DRG for FY

[[Page 49431]]

2015 of 3.2890. The commenter stated that, while this category 
represents a small percentage of the total bariatric procedures 
performed on Medicare beneficiaries, patients with conditions described 
in this MS-DRG are at the greatest risk for readmission and require the 
greatest support and coordination of postoperative resources to ensure 
a safe and efficient recovery, and that providers will be unable to 
provide such support and resources if payment is so drastically 
reduced. The commenter asked CMS to reconsider the reduction, and 
consider an increase of 1.1 percent in the relative weight for MS-DRG 
619 in keeping with Hospital IQR Program and meaningful electronic 
health record (EHR) user incentives. The commenter asked that, for 
hospitals not participating in the Hospital IQR Program or the EHR 
Incentive Program, CMS keep the relative weight for MS-DRG 619 neutral.
    Response: We note that, while the proposed FY 2016 relative weight 
for MS-DRG 619 was 2.8830, the final FY 2016 relative weight for MS-DRG 
619 is 2.9418 (as reflected in Table 5 associated with this final rule 
and available on the CMS Web site at: http://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/AcuteInpatientPPS/FY2016-IPPS-Final-Rule-Home-Page.html). While we are sympathetic to the commenter's 
concerns, we note that the reduction in the relative weight from FY 
2015 to FY 2016 is a function of the relative weight calculation, as 
described in section II.H. of the FY 2016 IPPS/LTCH PPS proposed rule 
and this final rule, which is comprised of hospitals' billed charges 
for MS-DRG 619 and the costs reported on hospitals' cost reports. The 
reduction in the relative weight may be attributed to the change in the 
number of cases and average charges for MS-DRG 619 used to develop the 
relative weight for FY 2015 and the final FY 2016 relative weight. 
Specifically, we observed that FY 2015 cases were 896, and FY 2016 
cases are 1,037, while FY 2015 average charges were $90,806, and FY 
2016 average charges are $84,592.
    We are finalizing the methodology for recalibration of the MS-DRG 
relative weights specified in this final rule for FY 2016 as proposed.
4. Discussion and Acknowledgement of Public Comments Received on 
Expanding the Bundled Payments for Care Improvement (BPCI) Initiative
a. Background
    Since 2011, CMS has been working to develop and test models of 
bundling Medicare payments under the authority of section 1115A of the 
Act. Through these models, CMS plans to evaluate whether bundled 
payments result in higher quality and more coordinated care at a lower 
cost to Medicare. CMS is currently testing the Bundled Payments for 
Care Improvement (BPCI) initiative. Under this initiative, 
organizations enter into payment arrangements that include financial 
and performance accountability for episodes of care.
    The BPCI initiative is comprised of four related payment models, 
which link payments for multiple services that Medicare beneficiaries 
receive during an episode of care into a bundled payment. Episodes of 
care under the BPCI initiative begin with either (1) an inpatient 
hospital stay or (2) postacute care services following a qualifying 
inpatient hospital stay. More information on the four models under the 
BPCI initiative can be found on the CMS Center for Medicare and 
Medicaid Innovation's Web site at: http://innovation.cms.gov/initiatives/bundled-payments/.
    In the FY 2016 IPPS/LTCH PPS proposed rule (80 FR 24414 through 
24418), we presented a discussion of the models in the BPCI initiative 
and solicited public comments regarding policy and operational issues 
related to a potential expansion of the BPCI initiative in the future. 
Section 1115A(c) of the Act, as added by section 3021 of the Affordable 
Care Act, provides the Secretary with the authority to expand through 
rulemaking the duration and scope of a model that is being tested under 
section 1115A(b) of the Act, such as the BPCI initiative (including 
implementation on a nationwide basis), if the following findings are 
made, taking into account the evaluation of the model under section 
1115A(b)(4) of the Act: (1) The Secretary determines that the expansion 
is expected to either reduce Medicare spending without reducing the 
quality of care or improve the quality of patient care without 
increasing spending; (2) the CMS Chief Actuary certifies that the 
expansion would reduce (or would not result in any increase in) net 
Medicare program spending; and (3) the Secretary determines that the 
expansion would not deny or limit the coverage or provision of Medicare 
benefits. The decision of whether or not to expand will be made by the 
Secretary in coordination with CMS and the Office of the Chief Actuary 
based on whether findings about the initiative meet the statutory 
criteria for expansion under section 1115A(c) of the Act. Given that 
further evaluation of the BPCI initiative is needed to determine its 
impact on both Medicare cost and quality of care, we did not propose an 
expansion of any models within the initiative or any policy changes 
associated with it in the FY 2016 IPPS/LTCH PPS proposed rule.
    Consistent with our continuing commitment to engaging stakeholders 
in CMS' work, we sought public comments on a variety of issues to 
broaden and deepen our understanding of the important issues and 
challenges regarding bundled payments in the current health care 
marketplace. Among other subject-matter areas, we sought public 
comments on the scope of any expansion, episode definitions, bundled 
payment amounts, data needs, and the use of health information 
technology. In response to our solicitation, we received over 75 timely 
and informative public comments suggesting matters to consider in a 
potential future expansion of the BPCI initiative, including the 
evaluation of the BPCI models, further testing of the BPCI initiative, 
target pricing methodologies, data collection and reporting, quality 
measures, episode definitions, payment methodologies, and precedence 
rules. We appreciate the commenters' views and recommendations. We will 
consider the public comments we received if the BPCI initiative is 
expanded in the future through rulemaking.

I. Add-On Payments for New Services and Technologies for FY 2016

1. Background
    Sections 1886(d)(5)(K) and (L) of the Act establish a process of 
identifying and ensuring adequate payment for new medical services and 
technologies (sometimes collectively referred to in this section as 
``new technologies'') under the IPPS. Section 1886(d)(5)(K)(vi) of the 
Act specifies that a medical service or technology will be considered 
new if it meets criteria established by the Secretary after notice and 
opportunity for public comment. Section 1886(d)(5)(K)(ii)(I) of the Act 
specifies that a new medical service or technology may be considered 
for new technology add-on payment if, based on the estimated costs 
incurred with respect to discharges involving such service or 
technology, the DRG prospective payment rate otherwise applicable to 
such discharges under this subsection is inadequate. We note that, 
beginning with discharges occurring in FY 2008, CMS transitioned from 
CMS-DRGs to MS-DRGs.
    The regulations at 42 CFR 412.87 implement these provisions and 
specify three criteria for a new medical service or technology to 
receive the additional payment: (1) The medical service or

[[Page 49432]]

technology must be new; (2) the medical service or technology must be 
costly such that the DRG rate otherwise applicable to discharges 
involving the medical service or technology is determined to be 
inadequate; and (3) the service or technology must demonstrate a 
substantial clinical improvement over existing services or 
technologies. Below we highlight some of the major statutory and 
regulatory provisions relevant to the new technology add-on payment 
criteria as well as other information. For a complete discussion on the 
new technology add-on payment criteria, we refer readers to the FY 2012 
IPPS/LTCH PPS final rule (76 FR 51572 through 51574).
    Under the first criterion, as reflected in Sec.  412.87(b)(2), a 
specific medical service or technology will be considered ``new'' for 
purposes of new medical service or technology add-on payments until 
such time as Medicare data are available to fully reflect the cost of 
the technology in the MS-DRG weights through recalibration. We note 
that we do not consider a service or technology to be new if it is 
substantially similar to one or more existing technologies. That is, 
even if a technology receives a new FDA approval, it may not 
necessarily be considered ``new'' for purposes of new technology add-on 
payments if it is ``substantially similar'' to a technology that was 
approved by FDA and has been on the market for more than 2 to 3 years. 
In the FY 2006 IPPS final rule (70 FR 47351) and the FY 2010 IPPS/RY 
2010 LTCH PPS final rule (74 FR 43813 and 43814), we explained our 
policy regarding substantial similarity in detail.
    Under the second criterion, Sec.  412.87(b)(3) further provides 
that, to be eligible for the add-on payment for new medical services or 
technologies, the MS-DRG prospective payment rate otherwise applicable 
to the discharge involving the new medical services or technologies 
must be assessed for adequacy. Under the cost criterion, consistent 
with the formula specified in section 1886(d)(5)(K)(ii)(I) of the Act, 
to assess the adequacy of payment for a new technology paid under the 
applicable MS-DRG prospective payment rate, we evaluate whether the 
charges for cases involving the new technology exceed certain threshold 
amounts. We update the thresholds in Table 10 of each final rule that 
apply for the upcoming fiscal year. Table 10 that was released with the 
FY 2015 IPPS/LTCH PPS final rule contains the final thresholds that we 
used to evaluate applications for new medical service and new 
technology add-on payments for FY 2016. We refer readers to the CMS Web 
site at: http://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/AcuteInpatientPPS/FY2015-IPPS-Final-Rule-Home-Page-Items/FY2015-Final-Rule-Tables.html to download and view Table 10.
    In the September 7, 2001 final rule that established the new 
technology add-on payment regulations (66 FR 46917), we discussed the 
issue of whether the Health Insurance Portability and Accountability 
Act (HIPAA) Privacy Rule at 45 CFR parts 160 and 164 applies to claims 
information that providers submit with applications for new medical 
service and new technology add-on payments. We refer readers to the FY 
2012 IPPS/LTCH PPS final rule (76 FR 51573) for complete information on 
this issue.
    Under the third criterion, Sec.  412.87(b)(1) of our existing 
regulations provides that a new technology is an appropriate candidate 
for an additional payment when it represents an advance that 
substantially improves, relative to technologies previously available, 
the diagnosis or treatment of Medicare beneficiaries. For example, a 
new technology represents a substantial clinical improvement when it 
reduces mortality, decreases the number of hospitalizations or 
physician visits, or reduces recovery time compared to the technologies 
previously available. (We refer readers to the September 7, 2001 final 
rule for a more detailed discussion of this criterion (66 FR 46902).)
    The new medical service or technology add-on payment policy under 
the IPPS provides additional payments for cases with relatively high 
costs involving eligible new medical services or technologies while 
preserving some of the incentives inherent under an average-based 
prospective payment system. The payment mechanism is based on the cost 
to hospitals for the new medical service or technology. Under Sec.  
412.88, if the costs of the discharge (determined by applying cost-to-
charge ratios (CCRs) as described in Sec.  412.84(h)) exceed the full 
DRG payment (including payments for IME and DSH, but excluding outlier 
payments), Medicare will make an add-on payment equal to the lesser of: 
(1) 50 percent of the estimated costs of the new technology or medical 
service (if the estimated costs for the case including the new 
technology or medical service exceed Medicare's payment); or (2) 50 
percent of the difference between the full DRG payment and the 
hospital's estimated cost for the case. Unless the discharge qualifies 
for an outlier payment, the additional Medicare payment is limited to 
the full MS-DRG payment plus 50 percent of the estimated costs of the 
new technology or new medical service.
    Section 503(d)(2) of Public Law 108-173 provides that there shall 
be no reduction or adjustment in aggregate payments under the IPPS due 
to add-on payments for new medical services and technologies. 
Therefore, in accordance with section 503(d)(2) of Public Law 108-173, 
add-on payments for new medical services or technologies for FY 2005 
and later years have not been subjected to budget neutrality.
    In the FY 2009 IPPS final rule (73 FR 48561 through 48563), we 
modified our regulations at Sec.  412.87 to codify our longstanding 
practice of how CMS evaluates the eligibility criteria for new medical 
service or technology add-on payment applications. That is, we first 
determine whether a medical service or technology meets the newness 
criterion, and only if so, do we then make a determination as to 
whether the technology meets the cost threshold and represents a 
substantial clinical improvement over existing medical services or 
technologies. We amended Sec.  412.87(c) to specify that all applicants 
for new technology add-on payments must have FDA approval or clearance 
for their new medical service or technology by July 1 of each year 
prior to the beginning of the fiscal year that the application is being 
considered.
    The Council on Technology and Innovation (CTI) at CMS oversees the 
agency's cross-cutting priority on coordinating coverage, coding and 
payment processes for Medicare with respect to new technologies and 
procedures, including new drug therapies, as well as promoting the 
exchange of information on new technologies and medical services 
between CMS and other entities. The CTI, composed of senior CMS staff 
and clinicians, was established under section 942(a) of Public Law 108-
173. The Council is co-chaired by the Director of the Center for 
Clinical Standards and Quality (CCSQ) and the Director of the Center 
for Medicare (CM), who is also designated as the CTI's Executive 
Coordinator.
    The specific processes for coverage, coding, and payment are 
implemented by CM, CCSQ, and the local claims-payment contractors (in 
the case of local coverage and payment decisions). The CTI supplements, 
rather than replaces, these processes by working to assure that all of 
these activities reflect the agency-wide priority to promote high-
quality, innovative care. At the same time, the CTI also works to 
streamline, accelerate, and improve coordination of these processes to 
ensure that they remain up to date as new issues arise.

[[Page 49433]]

To achieve its goals, the CTI works to streamline and create a more 
transparent coding and payment process, improve the quality of medical 
decisions, and speed patient access to effective new treatments. It is 
also dedicated to supporting better decisions by patients and doctors 
in using Medicare-covered services through the promotion of better 
evidence development, which is critical for improving the quality of 
care for Medicare beneficiaries.
    To improve the understanding of CMS' processes for coverage, 
coding, and payment and how to access them, the CTI has developed an 
``Innovator's Guide'' to these processes. The intent is to consolidate 
this information, much of which is already available in a variety of 
CMS documents and in various places on the CMS Web site, in a user-
friendly format. This guide was published in 2010 and is available on 
the CMS Web site at: http://www.cms.gov/CouncilonTechInnov/Downloads/InnovatorsGuide5_10_10.pdf.
    As we indicated in the FY 2009 IPPS final rule (73 FR 48554), we 
invite any product developers or manufacturers of new medical services 
or technologies to contact the agency early in the process of product 
development if they have questions or concerns about the evidence that 
would be needed later in the development process for the agency's 
coverage decisions for Medicare.
    The CTI aims to provide useful information on its activities and 
initiatives to stakeholders, including Medicare beneficiaries, 
advocates, medical product manufacturers, providers, and health policy 
experts. Stakeholders with further questions about Medicare's coverage, 
coding, and payment processes, or who want further guidance about how 
they can navigate these processes, can contact the CTI at 
[email protected].
    We note that applicants for add-on payments for new medical 
services or technologies for FY 2017 must submit a formal request, 
including a full description of the clinical applications of the 
medical service or technology and the results of any clinical 
evaluations demonstrating that the new medical service or technology 
represents a substantial clinical improvement, along with a significant 
sample of data to demonstrate that the medical service or technology 
meets the high-cost threshold. Complete application information, along 
with final deadlines for submitting a full application, will be posted 
as it becomes available on the CMS Web site at: http://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/AcuteInpatientPPS/newtech.html. To allow interested parties to identify the new medical 
services or technologies under review before the publication of the 
proposed rule for FY 2017, the CMS Web site also will post the tracking 
forms completed by each applicant.
2. Public Input Before Publication of a Notice of Proposed Rulemaking 
on Add-On Payments
    Section 1886(d)(5)(K)(viii) of the Act, as amended by section 
503(b)(2) of Public Law 108-173, provides for a mechanism for public 
input before publication of a notice of proposed rulemaking regarding 
whether a medical service or technology represents a substantial 
clinical improvement or advancement. The process for evaluating new 
medical service and technology applications requires the Secretary to--
     Provide, before publication of a proposed rule, for public 
input regarding whether a new service or technology represents an 
advance in medical technology that substantially improves the diagnosis 
or treatment of Medicare beneficiaries;
     Make public and periodically update a list of the services 
and technologies for which applications for add-on payments are 
pending;
     Accept comments, recommendations, and data from the public 
regarding whether a service or technology represents a substantial 
clinical improvement; and
     Provide, before publication of a proposed rule, for a 
meeting at which organizations representing hospitals, physicians, 
manufacturers, and any other interested party may present comments, 
recommendations, and data regarding whether a new medical service or 
technology represents a substantial clinical improvement to the 
clinical staff of CMS.
    In order to provide an opportunity for public input regarding add-
on payments for new medical services and technologies for FY 2016 prior 
to publication of the FY 2016 IPPS/LTCH PPS proposed rule, we published 
a notice in the Federal Register on November 21, 2014 (79 FR 69490), 
and held a town hall meeting at the CMS Headquarters Office in 
Baltimore, MD, on February 3, 2015. In the announcement notice for the 
meeting, we stated that the opinions and alternatives provided during 
the meeting would assist us in our evaluations of applications by 
allowing public discussion of the substantial clinical improvement 
criterion for each of the FY 2016 new medical service and technology 
add-on payment applications before the publication of the FY 2016 IPPS/
LTCH PPS proposed rule.
    Approximately 95 individuals registered to attend the town hall 
meeting in person, while additional individuals listened over an open 
telephone line. We also live-streamed the town hall meeting and posted 
the town hall on the CMS YouTube Web page at: https://www.youtube.com/watch?v=dn-R5KGQu-M. We considered each applicant's presentation made 
at the town hall meeting, as well as written comments submitted on the 
applications that were received by the due date of January 19, 2015, in 
our evaluation of the new technology add-on payment applications for FY 
2016 in the proposed rule.
    In response to the published notice and the New Technology Town 
Hall meeting, we received written comments regarding the applications 
for FY 2016 new technology add-on payments. We summarized these 
comments in the preamble of the proposed rule or, if applicable, 
indicated that there were no comments received, at the end of each 
discussion of the individual applications in the proposed rule. We are 
not reprinting those summations in this final rule and refer readers to 
the FY 2016 IPPS/LTCH PPS proposed rule for this discussion.
    We also received public comments in response to the proposed rule 
relating to topics such as marginal cost factors for new technology 
add-on payments, mapping new technologies to the appropriate MS-DRG, 
additional criteria for substantial clinical improvement, and changing 
the newness criterion. Because we did not request public comments nor 
propose to make any changes to any of the issues above, we are not 
summarizing these public comments nor responding to them in this final 
rule.
    Comment: One commenter stated that it is not appropriate for CMS to 
continue to add requirements or to impose standards that exceed 
realistic requirements for clinical trials. The commenter cited the 
WATCHMAN[supreg] System as an example where CMS suggested that 
substantial clinical improvement should be based on a superiority trial 
rather than the noninferiority trial that was used.
    Response: We received a similar public comment last year and 
responded to it in the FY 2015 IPPS/LTCH PPS final rule. We refer the 
readers to the FY 2015 IPPS/LTCH PPS final rule (79 FR 49925 through 
49926) for a complete response to this issue.

[[Page 49434]]

3. Implementation of ICD-10-PCS Section ``X'' Codes for Certain New 
Medical Services and Technologies for FY 2016
    As discussed in section II.G.1.a. of the preamble of this final 
rule, HIPAA covered entities are required, as of October 1, 2015, to 
use the ICD-10 coding system (ICD-10-PCS codes for procedures and ICD-
10-CM codes for diagnosis), instead of the ICD-9-CM coding system, to 
report diagnoses and procedures for Medicare hospital inpatient 
services provided to Medicare beneficiaries as classified under the MS-
DRG system and paid for under the IPPS. HIPAA covered entities must 
continue to use ICD-9-CM codes and coding guidelines through September 
30, 2015. We refer readers to section II.G.1.a. of the preamble of this 
final rule for a complete discussion of the adoption of the ICD-10 
coding system.
    As part of the transition to the ICD-10-CM/PCS coding system, at 
the September 23-24, 2014 ICD-10 Coordination and Maintenance Committee 
meeting, CMS received a request to create a new section within the ICD-
10-PCS to capture new medical services and technologies that might not 
appropriately align with the current structure of the ICD-10-PCS codes. 
Examples of these types of new medical services and technologies 
included drugs, biologicals, and newer medical devices being tested in 
clinical trials that are not currently captured within the ICD-9-CM or 
the ICD-10-PCS. The requestor indicated that there may be a need to 
identify and report these technologies and inpatient services for 
purposes of approving new technology add-on payment applications and 
initiating subsequent new technology add-on payments based on approval 
or tracking and analyzing the use of these new technologies and 
services. Although several commenters have opposed including these 
types of technologies and services within the current structure of the 
ICD-10-PCS codes during past ICD-10 Coordination and Maintenance 
Committee meetings, as well as in public comments, CMS has evaluated 
these suggestions and considered them to be valid. As a result, CMS has 
created a new component within the ICD-10-PCS codes, labeled Section 
``X'' codes, to identify and describe these new technologies and 
services. The new Section ``X'' codes identify new medical services and 
technologies that are not usually captured by coders, or that do not 
usually have the desired specificity within the current ICD-10-PCS 
structure required to capture the use of these new services and 
technologies. As mentioned earlier, examples of these types of services 
and technologies include specific drugs, biologicals, and newer medical 
devices being tested in clinical trials. The new Section ``X'' codes 
within the ICD-10-PCS structure will be implemented on October 1, 2015, 
and will be used to identify new technologies and medical services 
approved under the new technology add-on payment policy for payment 
purposes beginning October 1, 2015. The Section ``X'' codes also will 
be used to identify procedures or services that are not commonly 
captured within the definitions and descriptions included in most 
coding systems or procedures or services that require definitions and 
descriptions that contain greater detail or specificity, which may be 
needed for a variety of health care data needs. An overview of Section 
``X'' codes was provided at the March 18-19, 2015 ICD-10 Coordination 
and Maintenance Committee meeting. We also have posted an article on 
the CMS Web site that explains the creation and use of ICD-10-PCS 
Section ``X'' codes. This article can be found on the CMS 2016 ICD-10-
PCS and GEMs Web site at http://www.cms.gov/Medicare/Coding/ICD10/2016-ICD-10-PCS-and-GEMs.html. Further information regarding the new Section 
``X'' codes and their use within the ICD-10-PCS can be found on the CMS 
Web site at: http://www.cms.gov/Medicare/Coding/ICD9ProviderDiagnosticCodes/ICD-9-CM-C-and-M-Meeting-Materials.html 
through the ``CMS Coordination and Maintenance Committee Meeting'' 
link.
    In addition, on June 18, 2015, CMS held a National ICD-10 
Teleconference (Preparing for Implementation and New ICD-10-PCS Section 
``X'' MLN Connects National Provider Call) to explain the Section ``X'' 
codes under the ICD-10. The agenda, slides, and audio from this 
teleconference are posted on the CMS Web site at: http://www.cms.gov/Outreach-and-Education/Outreach/NPC/National-Provider-Calls-and-Events-Items/2015-06-18-ICD10.html?DLPage=1&DLSort=0&DLSortDir=descending.
    As stated earlier, the ICD-10-PCS includes a new section containing 
the new Section ``X'' codes, which will be used beginning with 
discharges occurring on or after October 1, 2015. Decisions regarding 
changes to ICD-10-PCS Section ``X'' codes will be handled in the same 
manner as the decisions for all of the other ICD-10-PCS code changes. 
That is, proposals to create, delete, or revise Section ``X'' codes 
under the ICD-10-PCS structure will be referred to the ICD-10 
Coordination and Maintenance Committee. In addition, several of the new 
medical services and technologies that have been, or may be, approved 
for new technology add-on payments may now, and in the future, be 
assigned a Section ``X'' code within the structure of the ICD-10-PCS. 
The FY 2016 ICD-10-PCS, which includes the new Section ``X'' codes, was 
posted in June 2015 via the Internet on the CMS Web site at: http://www.cms.gov/Medicare/Coding/ICD10/2016-ICD-10-PCS-and-GEMs.html. We 
also posted the FY 2016 ICD-10-PCS Guidelines on this CMS Web site that 
also includes guidelines for ICD-10-PCS ``X'' codes. We encourage 
providers to view the material provided on ICD-10-PCS Section ``X'' 
codes.
    Comment: Several commenters supported the creation of the new ICD-
10-PCS Section ``X'' codes as a means to more specifically identify new 
technologies or more precise information about certain services. The 
commenters recognized the challenges of maintaining a partial code 
freeze while at the same time finding a way to capture new procedures. 
One commenter who supported the creation of the new Section ``X'' codes 
to identify new medical services and technologies stated that it was 
important to have a more robust coding system that will allow for 
recognition of more technologies, procedures, and variations in 
patients' conditions.
    Another commenter recognized the need to conserve code values 
within the regular ICD-10-PCS sections, as well as the exponential 
effect that adding a new value has on the large number of codes, and 
noted the importance of using Section ``X'' codes specifically for 
certain types of new technologies. The commenter stated that Section 
``X'' codes are especially important to identify drugs and 
intraoperative supplies related to MS-DRG new technology add-on 
payments.
    Response: We appreciate the commenters' support.
    Comment: Several commenters expressed concern that payers may 
mistakenly consider ICD-10-PCS Section ``X'' codes as interchangeable 
with CPT Category III codes. The commenters stated that, although CPT 
Category III codes also represent emerging technologies, the 
technologies lack substantive support in professional literature, and 
the codes used for these technologies often describe noncovered 
procedures that are experimental or investigational. In contrast, the 
commenter recognized that ICD-10-PCS Section ``X'' codes describe new 
technologies or services that frequently are FDA approved. However, the

[[Page 49435]]

commenters asked that CMS clarify that ICD-10-PCS Section ``X'' codes 
will not be used to specifically identify experimental or unproven 
procedures.
    Response: Section ``X'' codes were created to more specifically 
identify new technologies, procedures that have historically not been 
captured through ICD-9-CM codes, or to more precisely describe 
information on a specific procedure or technology than is found with 
the other sections of ICD-10-PCS. Section ``X'' codes were not created, 
nor intended to be used, to identify experimental or investigational 
procedures.
    Comment: Several commenters expressed concerns about the decision 
to create new codes during the partial code freeze, in particular the 
creation of the ICD-10-PCS Section ``X'' during the partial code 
freeze. The commenters believed that it would be more appropriate to 
delay the implementation of this section of the ICD-10-PCS and the use 
of Section ``X'' codes until after the ICD-10 coding system is 
implemented and the partial code freeze ends. The commenters also 
requested clarifications on how the new Section ``X'' codes would be 
used.
    Response: We acknowledge that it has been a challenge for CMS to 
implement the ICD-10-PCS/CM coding system, particularly in light of the 
partial code freeze and several delays of the implementation of ICD-10. 
However, the partial code freeze has allowed sufficient time and the 
ability to capture new technologies or new medical services under the 
new coding system. Many participants at the ICD-10 Coordination and 
Maintenance Committee have voiced opposition to the creation of any new 
codes during the partial code freeze. Other participants have actively 
encouraged the creation of more code updates beyond those that capture 
new technologies or new medical services. We have given consideration 
to all of the public comments presented at the ICD-10 Coordination and 
Maintenance Committee meetings and have attempted to make updates to 
the ICD-10-CM/PCS in a manner that is most appropriate and results in 
less burden on the majority of users. Any updates to ICD-10-CM/PCS, 
including updates to the Section ``X'' codes, will be presented at 
future ICD-10 Coordination and Maintenance Committee meetings for 
public comments. For those individuals who are interested in 
participating in future ICD-10 Coordination and Maintenance Committee 
meetings, information on the Committee can be found on the CMS Web site 
at: http://www.cms.gov/Medicare/Coding/ICD9ProviderDiagnosticCodes/meetings.html. We encourage public participation at these meetings 
either in person, by conference lines, or by the livestream provided by 
CMS. As discussed earlier, CMS has posted the FY 2016 ICD-10-PCS 
guidelines, which include guidelines on the use of Section ``X'' codes 
and an article explaining why ICD-10-PCS Section ``X'' codes were 
created and how to use them on the CMS Web site. We believe that this 
detailed information will assist coders in using the new Section ``X'' 
codes.
4. FY 2016 Status of Technologies Approved for FY 2015 Add-On Payments
a. Glucarpidase (Voraxaze[supreg])
    BTG International, Inc. submitted an application for new technology 
add-on payments for Glucarpidase (Voraxaze[supreg]) for FY 2013. 
Glucarpidase is used in the treatment of patients who have been 
diagnosed with toxic methotrexate (MTX) concentrations as of result of 
renal impairment. The administration of Glucarpidase causes a rapid and 
sustained reduction of toxic MTX concentrations.
    Voraxaze[supreg] was approved by the FDA on January 17, 2012. 
Beginning in 1993, certain patients could obtain expanded access for 
treatment use to Voraxaze[supreg] as an investigational drug. Since 
2007, the applicant has been authorized to recover the costs of making 
Voraxaze[supreg] available through its expanded access program. We 
describe expanded access for treatment use of investigational drugs and 
authorization to recover certain costs of investigational drugs in the 
FY 2013 IPPS/LTCH PPS final rule (77 FR 53346 through 53350). 
Voraxaze[supreg] was available on the market in the United States as a 
commercial product to the larger population as of April 30, 2012. In 
the FY 2013 IPPS/LTCH PPS proposed rule (77 FR 27936 through 27939), we 
expressed concerns about whether Voraxaze[supreg] could be considered 
new for FY 2013. After consideration of all of the public comments 
received, in the FY 2013 IPPS/LTCH PPS final rule, we stated that we 
considered Voraxaze[supreg] to be ``new'' as of April 30, 2012, which 
is the date of U.S. market availability.
    After evaluation of the newness, costs, and substantial clinical 
improvement criteria for new technology payments for Voraxaze[supreg] 
and consideration of the public comments we received in response to the 
FY 2013 IPPS/LTCH PPS proposed rule, we approved Voraxaze[supreg] for 
new technology add-on payments for FY 2013. Cases of Voraxaze[supreg] 
are identified with ICD-9-CM procedure code 00.95 (Injection or 
infusion of glucarpidase). As stated in the FY 2015 IPPS/LTCH PPS final 
rule correction notice (79 FR 59679), the cost of Voraxaze[supreg] is 
$23,625 per vial. The applicant stated that an average of four vials is 
used per Medicare beneficiary. Therefore, the average cost per case for 
Voraxaze[supreg] is $94,500 ($23,625 x 4). Under Sec.  412.88(a)(2), we 
limit new technology add-on payments to the lesser of 50 percent of the 
average cost of the technology or 50 percent of the costs in excess of 
the MS-DRG payment for the case. As a result, the maximum new 
technology add-on payment for Voraxaze[supreg] is $47,250 per case.
    As stated above, the new technology add-on payment regulations 
provide that a medical service or technology may be considered new 
within 2 or 3 years after the point at which data begin to become 
available reflecting the ICD-9-CM code assigned to the new service or 
technology (Sec.  412.87(b)(2)). Our practice has been to begin and end 
new technology add-on payments on the basis of a fiscal year, and we 
have generally followed a guideline that uses a 6-month window before 
and after the start of the fiscal year to determine whether to extend 
the new technology add-on payment for an additional fiscal year. In 
general, we extend add-on payments for an additional year only if the 
3-year anniversary date of the product's entry on the market occurs in 
the latter half of the fiscal year (70 FR 47362).
    With regard to the newness criterion for Voraxaze[supreg], we 
considered the beginning of the newness period to commence when 
Voraxaze[supreg] was first made available on the U.S. market on April 
30, 2012. Because the 3-year anniversary date for Voraxaze[supreg] 
occurred in the latter half of FY 2015 (April 30, 2015), in the FY 2015 
IPPS/LTCH PPS final rule, we continued new technology add-on payments 
for this technology for FY 2015 (79 FR 49918). However, for FY 2016, 
the 3-year anniversary date of the product's entry on the U.S. market 
(April 30, 2015) occurred prior to the beginning of FY 2016. Therefore, 
we proposed to discontinue new technology add-on payments for 
Voraxaze[supreg] for FY 2016. We invited public comments on this 
proposal.
    Comment: One commenter supported CMS' proposal to discontinue new 
technology add-on payments for Voraxaze[supreg] for FY 2016.
    Response: We appreciate the commenter's support.
    After consideration of the public comments we received, we are 
discontinuing new technology add-on payments for Voraxaze[supreg] for 
FY 2016. The 3-year anniversary date of the

[[Page 49436]]

product's entry onto the U.S. market occurred prior to the beginning of 
FY 2016 and, therefore, the technology will no longer be eligible for 
new technology add-on payments because the technology will no longer 
meet the ``newness'' criterion.
b. Zenith[supreg] Fenestrated Abdominal Aortic Aneurysm (AAA) 
Endovascular Graft
    Cook[supreg] Medical submitted an application for new technology 
add-on payments for the Zenith[supreg] Fenestrated Abdominal Aortic 
Aneurysm (AAA) Endovascular Graft (Zenith[supreg] F. Graft) for FY 
2013. The applicant stated that the current treatment for patients who 
have had an AAA is an endovascular graft. The applicant explained that 
the Zenith[supreg] F. Graft is an implantable device designed to treat 
patients who have an AAA and who are anatomically unsuitable for 
treatment with currently approved AAA endovascular grafts because of 
the length of the infrarenal aortic neck. The applicant noted that, 
currently, an AAA is treated through an open surgical repair or medical 
management for those patients not eligible for currently approved AAA 
endovascular grafts.
    With respect to newness, the applicant stated that FDA approval for 
the use of the Zenith[supreg] F. Graft was granted on April 4, 2012. In 
the FY 2013 IPPS/LTCH PPS final rule (77 FR 53360 through 53365), we 
stated that because the Zenith[supreg] F. Graft was approved by the FDA 
on April 4, 2012, we believed that the Zenith[supreg] F. Graft met the 
newness criterion as of that date.
    After evaluation of the newness, costs, and substantial clinical 
improvement criteria for new technology add-on payments for the 
Zenith[supreg] F. Graft and consideration of the public comments we 
received in response to the FY 2013 IPPS/LTCH PPS proposed rule, we 
approved the Zenith[supreg] F. Graft for new technology add-on payments 
for FY 2013. Cases involving the Zenith[supreg] F. Graft that are 
eligible for new technology add-on payments currently are identified by 
ICD-9-CM procedure code 39.78 (Endovascular implantation of branching 
or fenestrated graft(s) in aorta). In the application, the applicant 
provided a breakdown of the costs of the Zenith[supreg] F. Graft. The 
total cost of the Zenith[supreg] F. Graft utilizing bare metal (renal) 
alignment stents was $17,264. Of the $17,264 in costs for the 
Zenith[supreg] F. Graft, $921 is for components that are used in a 
standard Zenith AAA Endovascular Graft procedure. Because the costs for 
these components are already reflected within the MS-DRGs (and are no 
longer ``new''), in the FY 2013 IPPS/LTCH PPS final rule, we stated 
that we did not believe it is appropriate to include these costs in our 
calculation of the maximum cost to determine the maximum add-on payment 
for the Zenith[supreg] F. Graft. Therefore, the total maximum cost for 
the Zenith[supreg] F. Graft is $16,343 ($17,264-$921). Under Sec.  
412.88(a)(2), we limit new technology add-on payments to the lesser of 
50 percent of the average cost of the device or 50 percent of the costs 
in excess of the MS-DRG payment for the case. As a result, the maximum 
add-on payment for a case involving the Zenith[supreg] F. Graft is 
$8,171.50.
    With regard to the newness criterion for the Zenith[supreg] F. 
Graft, we considered the beginning of the newness period to commence 
when the Zenith[supreg] F. Graft was approved by the FDA on April 4, 
2012. Because the 3-year anniversary date of the entry of the 
Zenith[supreg] F. Graft on the U.S. market occurred in the second half 
of FY 2015 (April 4, 2015), in the FY 2015 IPPS/LTCH PPS final rule, we 
continued new technology add-on payments for this technology for FY 
2015 (79 FR 49922). However, for FY 2016, the 3-year anniversary date 
of the product's entry on the U.S. market (April 4, 2015) occurred 
prior to the beginning of FY 2016. Therefore, we proposed to 
discontinue new technology add-on payments for the Zenith[supreg] F. 
Graft for FY 2016. We invited public comments on this proposal.
    We did not receive any public comments on our proposal. Therefore, 
as we proposed, we are discontinuing new technology add-on payments for 
the Zenith[supreg] F. Graft technology for FY 2016. The 3-year 
anniversary of the product's entry onto the U.S. market occurred prior 
to the beginning of FY 2016 and, therefore, the technology is not 
eligible for new technology add-on payments for FY 2016 because the 
technology will no longer meet ``newness'' criterion.
c. KcentraTM
    CSL Behring submitted an application for new technology add-on 
payments for KcentraTM for FY 2014. KcentraTM is 
a replacement therapy for fresh frozen plasma (FFP) for patients with 
an acquired coagulation factor deficiency due to warfarin and who are 
experiencing a severe bleed. KcentraTM contains the Vitamin 
K dependent coagulation factors II, VII, IX and X, together known as 
the prothrombin complex, and antithrombotic proteins C and S. Factor IX 
is the lead factor for the potency of the preparation. The product is a 
heat-treated, non-activated, virus filtered and lyophilized plasma 
protein concentrate made from pooled human plasma. KcentraTM 
is available as a lyophilized powder that needs to be reconstituted 
with sterile water prior to administration via intravenous infusion. 
The product is dosed based on Factor IX units. Concurrent Vitamin K 
treatment is recommended to maintain blood clotting factor levels once 
the effects of KcentraTM have diminished.
    KcentraTM was approved by the FDA on April 29, 2013. In 
the FY 2014 IPPS/LTCH PPS final rule, we finalized new ICD-9-CM 
procedure code 00.96 (Infusion of 4-Factor Prothrombrin Complex 
Concentrate) which uniquely identifies KcentraTM.
    In the FY 2014 IPPS/LTCH PPS proposed rule (78 FR 27538), we noted 
that we were concerned that KcentraTM may be substantially 
similar to FFP and/or Vitamin K therapy. In the FY 2014 IPPS/LTCH PPS 
final rule, in response to comments submitted by the manufacturer, we 
stated that we agree that KcentraTM may be used in a patient 
population that is experiencing an acquired coagulation factor 
deficiency due to Warfarin and who are experiencing a severe bleed 
currently but are ineligible for FFP, particularly for use by IgA 
deficient patients and other patient populations that have no other 
treatment option to resolve severe bleeding in the context of an 
acquired Vitamin K deficiency. In addition, FFP is limited because it 
requires special storage conditions while KcentraTM is 
stable for up to 36 months at room temperature thus allowing hospitals 
that otherwise would not have access to FFP (for example, small rural 
hospitals as discussed by the applicant in its comments) to keep a 
supply of KcentraTM and treat patients who would possibly 
have no access to FFP. We noted that FFP is considered perishable and 
can be scarce by nature (due to production and other market 
limitations) thus making some hospitals unable to store FFP, which 
limits access to certain patient populations in certain locations. 
Therefore, we stated that we believe that KcentraTM provides 
a therapeutic option for a new patient population and is not 
substantially similar to FFP. Also, we gave credence to the information 
presented by the manufacturer that KcentraTM provides a 
simple and rapid repletion relative to FFP and reduces the risk of a 
transfusion reaction relative to FFP because it does not contain ABO 
antibodies and does not require ABO typing. As a result, we concluded 
that KcentraTM is not substantially similar to FFP, and that 
it meets the newness criterion.

[[Page 49437]]

    After evaluation of the newness, cost, and substantial clinical 
improvement criteria for new technology add-on payments for 
KcentraTM and consideration of the public comments we 
received in response to the FY 2014 IPPS/LTCH PPS proposed rule, we 
approved KcentraTM for new technology add-on payments for FY 
2014 (78 FR 50575 through 50580). Cases involving KcentraTM 
that are eligible for new technology add-on payments currently are 
identified by ICD-9-CM procedure code 00.96. In the application, the 
applicant estimated that the average Medicare beneficiary would require 
an average dosage of 2500 International Units (IU). Vials contain 500 
IU at a cost of $635 per vial. Therefore, cases of KcentraTM 
would incur an average cost per case of $3,175 ($635 x 5). Under Sec.  
412.88(a)(2), we limit new technology add-on payments to the lesser of 
50 percent of the average cost of the technology or 50 percent of the 
costs in excess of the MS-DRG payment for the case. As a result, the 
maximum add-on payment for a case of KcentraTM was $1,587.50 
for FY 2014.
    In the FY 2014 IPPS/LTCH PPS final rule (78 FR 50579), we stated 
that new technology add-on payments for KcentraTM would not 
be available with respect to discharges for which the hospital received 
an add-on payment for a blood clotting factor administered to a 
Medicare beneficiary with hemophilia who is a hospital inpatient. Under 
section 1886(d)(1)(A)(iii) of the Act, the national adjusted DRG 
prospective payment rate is the amount of the payment with respect to 
the operating costs of inpatient hospital services (as defined in 
subsection (a)(4)) for discharges on or after April 1, 1988. Section 
1886(a)(4) of the Act excludes from the term ``operating costs of 
inpatient hospital services'' the costs with respect to administering 
blood clotting factors to individuals with hemophilia. The costs of 
administering a blood clotting factor to a Medicare beneficiary who has 
hemophilia and is a hospital inpatient are paid separately from the 
IPPS. (For information on how the blood clotting factor add-on payment 
is made, we refer readers to Section 20.7.3, Chapter 3, of the Medicare 
Claims Processing Manual, which can be downloaded from the CMS Web site 
at: http://www.cms.gov/Regulations-and-Guidance/Guidance/Manuals/Downloads/clm104c03.pdf.) In addition, we stated that if 
KcentraTM is approved by the FDA as a blood clotting factor, 
we believed that it may be eligible for blood clotting factor add-on 
payments when administered to Medicare beneficiaries with hemophilia. 
We make an add-on payment for KcentraTM for such discharges 
in accordance with our policy for payment of a blood clotting factor, 
and the costs would be excluded from the operating costs of inpatient 
hospital services as set forth in section 1886(a)(4) of the Act.
    Section 1886(d)(5)(K)(i) of the Act requires the Secretary to 
establish a mechanism to recognize the costs of new medical services 
and technologies under the payment system established under this 
subsection beginning with discharges on or after October 1, 2001. We 
believe that it is reasonable to interpret this requirement to mean 
that the payment mechanism established by the Secretary recognizes only 
costs for those items that would otherwise be paid based on the 
prospective payment system (that is, ``the payment system established 
under this subsection''). As noted above, under section 
1886(d)(1)(A)(iii) of the Act, the national adjusted DRG prospective 
payment rate is the amount of payment for the operating costs of 
inpatient hospital services, as defined in section 1886(a)(4) of the 
Act, for discharges on or after April 1, 1988. We understand this to 
mean that a new medical service or technology must be an operating cost 
of inpatient hospital services paid based on the prospective payment 
system, and not excluded from such costs, in order to be eligible for 
the new technology add-on payment. We pointed out that new technology 
add-on payments are based on the operating costs per case relative to 
the prospective payment rate as described in Sec.  412.88. Therefore, 
we believe that new technology add-on payments are appropriate only 
when the new technology is an operating cost of inpatient hospital 
services and are not appropriate when the new technology is excluded 
from such costs.
    In the FY 2014 IPPS/LTCH PPS final rule (78 FR 50579), we stated 
that we believe that hospitals may only receive new technology add-on 
payments for discharges where KcentraTM is an operating cost 
of inpatient hospital services. In other words, a hospital would not be 
eligible to receive the new technology add-on payment when it is 
administering KcentraTM in treating a Medicare beneficiary 
who has hemophilia. In those instances, KcentraTM is 
specifically excluded from the operating costs of inpatient hospital 
services in accordance with section 1886(a)(4) of the Act and paid 
separately from the IPPS. However, when a hospital administers 
KcentraTM to a Medicare beneficiary who does not have 
hemophilia, the hospital would be eligible for a new technology add-on 
payment because KcentraTM would not be excluded from the 
operating costs of inpatient hospital services. Therefore, discharges 
where the hospital receives a blood clotting factor add-on payment are 
not eligible for a new technology add-on payment for the blood clotting 
factor. We refer readers to Section 20.7.3, Chapter 3, of the Medicare 
Claims Processing Manual for a complete discussion on when a blood 
clotting factor add-on payment is made. The manual can be downloaded 
from the CMS Web site at: http://www.cms.gov/Regulations-and-Guidance/Guidance/Manuals/Downloads/clm104c03.pdf.
    With regard to the newness criterion for KcentraTM, we 
considered the beginning of the newness period to commence when 
KcentraTM was approved by the FDA on April 29, 2013. Because 
the 3-year anniversary date of the entry of KcentraTM on the 
U.S. market will occur in the second half of FY 2016 (April 29, 2016), 
we proposed to continue new technology add-on payments for this 
technology for FY 2016.
    Because we are adopting the ICD-10 coding system effective October 
1, 2015, for FY 2016, we proposed to identify and make new technology 
add-on payments for cases involving KcentraTM with ICD 10 
PCS procedure code 30283B1 (Transfusion of nonautologous 4-factor 
prothrombin complex concentrate into vein, percutaneous approach). We 
stated that the maximum new technology add-on payment for a case 
involving the KcentraTM technology would remain at $1,587.50 
for FY 2016.
    We invited public comments on these proposals.
    Comment: One commenter supported CMS' proposal to continue new 
technology add-on payments for KcentraTM for FY 2016.
    Response: We appreciate the commenter's support.
    We did not receive any public comments on the coding and payment 
for KcentraTM for FY 2016.
    After consideration of the public comments we received, we are 
finalizing our proposal to continue new technology add-on payments for 
the KcentraTM technology for FY 2016. Because we are 
adopting the ICD-10 coding system effective October 1, 2015, for FY 
2016, as we proposed, we will identify and make new technology add-on 
payments for cases involving KcentraTM with the presence of 
ICD-10-PCS procedure code 30283B1 (Transfusion of nonautologous 4-
factor prothrombin complex concentrate into vein, percutaneous 
approach). New technology add-on payments for

[[Page 49438]]

KcentraTM will not be available with respect to discharges 
for which the hospital received an add-on payment for a blood clotting 
factor administered to a Medicare beneficiary with hemophilia who is a 
hospital inpatient. For information on how the blood clotting factor 
add-on payment is made (including a list of ICD-10 diagnosis codes that 
would negate the eligibility of a case for new technology add-on 
payments, if reported in combination with the ICD-10 procedure code 
used to identify cases involving the KcentraTM technology), 
we refer readers to Section 20.7.3, Chapter 3, of the Medicare Claims 
Processing Manual, which is available via the Internet on the CMS Web 
site at: http://cms.gov/Regulations-and-Guidance/Guidance/Manuals/Downloads/clm104c03.pdf. The maximum new technology add-on payment for 
a case involving the KcentraTM technology will remain at 
$1,587.50 for FY 2016.
d. Argus[supreg] II Retinal Prosthesis System
    Second Sight Medical Products, Inc. submitted an application for 
new technology add-on payments for the Argus[supreg] II Retinal 
Prosthesis System (Argus[supreg] II System) for FY 2014. The 
Argus[supreg] II System is an active implantable medical device that is 
intended to provide electrical stimulation of the retina to induce 
visual perception in patients who are profoundly blind due to retinitis 
pigmentosa (RP). These patients have bare or no light perception in 
both eyes. The system employs electrical signals to bypass dead photo-
receptor cells and stimulate the overlying neurons according to a real-
time video signal that is wirelessly transmitted from an externally 
worn video camera. The Argus[supreg] II implant is intended to be 
implanted in a single eye, typically the worse-seeing eye. Currently, 
bilateral implants are not intended for this technology. According to 
the applicant, the surgical implant procedure takes approximately 4 
hours and is performed under general anesthesia.
    The Argus[supreg] II System consists of three primary components: 
(1) An implant which is an epiretinal prosthesis that is fully 
implanted on and in the eye (that is, there are no percutaneous leads); 
(2) external components worn by the user; and (3) a ``fitting'' system 
for the clinician that is periodically used to perform diagnostic tests 
with the system and to custom-program the external unit for use by the 
patient. We describe these components more fully below.
     Implant: The retinal prosthesis implant is responsible for 
receiving information from the external components of the system and 
electrically stimulating the retina to induce visual perception. The 
retinal implant consists of: (a) A receiving coil for receiving 
information and power from the external components of the Argus[supreg] 
II System; (b) electronics to drive stimulation of the electrodes; and 
(c) an electrode array. The receiving coil and electronics are secured 
to the outside of the eye using a standard scleral band and sutures, 
while the electrode array is secured to the surface of the retina 
inside the eye by a retinal tack. A cable, which passes through the eye 
wall, connects the electronics to the electrode array. A pericardial 
graft is placed over the extra-ocular portion on the outside of the 
eye.
     External Components: The implant receives power and data 
commands wirelessly from an external unit of components, which include 
the Argus II Glasses and Video Processing Unit (VPU). A small 
lightweight video camera and transmitting coil are mounted on the 
glasses. The telemetry coils and radio-frequency system are mounted on 
the temple arm of the glasses for transmitting data from the VPU to the 
implant. The glasses are connected to the VPU by a cable. This VPU is 
worn by the patient, typically on a belt or a strap, and is used to 
process the images from the video camera and convert the images into 
electrical stimulation commands, which are transmitted wirelessly to 
the implant.
     ``Fitting System'': To be able to use the Argus[supreg] II 
System, a patient's VPU needs to be custom-programmed. This process, 
which the applicant called ``fitting'', occurs in the hospital/clinic 
shortly after the implant surgery and then periodically thereafter as 
needed. The clinician/physician also uses the ``Fitting System'' to run 
diagnostic tests (for example, to obtain electrode and impedance 
waveform measurements or to check the radio-frequency link between the 
implant and external unit). This ``Fitting System'' can also be 
connected to a ``Psychophysical Test System'' to evaluate patients' 
performance with the Argus[supreg] II System on an ongoing basis.
    These three components work together to stimulate the retina and 
allow a patient to perceive phosphenes (spots of light), which they 
then need to learn to interpret. While using the Argus[supreg] II 
System, the video camera on the patient-worn glasses captures a video 
image. The video camera signal is sent to the VPU, which processes the 
video camera image and transforms it into electrical stimulation 
patterns. The electrical stimulation data are then sent to a 
transmitter coil mounted on the glasses. The transmitter coil sends 
both data and power via radio-frequency (RF) telemetry to the implanted 
retinal prosthesis. The implant receives the RF commands and delivers 
stimulation to the retina via an array of electrodes that is secured to 
the retina with a retinal tack.
    In patients with RP, the photoreceptor cells in the retina, which 
normally transduce incoming light into an electro-chemical signal, have 
lost most of their function. The stimulation pulses delivered to the 
retina via the electrode array of the Argus[supreg] II System are 
intended to mimic the function of these degenerated photoreceptors 
cells. These pulses induce cellular responses in the remaining, viable 
retinal nerve cells that travel through the optic nerve to the visual 
cortex where they are perceived as phosphenes (spots of light). 
Patients learn to interpret the visual patterns produced by these 
phosphenes.
    With respect to the newness criterion, according to the applicant, 
the FDA designated the Argus[supreg] II System a Humanitarian Use 
Device in May 2009 (HUD designation #09-0216). The applicant submitted 
a Humanitarian Device Exemption (HDE) application (#H110002) to the FDA 
in May 2011 to obtain market approval for the Argus[supreg] II System. 
The HDE was referred to the Ophthalmic Devices Panel of the FDA's 
Medical Devices Advisory Committee for review and recommendation. At 
the Panel's meeting held on September 28, 2012, the Panel voted 19 to 0 
that the probable benefits of the Argus[supreg] II System outweigh the 
risks of the system for the proposed indication for use. The applicant 
received the HDE approval from the FDA on February 14, 2013. However, 
in the FY 2015 IPPS/LTCH PPS final rule (79 FR 49924 through 49925), we 
discussed comments we had received informing CMS that the Argus[supreg] 
II System was not available on the U.S. market until December 20, 2013. 
The applicant explained that, as part of the lengthy approval process, 
it was required to submit a request to the Federal Communications 
Commission (FCC) for a waiver of section 15.209(a) of the FCC rules 
that would allow the applicant to apply for FCC authorization to 
utilize this specific RF band. The FCC approved the applicant's waiver 
request on November 30, 2011. After receiving the FCC waiver of the 
section 15.209(a) rules, the applicant requested and obtained a 
required Grant of Equipment Authorization to utilize the specific RF 
band, which the FCC issued on December 20, 2013. Therefore, the 
applicant stated that the date the Argus[supreg] II System first became 
available for commercial sale in the United States

[[Page 49439]]

was December 20, 2013. We agreed with the applicant that, due to the 
delay, the date of newness for the Argus[supreg] II System was December 
20, 2013, instead of February 14, 2013.
    Currently there are no other approved treatments for patients 
diagnosed with severe to profound RP. The Argus[supreg] II System has 
an IDE number of G050001 and is a Class III device. In the FY 2014 
IPPS/LTCH PPS final rule (78 FR 50580 through 50583), we finalized new 
ICD-9-CM procedure code 14.81 (Implantation of epiretinal visual 
prosthesis), which uniquely identifies the Argus[supreg] II System. The 
other two codes finalized by CMS are for removal, revision, or 
replacement of the device.
    After evaluation of the new technology add-on payment application 
and consideration of public comments received, we concluded that the 
Argus[supreg] II System met all of the new technology add-on payment 
policy criteria. Therefore, we approved the Argus[supreg] II System for 
new technology add-on payments in FY 2014 (78 FR 50580 through 50583). 
Cases involving the Argus[supreg] II System that are eligible for new 
technology add-on payments currently are identified by ICD-9-CM 
procedure code 14.81. We note that section 1886(d)(5)(K)(i) of the Act 
requires that the Secretary establish a mechanism to recognize the 
costs of new medical services or technologies under the payment system 
established under that subsection, which establishes the system for 
paying for the operating costs of inpatient hospital services. The 
system of payment for capital costs is established under section 
1886(g) of the Act, which makes no mention of any add-on payments for a 
new medical service or technology. Therefore, it is not appropriate to 
include capital costs in the add-on payments for a new medical service 
or technology. In the application, the applicant provided a breakdown 
of the costs of the Argus[supreg] II System. The total operating cost 
of the Argus[supreg] II System is $144,057.50. Under Sec.  
412.88(a)(2), we limit new technology add-on payments to the lesser of 
50 percent of the average cost of the device or 50 percent of the costs 
in excess of the MS-DRG payment for the case. As a result, the maximum 
add-on payment for a case involving the Argus[supreg] II System for FY 
2014 was $72,028.75.
    With regard to the newness criterion for the Argus[supreg] II 
System, we considered the beginning of the newness period to commence 
when the Argus[supreg] II System became available on the U.S. market on 
December 20, 2013. Because the 3-year anniversary date of the entry of 
the Argus[supreg] II System on the U.S. market will occur in the first 
half of FY 2017 (December 23, 2016), we proposed to continue new 
technology add-on payments for this technology for FY 2016.
    Because we are adopting the ICD-10 coding system beginning October 
1, 2015, we proposed to identify and make new technology add-on 
payments for cases involving the Argus[supreg] II System when one of 
the following ICD-10-PCS procedure codes is reported: 08H005Z 
(Insertion of epiretinal visual prosthesis into right eye, open 
approach); or 08H105Z (Insertion of epiretinal visual prosthesis into 
left eye, open approach). We stated that the maximum new technology 
add-on payment for a case involving the Argus[supreg] II System would 
remain at $72,028.75 for FY 2016.
    We invited public comments on our proposals.
    We did not receive any public comments on our proposal to continue 
new technology add-on payments for the Argus[supreg] II System for FY 
2016 or on the coding and payment of this technology. Therefore, we are 
finalizing our proposal to continue new technology add-on payments for 
the Argus[supreg] II System for FY 2016. Because we are adopting the 
ICD-10 coding system beginning October 1, 2015, we will identify and 
make new technology add-on payments for cases involving the 
Argus[supreg] II System when ICD-10-PCS procedure code 08H005Z or 
08H105Z is reported. The maximum new technology add-on payment for a 
case involving the Argus[supreg] II System remains at $72,028.75 for FY 
2016.
e. Zilver[supreg] PTX[supreg] Drug Eluting Peripheral Stent
    Cook[supreg] Medical submitted an application for new technology 
add-on payments for the Zilver[supreg] PTX[supreg] Drug Eluting 
Peripheral Stent (Zilver[supreg] PTX[supreg]) for FY 2014. The 
Zilver[supreg] PTX[supreg] is intended for use in the treatment of 
peripheral artery disease (PAD) of the above-the-knee femoropopliteal 
arteries (superficial femoral arteries). According to the applicant, 
the stent is percutaneously inserted into the artery(s), usually by 
accessing the common femoral artery in the groin. The applicant stated 
that an introducer catheter is inserted over the wire guide and into 
the target vessel where the lesion will first be treated with an 
angioplasty balloon to prepare the vessel for stenting. The applicant 
indicated that the stent is self-expanding, made of nitinol (nickel 
titanium), and is coated with the drug Paclitaxel. Paclitaxel is a drug 
approved for use as an anticancer agent and for use with coronary 
stents to reduce the risk of renarrowing of the coronary arteries after 
stenting procedures.
    The applicant received FDA approval on November 15, 2012, for the 
Zilver[supreg] PTX[supreg]. The applicant maintains that the 
Zilver[supreg] PTX[supreg] is the first drug-eluting stent used for 
superficial femoral arteries. The technology is currently described by 
ICD-9-CM procedure code 00.60 (Insertion of drug-eluting stent(s) of 
the superficial femoral artery).
    In the FY 2014 IPPS/LTCH PPS final rule (78 FR 50583 through 
50585), after evaluation of the new technology add-on payment 
application and consideration of the public comments received, we 
approved the Zilver[supreg] PTX[supreg] for new technology add-on 
payments in FY 2014. Cases involving the Zilver[supreg] PTX[supreg] 
that are eligible for new technology add-on payments are identified by 
ICD-9-CM procedure code 00.60. As explained in the FY 2014 IPPS/LTCH 
PPS final rule, to determine the amount of Zilver[supreg] PTX[supreg] 
stents per case, instead of using the amount of stents used per case 
based on the ICD-9-CM codes, the applicant used an average of 1.9 
stents per case based on the Zilver[supreg] PTX[supreg] Global Registry 
Clinical Study. The applicant stated in its application that the 
anticipated cost per stent is approximately $1,795. Therefore, cases of 
the Zilver[supreg] PTX[supreg] would incur an average cost per case of 
$3,410.50 ($1,795 x 1.9). Under Sec.  412.88(a)(2), we limit new 
technology add-on payments to the lesser of 50 percent of the average 
cost of the device or 50 percent of the costs in excess of the MS-DRG 
payment for the case. As a result, the maximum add-on payment for a 
case of the Zilver[supreg] PTX[supreg] was $1,705.25 for FY 2014.
    With regard to the newness criterion for the Zilver[supreg] 
PTX[supreg], we considered the beginning of the newness period to 
commence when the Zilver[supreg] PTX[supreg] was approved by the FDA on 
November 15, 2012. Because the 3-year anniversary date of the entry of 
the Zilver[supreg] PTX[supreg] on the U.S. market occurred after FY 
2015 (November 15, 2015), in the FY 2015 IPPS/LTCH PPS final rule, we 
continued new technology add-on payments for this technology for FY 
2015 (79 FR 49925). However, for FY 2016, the 3-year anniversary date 
of the product's entry on the U.S. market (November 15, 2015) occurs in 
the first half of FY 2016. Therefore, we proposed to discontinue new 
technology add-on payments for the Zilver[supreg] PTX[supreg] for FY 
2016. We invited public comments on this proposal.
    Comment: One commenter requested that CMS extend the new technology 
add-on payment for the Zilver[supreg] PTX[supreg] for FY 2016.

[[Page 49440]]

    Response: As stated previously, the new technology add-on payment 
regulations provide that a medical service or technology may be 
considered new within 2 or 3 years after the point at which data begin 
to become available reflecting the ICD-9-CM code assigned to the new 
service or technology (Sec.  412.87(b)(2)). Our practice has been to 
begin and end new technology add-on payments on the basis of a fiscal 
year, and we have generally followed a guideline that uses a 6-month 
window before and after the start of the fiscal year to determine 
whether to extend the new technology add-on payment for an additional 
fiscal year. In general, we extend add-on payments for an additional 
year only if the 3-year anniversary date of the product's entry on the 
market occurs in the latter half of the fiscal year (70 FR 47362). 
Consistent with this practice, because the 3-year anniversary date of 
the product's entry onto the U.S. market will occur during the first 
half of FY 2016, we are not extending new technology add-on payments 
for FY 2016.
    After consideration of the public comment we received, we are 
finalizing our proposal to discontinue new technology add-on payments 
for the Zilver[supreg] PTX[supreg] for FY 2016 because the technology 
will no longer be considered new.
f. CardioMEMSTM HF (Heart Failure) Monitoring System
    CardioMEMS, Inc. submitted an application for new technology add-on 
payment for FY 2015 for the CardioMEMSTM HF (Heart Failure) 
Monitoring System, which is an implantable hemodynamic monitoring 
system comprised of an implantable sensor/monitor placed in the distal 
pulmonary artery. Pulmonary artery hemodynamic monitoring is used in 
the management of heart failure. The CardioMEMSTM HF 
Monitoring System measures multiple pulmonary artery pressure 
parameters for an ambulatory patient to measure and transmit data via a 
wireless sensor to a secure Web site.
    The CardioMEMSTM HF Monitoring System utilizes 
radiofrequency (RF) energy to power the sensor and to measure pulmonary 
artery (PA) pressure and consists of three components: An Implantable 
Sensor with Delivery Catheter, an External Electronics Unit, and a 
Pulmonary Artery Pressure Database. The system provides the physician 
with the patient's PA pressure waveform (including systolic, diastolic, 
and mean pressures) as well as heart rate. The sensor is permanently 
implanted in the distal pulmonary artery using transcatheter techniques 
in the catheterization laboratory where it is calibrated using a Swan-
Ganz catheter. PA pressures are transmitted by the patient at home in a 
supine position on a padded antenna, pushing one button which records 
an 18-second continuous waveform. The data also can be recorded from 
the hospital, physician's office or clinic.
    The hemodynamic data, including a detailed waveform, are 
transmitted to a secure Web site that serves as the Pulmonary Artery 
Pressure Database, so that information regarding PA pressure is 
available to the physician or nurse at any time via the Internet. 
Interpretation of trend data allows the clinician to make adjustments 
to therapy and can be used along with heart failure signs and symptoms 
to adjust medications.
    The applicant believed that a large majority of patients receiving 
the sensor would be admitted as an inpatient to a hospital with a 
diagnosis of acute or chronic heart failure, which is typically 
described by ICD-9-CM diagnosis code 428.43 (Acute on chronic combined 
systolic and diastolic heart failure) and the sensor would be implanted 
during the inpatient stay. The applicant stated that for safety 
considerations, a small portion of these patients may be discharged and 
the sensor would be implanted at a future date in the hospital 
outpatient setting. In addition, there would likely be a group of 
patients diagnosed with chronic heart failure who are not currently 
hospitalized, but who have been hospitalized in the past few months for 
which the treating physician believes that regular pulmonary artery 
pressure readings are necessary to optimize patient management. 
Depending on the patient's status, the applicant stated that these 
patients may have the sensor implanted in the hospital inpatient or 
outpatient setting.
    The applicant received FDA approval on May 28, 2014. The 
CardioMEMSTM HF Monitoring System is currently described by 
ICD-9-CM procedure code 38.26 (Insertion of implantable pressure sensor 
without lead for intracardiac or great vessel hemodynamic monitoring).
    After evaluation of the newness, costs, and substantial clinical 
improvement criteria for new technology payments for the 
CardioMEMSTM HF Monitoring System and consideration of the 
public comments we received in response to the FY 2015 IPPS/LTCH PPS 
proposed rule, we approved the CardioMEMSTM HF Monitoring 
System for new technology add-on payments for FY 2015 (79 FR 49940). 
Cases involving the CardioMEMSTM HF Monitoring System that 
are eligible for new technology add-on payments are identified by ICD-
9-CM procedure code 38.26 (Insertion of implantable wireless pressure 
sensor for intracardiac or great vessel hemodynamic monitoring), which 
was effective October 1, 2011. With the new technology add-on payment 
application, the applicant stated that the total operating cost of the 
CardioMEMSTM HF Monitoring System is $17,750. Under Sec.  
412.88(a)(2), we limit new technology add-on payments to the lesser of 
50 percent of the average cost of the device or 50 percent of the costs 
in excess of the MS-DRG payment for the case. As a result, the maximum 
new technology add-on payment for a case involving the 
CardioMEMSTM HF Monitoring System is $8,875.
    With regard to the newness criterion for the 
CardioMEMSTM HF Monitoring System, we considered the 
beginning of the newness period to commence when the 
CardioMEMSTM HF Monitoring System was approved by the FDA on 
May 28, 2014. Because the 3-year anniversary date of the entry of the 
CardioMEMSTM HF Monitoring System on the U.S. market will 
occur in FY 2017 (May 28, 2017), we proposed to continue new technology 
add-on payments for this technology for FY 2016.
    Because we are adopting the ICD-10 coding system beginning October 
1, 2015, for FY 2016, we proposed to identify and make new technology 
add-on payments for cases involving the CardioMEMSTM HF 
Monitoring System using either ICD-10-PCS procedure code 02HQ30Z 
(Insertion of pressure sensor monitoring device into right pulmonary 
artery, percutaneous approach) or ICD-10-PCS procedure code 02HR30Z 
(Insertion of pressure sensor monitoring device into left pulmonary 
artery, percutaneous approach). We stated that the maximum payment for 
a case involving the CardioMEMSTM HF Monitoring System would 
remain at $8,875 for FY 2016.
    We invited public comments on our proposals.
    Comment: Commenters supported CMS' proposal to continue new 
technology add-on payments for the CardioMEMSTM HF 
Monitoring System for FY 2016. Commenters also supported CMS'proposal 
to use ICD-10-PCS procedure codes 02HQ30Z and 02HR30Z when making new 
technology add-on payments for cases involving the 
CardioMEMSTM HF Monitoring System.
    Response: We appreciate the commenters' support.
    After consideration of the public comments we received, we are 
finalizing our proposal to continue new technology add-on payments for 
the

[[Page 49441]]

CardioMEMSTM HF Monitoring System for FY 2016. Because we 
are adopting the ICD-10 coding system beginning October 1, 2015, for FY 
2016, we will identify and make new technology add-on payments for 
cases involving the CardioMEMSTM HF Monitoring System using 
either ICD-10-PCS procedure code 02HQ30Z (Insertion of pressure sensor 
monitoring device into right pulmonary artery, percutaneous approach) 
or ICD-10-PCS procedure code 02HR30Z (Insertion of pressure sensor 
monitoring device into left pulmonary artery, percutaneous approach). 
We note that as discussed in section II.G.3. of the preamble of this 
final rule, CMS determined that there are additional ICD-10-PCS codes 
describing the insertion of a pressure sensor monitoring that also are 
appropriate translations for ICD 9 CM procedure code 38.26. These other 
ICD-10-PCS codes describe the insertion of a pressure sensor monitoring 
device utilizing an open approach or a percutaneous endoscopic approach 
(for the right or left pulmonary artery). However, for purposes of new 
technology add-on payments for cases involving the 
CardioMEMSTM HF Monitoring System, as stated above, we will 
identify cases using either ICD-10-PCS procedure code 02HQ30Z 
(Insertion of pressure sensor monitoring device into right pulmonary 
artery, percutaneous approach) or ICD-10-PCS procedure code 02HR30Z 
(Insertion of pressure sensor monitoring device into left pulmonary 
artery, percutaneous approach). The maximum payment for a case 
involving the CardioMEMSTM HF Monitoring System will remain 
at $8,875 for FY 2016.
g. MitraClip[supreg] System
    Abbott Vascular submitted an application for new technology add-on 
payments for the MitraClip[supreg] System for FY 2015. The 
MitraClip[supreg] System is a transcatheter mitral valve repair system 
that includes a MitraClip[supreg] device implant, a Steerable Guide 
Catheter, and a Clip Delivery System. It is designed to perform 
reconstruction of the insufficient mitral valve for high-risk patients 
who are not candidates for conventional open mitral valve repair 
surgery.
    Mitral regurgitation (MR), also referred to as mitral insufficiency 
or mitral incompetence, occurs when the mitral valve fails to close 
completely causing the blood to leak or flow backwards (regurgitate) 
into the left ventricle. If the amount of blood that leaks backwards 
into the left ventricle is minimal, then intervention is usually not 
necessary. However, if the amount of blood that is regurgitated becomes 
significant, this can cause the left ventricle to work harder to meet 
the body's need for oxygenated blood. Severity levels of MR can range 
from grade 1+ through grade 4+. If left untreated, severe MR can lead 
to heart failure and death. The American College of Cardiology (ACC) 
and the American Heart Association (AHA) issued practice guidelines in 
2006 that recommended intervention for moderate/severe or severe MR 
(grade 3+ to 4+). The applicant stated that the MitraClip[supreg] 
System is ``indicated for percutaneous reduction of significant mitral 
regurgitation . . . in patients who have been determined to be at 
prohibitive risk for mitral value surgery by a heart team, which 
includes a cardiac surgeon experienced in mitral valve surgery and a 
cardiologist experienced in mitral valve disease and in whom existing 
comorbidities would not preclude the expected benefit from correction 
of the mitral regurgitation.''
    The MitraClip[supreg] System mitral valve repair procedure is based 
on the double-orifice surgical repair technique that has been used as a 
surgical technique in open chest, arrested-heart surgery for the 
treatment of MR since the early 1990s. According to the applicant, in 
utilizing ``the double-orifice technique, a portion of the anterior 
leaflet is sutured to the corresponding portion of the posterior 
leaflet using standard techniques and forceps and suture, creating a 
point of permanent cooptation (``approximation'') of the two leaflets. 
When the suture is placed in the middle of the valve, the valve will 
have a functional double orifice during diastole.''
    With regard to the newness criterion, the MitraClip[supreg] System 
received a premarket approval from the FDA on October 24, 2013. The 
MitraClip[supreg] System is indicated ``for the percutaneous reduction 
of significant symptomatic mitral regurgitation (MR >= 3+) due to 
primary abnormality of the mitral apparatus (degenerative MR) in 
patients who have been determined to be at prohibitive risk for mitral 
valve surgery by a heart team, which includes a cardiac surgeon 
experienced in mitral valve surgery and a cardiologist experienced in 
mitral valve disease, and in whom existing comorbidities would not 
preclude the expected benefit from reduction of the mitral 
regurgitation.'' The MitraClip[supreg] System became immediately 
available on the U.S. market following FDA approval. The 
MitraClip[supreg] System is a Class III device, and has an 
investigational device exemption (IDE) for the EVEREST study 
(Endovascular Valve Edge-to-Edge Repair Study)--IDE G030061, and for 
the COAPT study (Cardiovascular Outcomes Assessment of the MitraClip 
Percutaneous Therapy for Health Failure Patients with Functional Mitral 
Regurgitation)--IDE G120024. Effective October 1, 2010, ICD-9-CM 
procedure code 35.97 (Percutaneous mitral valve repair with implant) 
was created to identify and describe the MitraClip[supreg] System 
technology.
    On August 7, 2014, CMS issued a National Coverage Decision (NCD) 
concerning Transcatheter Mitral Valve Repair procedures. We refer 
readers to the CMS Web site at: http://www.cms.gov/medicare-coverage-database/details/nca-tracking-sheet.aspx?NCAId=273 for information 
related to this NCD.
    After evaluation of the newness, costs, and substantial clinical 
improvement criteria for new technology payments for the 
MitraClip[supreg] System and consideration of the public comments we 
received in response to the FY 2015 IPPS/LTCH PPS proposed rule, we 
approved the MitraClip[supreg] System for new technology add-on 
payments for FY 2015 (79 FR 49946). As discussed in the FY 2015 IPPS/
LTCH PPS final rule, this approval is on the basis of using the 
MitraClip[supreg] consistent with the NCD. Cases involving the 
MitraClip[supreg] System that are eligible for the new technology add-
on payments are currently identified by ICD-9-CM procedure code 35.97. 
The average cost of the MitraClip[supreg] System is reported as 
$30,000. Under section 412.88(a)(2), we limit new technology add-on 
payments to the lesser of 50 percent of the average cost of the device 
or 50 percent of the costs in excess of the MS-DRG payment for the 
case. As a result, the maximum new technology add-on payment for a case 
involving the MitraClip[supreg] System is $15,000 for FY 2015.
    With regard to the newness criterion for the MitraClip[supreg] 
System, we considered the beginning of the newness period to commence 
when the MitraClip[supreg] System was approved by the FDA on October 
24, 2013. Because the 3-year anniversary date of the entry of the 
MitraClip[supreg] System on the U.S. market will occur in FY 2017 
(October 24, 2016), we proposed to continue new technology add-on 
payments for this technology for FY 2016.
    Because we are adopting the ICD-10 coding system beginning October 
1, 2015, we proposed to identify and make new technology add-on 
payments for cases involving the MitraClip[supreg] System using ICD-10-
PCS procedure code 02UG3JZ (Supplement mitral valve with synthetic 
substitute, percutaneous approach). We stated that the maximum

[[Page 49442]]

payment for a case involving the MitraClip[supreg] System would remain 
at $15,000 for FY 2016.
    We invited public comments on our proposals.
    Comment: Commenters supported CMS' proposal to continue new 
technology add-on payments for the MitraClip[supreg] System for FY 
2016. One commenter, the manufacturer, submitted a revised cost 
analysis. The commenter noted that the MitraClip[supreg] System maps to 
newly created MS-DRGs 273 and 274 (instead of MS-DRGs 250 and 251), the 
same MS-DRGs as the WATCHMAN[supreg] System (which is discussed in 
section II.I.5.f. of the preamble of this final rule). The commenter 
reported that it conducted an analysis using the supplemental 
thresholds that CMS discussed in the proposed rule for newly created 
MS-DRGs 273 and 274 and demonstrated that the MitraClip[supreg] System 
meets the cost criterion because the case-weighted average standardized 
charge per case exceeded the case-weighted threshold. Therefore, the 
commenter believed that the MitraClip[supreg] System continues to meet 
all three criteria for new technology add-on payments for FY 2016.
    Response: We appreciate the commenters' support. In the proposed 
rule, with regard to the cost criterion for the WATCHMAN[supreg] 
System, we discussed using supplemental thresholds for newly created 
MS-DRGs 273 and 274 and posted these supplemental thresholds on the CMS 
Web site. We note that we are maintaining our current policy, which is 
to use the thresholds issued with each final rule for the upcoming 
fiscal year (that is, for FY 2017, we will use the thresholds for the 
updated MS-DRG assignments as reflected in Table 10 issued with this FY 
2016 final rule) when making a determination to continue the add-on 
payment for those new technologies that were approved for the new 
technology add-on payment from the prior fiscal year.
    We did not receive any public comments on the coding and payment of 
the MitraClip[supreg] System for FY 2016.
    After consideration of the public comments we received, we are 
finalizing our proposal to continue new technology add-on payments for 
the MitraClip[supreg] System for FY 2016. Because we are adopting the 
ICD-10 coding system beginning October 1, 2015, we will identify and 
make new technology add-on payments for cases involving the 
MitraClip[supreg] System using ICD-10-PCS procedure code 02UG3JZ. The 
maximum payment for a case involving the MitraClip[supreg] System will 
remain at $15,000 for FY 2016.
h. Responsive Neurostimulator (RNS[supreg]) System
    NeuroPace, Inc. submitted an application for new technology add-on 
payments for FY 2015 for the use of the RNS[supreg] System. (We note 
that the applicant submitted an application for new technology add-on 
payments for FY 2014, but failed to receive FDA approval prior to the 
July 1 deadline.) Seizures occur when brain function is disrupted by 
abnormal electrical activity. Epilepsy is a brain disorder 
characterized by recurrent, unprovoked seizures. According to the 
applicant, the RNS[supreg] System is the first implantable medical 
device (developed by NeuroPace, Inc.) for treating persons diagnosed 
with epilepsy whose partial onset seizures have not been adequately 
controlled with antiepileptic medications. The applicant further stated 
that, the RNS[supreg] System is the first closed-loop, responsive 
system to treat partial onset seizures. Responsive electrical 
stimulation is delivered directly to the seizure focus in the brain 
when abnormal brain activity is detected. A cranially implanted 
programmable neurostimulator senses and records brain activity through 
one or two electrode-containing leads that are placed at the patient's 
seizure focus/foci. The neurostimulator detects electrographic patterns 
previously identified by the physician as abnormal, and then provides 
brief pulses of electrical stimulation through the leads to interrupt 
those patterns. Stimulation is delivered only when abnormal 
electrocorticographic activity is detected. The typical patient is 
treated with a total of 5 minutes of stimulation a day. The RNS[supreg] 
System incorporates remote monitoring, which allows patients to share 
information with their physicians remotely.
    With respect to the newness criterion, the applicant stated that 
some patients diagnosed with partial onset seizures that cannot be 
controlled with antiepileptic medications may be candidates for the 
vagus nerve stimulator (VNS) or for surgical removal of the seizure 
focus. According to the applicant, these treatments are not appropriate 
for, or helpful to, all patients. Therefore, the applicant believed 
that there is an unmet clinical need for additional therapies for 
partial onset seizures. The applicant further stated that the 
RNS[supreg] System addresses this unmet clinical need by providing a 
novel treatment option for treating persons diagnosed with medically 
intractable partial onset seizures. The applicant received FDA 
premarket approval on November 14, 2013.
    After evaluation of the newness, costs, and substantial clinical 
improvement criteria for new technology payments for the RNS[supreg] 
System and consideration of the public comments we received in response 
to the FY 2015 IPPS/LTCH PPS proposed rule, we approved the RNS[supreg] 
System for new technology add-on payments for FY 2015 (79 FR 49950). 
Cases involving the RNS[supreg] System that are eligible for new 
technology add-on payments are currently identified using the following 
ICD-9-CM procedure codes: 01.20 (Cranial implantation or replacement of 
neurostimulator pulse generator) in combination with 02.93 
(Implantation or replacement of intracranial neurostimulator lead(s)). 
According to the applicant, cases using the RNS[supreg] System would 
incur an anticipated cost per case of $36,950. Under Sec.  412.88(a)(2) 
of the regulations, we limit new technology add-on payments to the 
lesser of 50 percent of the average costs of the device or 50 percent 
of the costs in excess of the MS-DRG payment rate for the case. As a 
result, the maximum new technology add-on payment for cases involving 
the RNS[supreg] System is $18,475.
    With regard to the newness criterion for the RNS[supreg] System, we 
considered the beginning of the newness period to commence when the 
RNS[supreg] System was approved by the FDA on November 14, 2013. 
Because the 3-year anniversary date of the entry of the RNS[supreg] 
System on the U.S. market will occur in FY 2017 (November 14, 2016), we 
proposed to continue new technology add-on payments for this technology 
for FY 2016.
    Because we are adopting the ICD-10 coding system beginning October 
1, 2015, we proposed to identify and make new technology add-on 
payments for cases involving the RNS[supreg] System using the following 
ICD-10-PCS procedure code combination: 0NH00NZ (Insertion of 
neurostimulator generator into skull, open approach) in combination 
with 00H00MZ (Insertion of neurostimulator lead into brain, open 
approach). We stated that the maximum payment for a case involving the 
RNS[supreg] System would remain at $18,475 for FY 2016.
    We invited public comments on our proposals.
    Comment: Commenters supported CMS' proposal to continue new 
technology add-on payments for the RNS[supreg] System for FY 2016. One 
commenter noted that since FY 2015, additional evidence has been 
published further demonstrating the safety, effectiveness, and 
durability of the RNS[supreg] System. The commenter cited in

[[Page 49443]]

particular a peer-reviewed article that was published in February 2015 
in Neurology, the journal of the American Academy of Neurology. The 
commenter stated that this article provides interim results of safety 
and effectiveness from the 7-year, prospective, long-term, follow-up 
trial for the RNS System.\8\
---------------------------------------------------------------------------

    \8\ Bergey et al., Long-term treatment with responsive brain 
stimulation in adults with refractory partial seizures. Neurology. 
2015 Feb 24;84(8):810-7.
---------------------------------------------------------------------------

    In addition, the commenter noted a recently published review and 
opinion in Nature Reviews Neurology entitled ``Epilepsy: Closing the 
loop for patients with epilepsy'' (by two epilepsy specialists, Kristl 
Vonck, MD and Paul Boon, MD) that discusses the positive long-term 
results of responsive neurostimulation and the promise this therapy 
brings to a complex patient population with limited treatment options.
    Response: We appreciate the commenters' support and the citations 
of the additional supporting information.
    We did not receive any public comments on the proposed coding and 
payment of the RNS[supreg] System for FY 2016.
    After consideration of the public comments we received, we are 
finalizing our proposal to continue new technology add-on payments for 
the RNS[supreg] System for FY 2016. Because we are adopting the ICD-10 
coding system beginning October 1, 2015, we will identify and make new 
technology add-on payments for cases involving the RNS[supreg] System 
using the following ICD-10-PCS procedure code combination: 0NH00NZ 
(Insertion of neurostimulator generator into skull, open approach) in 
combination with 00H00MZ (Insertion of neurostimulator lead into brain, 
open approach). The maximum payment for a case involving the 
RNS[supreg] System will remain at $18,475 for FY 2016.
5. FY 2016 Applications for New Technology Add-On Payments
    We received nine applications for new technology add-on payments 
for FY 2016. However, two applications, the Angel Medical 
Guardian[supreg] Ischemia Monitoring Device and Ceftazidime Avibactam 
(AVYCAZ), were withdrawn from consideration for new technology add-on 
payments for FY 2016 prior to the publication of this final rule. In 
addition, in accordance with the regulations under Sec.  412.87(c), 
applicants for new technology add-on payments must have FDA approval of 
the technology by July 1 of each year prior to the beginning of the 
fiscal year that the application is being considered. One applicant did 
not receive FDA approval for its technology, Idarucizumab, by July 1, 
2015, and, therefore, is ineligible for consideration for new 
technology add-on payments for FY 2016. We are not including the 
descriptions and discussions of these three applications that were 
included in the FY 2016 proposed rule in this final rule. We note that 
we did receive public comments on all three of these applications. 
However, because the applicant either withdrew its application or the 
technology is ineligible for new technology add-on payments for FY 2016 
because the technology did not receive FDA approval by July 1, 2015, we 
also are not summarizing or responding to these public comments in this 
final rule. A discussion of the six remaining applications is presented 
below.
a. Blinatumomab (BLINCYTOTM)
    Amgen, Inc. submitted an application for new technology add-on 
payments for Blinatumomab (BLINCYTOTM), a bi-specific T-cell 
engager (BiTE) used for the treatment of Philadelphia chromosome-
negative (Ph-) relapsed or refractory (R/R) B-cell precursor acute-
lymphoblastic leukemia (ALL), which is a rare aggressive cancer of the 
blood and bone marrow. Approximately 6,050 individuals are diagnosed 
with Ph- R/R B-cell precursor ALL in the United States each year, and 
approximately 2,400 individuals, representing 30 percent of all new 
cases, are adults. Ph- R/R B-cell precursor ALL occurs when there are 
malignant transformations of B-cell or T-cell progenitor cells, causing 
an accumulation of lymphoblasts in the blood, bone marrow, and 
occasionally throughout the body. As a bi-specific T-cell engager, the 
BLINCYTOTM technology attaches to a molecule on the surface 
of the tumorous cell, as well as to a molecule on the surface of normal 
T-cells, bringing the two into closer proximity and allowing the normal 
T-cell to destroy the tumorous cell. Specifically, the 
BLINCYTOTM technology attaches to a cell identified as CD19, 
which is present on all of the cells of the malignant transformations 
that cause Ph- R/R B-cell precursor ALL and helps attract the cell into 
close proximity of the T-cell CD3 with the intent of getting close 
enough to allow the T-cell to inject toxins that destroy the cancerous 
cell. According to the applicant, the BLINCYTOTM technology 
is the first, and the only, bi-specific CD19-directed CD3 T-cell 
engager single-agent immunotherapy approved by the FDA.
    BLINCYTOTM is administered as a continuous IV infusion 
delivered at a constant flow rate using an infusion pump. A single 
cycle of treatment consists of 28 days of continuous infusion, and each 
treatment cycle followed by 2 weeks without treatment prior to 
administering any further treatments. A course of treatment consists of 
two phases. Phase 1 consists of initial inductions or treatments 
intended to achieve remission followed by additional inductions and 
treatments to maintain consolidation; or treatments given after 
remission has been achieved to prolong the duration. During phase 1 of 
a single treatment course, up to two cycles of BLINCYTO[supreg] are 
administered, and up to three additional cycles are administered during 
consolidation. The recommended dosage of BLINCYTOTM 
administered during the first cycle of treatment is 9 mcg per day for 
the first 7 days of treatment. The dosage is then increased to 28 mcg 
per day for 3 weeks until completion. During phase 2 of the treatment 
course, all subsequent doses are administered as 28 mcg per day 
throughout the entire duration of the 28-day treatment period.
    With respect to the newness criterion, the BLINCYTOTM 
technology received FDA approval on December 3, 2014, for the treatment 
of patients diagnosed with Ph- R/R B-cell precursor ALL, and the 
product gained entry onto the U.S. market on December 17, 2014. As 
stated in section II.G.1.a. of the preamble of the FY 2016 IPPS/LTCH 
PPS proposed rule and this final rule, effective October 1, 2015 (FY 
2016), the ICD-10 coding system will be implemented. In the proposed 
rule, we noted that the applicant had applied for a new ICD-10-PCS 
procedure code at the March 18-19, 2015 ICD-10-CM/PCS Coordination and 
Maintenance Committee Meeting. In this final rule, we note that the new 
ICD-10-PCS procedure codes XW03351 (Introduction of Blinatumomab 
antineoplastic immunotherapy into peripheral vein, percutaneous 
approach, new technology group 1) and XW04351 (Introduction of 
Blinatumomab antineoplastic immunotherapy into central vein, 
percutaneous approach, new technology group1) were established as shown 
in Table 6B (New Procedure Codes) and will uniquely identify procedures 
involving the BLINCYTOTM technology. More information on 
this request and the approval can be found on the CMS Web site at: 
http://www.cms.gov/Medicare/Coding/ICD9ProviderDiagnosticCodes/ICD-9-CM-C-and-M-Meeting-Materials.html and the FY 2016 New ICD-10-PCS Codes 
can be found at the CMS Web site at: http://www.cms.gov/

[[Page 49444]]

Medicare/Coding/ICD10/2016-ICD-10-PCS-and-GEMs.html.
    In the FY 2010 IPPS/RY 2010 LTCH PPS final rule (74 FR 43813 
through 43814), we established criteria for evaluating whether a new 
technology is substantially similar to an existing technology, 
specifically: (1) Whether a product uses the same or a similar 
mechanism of action to achieve a therapeutic outcome; (2) whether a 
product is assigned to the same or a different MS-DRG; and (3) whether 
the new use of the technology involves the treatment of the same or 
similar type of disease and the same or similar patient population. If 
a technology meets all three of these criteria, it would be considered 
substantially similar to an existing technology and would not be 
considered ``new'' for purposes of new technology add-on payments. For 
a detailed discussion of the criteria for substantial similarity, we 
refer readers to the FY 2006 IPPS final rule (70 FR 47351 through 
47352), and the FY 2010 IPPS/LTCH PPS final rule (74 FR 43813 through 
43814).
    With regard to the first criterion, whether a product uses the same 
or a similar mechanism of action to achieve a therapeutic outcome, we 
stated in the proposed rule our concern that the mechanism of action of 
the BLINCYTOTM technology does not appear to differ from 
those of other bi-specific T-cell engagers, which also attract the 
cancerous cell within close proximity of a normal T-cell with the 
intent of allowing the cell to get close enough to inject toxins to 
destroy the cancerous cell. There are several other BiTEs currently 
under investigation, including MT110 that are used for the treatment of 
patients diagnosed with gastrointestinal and lung cancers and are 
directed towards the EpCAM antigen, as well as MCSP-specific and CD33-
specific BiTEs used for treating patients diagnosed with melanoma and 
acute myeloid leukemia, respectively. We believe that the feature that 
distinguishes the BLINCYTOTM technology from these other bi-
specific T-cell engagers is that it specifically targets the CD19 cell. 
However, in the proposed rule, we stated that we are concerned that the 
specificity of the mechanism of action may not be sufficient to 
distinguish the BLINCYTOTM technology from other bi-specific 
T-cell engagers and, therefore, the technology bears substantial 
similarity to these other BiTEs used as current treatment options for 
Medicare beneficiaries. Further, we stated that determining that the 
BLINCYTOTM technology meets the newness criterion based on 
the specificity of the mechanism of action would set a precedent that a 
drug employing the same mechanism of action could be considered ``new'' 
based on such specificity when evaluated under the substantial 
similarity criterion.
    With respect to the second criterion, whether a product is assigned 
to the same or a different MS-DRG, the applicant maintained that ICD-9-
CM diagnosis codes 204.00 (Acute lymphoid leukemia, without mention of 
having achieved remission) and 204.02 (Acute lymphoid leukemia in 
relapse) are used to identify patients who may potentially be eligible 
for treatment using the BLINCYTOTM technology. Using these 
diagnosis codes, the applicant researched claims data from the FY 2013 
MedPAR file and found cases across a wide spectrum of MS-DRGs, not all 
of which are related to acute lymphoblastic leukemia. According to the 
applicant, 42.1 percent of all cases representing patients diagnosed 
with Ph- R/R B-cell precursor ALL were assigned to 238 MS-DRGs. 
Therefore, we believe that potential cases involving the 
BLINCYTOTM technology may be assigned to the same MS-DRG(s) 
as other cases involving bi-specific T-cell engagers used to treat 
patients with leukemia.
    With respect to the third criterion, whether the new use of the 
technology involves the treatment of the same or similar type of 
disease and the same or similar patient population, the applicant 
maintained in its application that the standard treatment for patients 
diagnosed with Ph- R/R B-cell precursor ALL currently requires the use 
of multiple, intensive chemotherapy treatment drugs in combination to 
induce remission in order to allow the patient the opportunity to 
proceed to allogenic hematopoietic stem cell transplant (alloHSCT), 
which is the next stage in the course of treatment and the only known 
curative option. The applicant asserted that the BLINCYTOTM 
technology is not substantially similar to other treatment options 
because it does not involve the treatment of the same, or similar, type 
of diseases or the same, or similar, patient population. The applicant 
stated that, although chemotherapy is a successful treatment option to 
induce remission in patients diagnosed with Ph- R/R B-cell precursor 
ALL, many of these patients relapse or stop responding to this standard 
treatment and, therefore, are unable to proceed to alloHSCT, the next 
stage of treatment. Moreover, chemotherapy toxicities can be 
cumulative. Therefore, the commenter stated, patients who have received 
intensive treatments may not be eligible for further intensive 
chemotherapy treatments and, therefore, are unable to proceed to 
alloHSCT. The applicant asserted that the BLINCYTOTM 
technology is an anti-cancer immunotherapy that has shown to be 
effective in the treatment of a patient population in which 
chemotherapy has not been successful. Moreover, the applicant asserted 
that, as an anti-cancer immunotherapy, the BLINCYTOTM 
technology does not demonstrate the cumulative side-effects typically 
associated with chemotherapy treatments and, therefore, is a treatment 
option available to patients who are not eligible for further 
chemotherapy treatments based on the risks associated with cumulative 
toxicities. However, in the proposed rule, we stated our concern that 
this specific patient population is not necessarily distinguishable 
from the overall patient population of individuals diagnosed with Ph- 
R/R B-cell precursor ALL, and we are unsure how to identify these 
patients using administrative claims data.
    In summary, we stated in the proposed rule that the 
BLINCYTOTM technology may be similar to other approved 
technologies currently available to treat the same patient population 
and medical disorders and, therefore, may not meet the newness 
criterion. In addition, we stated that the specific patient population 
targeted by the applicant may not be sufficiently distinguishable from 
the overall patient population that may be eligible for treatment using 
options that are currently available for these types of medical 
disorders. We invited public comments on if, and how, the 
BLINCYTOTM technology meets the newness criterion.
    Comment: The applicant submitted public comments that responded to 
CMS' concerns presented in the proposed rule. With regard to CMS' 
concern that the BLINCYTOTM technology's mechanism of action 
does not appear to differ from other bi-specific T-cell engagers, the 
applicant emphasized that there are no other FDA-approved bi-specific 
T-cell engager constructs currently marketed and readily available to 
Medicare beneficiaries. Therefore, the applicant stated that there are 
no previously available technologies to use as comparators for 
determining whether BLINCYTOTM bears a substantial 
similarity to other bi-specific T-cell engagers. Furthermore, the 
applicant believed that the BLINCYTOTM technology's 
mechanism of action is unique and distinguishable from all other FDA-
approved therapies because

[[Page 49445]]

it redirects the patient's immune system toward the cancerous cells, 
which leads to the specifically targeted destruction of these cells. 
The applicant noted that no other FDA-approved anti-cancer 
immunotherapy redirects the patient's immune system in such a manner 
and, therefore, the novelty of the BLINCYTOTM technology's 
bi-specific T-cell engager mechanism of action extends beyond the 
target antigen specificity. Therefore, the applicant disagreed with CMS 
that approving new technology add-on payments for this technology would 
set a precedent in which a drug employing the same mechanism of action 
could be considered new based on the specificity of its target antigen.
    With regard to CMS' concern that potentially eligible cases 
involving the BLINCYTOTM technology may be assigned to the 
same MS-DRG(s) as other cases involving target therapy used to treat 
patients diagnosed with leukemia, the applicant reiterated that there 
are currently no other FDA-approved bi-specific T-cell engager 
constructs available on the U.S. market to treat any patients, 
including Medicare beneficiaries, who have been diagnosed with Ph- R/R 
B-cell precursor ALL. As such, the applicant contended that potential 
cases eligible for the BLINCYTOTM would not be assigned to 
the same MS-DRG(s) as other cases involving other targeted therapies.
    With regard to CMS' concern that the specific population of 
patients identified by the applicant that may be eligible for treatment 
using the BLINCYTOTM technology (that is, patients who are 
ineligible for chemotherapy or for whom chemotherapy has not been 
successful) is not necessarily distinguishable from the overall patient 
population of individuals diagnosed with Ph- R/R B-cell precursor ALL, 
the applicant asserted that the approval of the new unique ICD-10-PCS 
procedure codes to be used to identify cases involving the 
BLINCYTOTM technology corroborates the recognizable 
distinction between the specific patient populations. The applicant 
believed that, if the BLINCYTOTM technology is approved for 
new technology add-on payments, CMS would be able to use claims data 
reporting these new ICD-10-PCS procedure codes to distinguish the 
population of patients treated with the BLINCYTOTM 
technology from the broader population of patients diagnosed with Ph- 
R/R B-cell precursor ALL by using these specific new codes on inpatient 
hospital claims when the codes become effective October 1, 2015.
    Response: We appreciate the details and input provided by the 
applicant in response to our concerns. We also acknowledge that new 
ICD-10-PCS procedure codes have been approved to uniquely identify 
procedures that involve the BLINCYTOTM technology, and that 
these procedure codes may ultimately be used to distinguish the 
specific patient population from the overall patient population of 
individuals diagnosed with Ph- R/R B-cell precursor ALL. After 
considering the additional information submitted by the applicant in 
response to our concerns, which supported the technology's uniqueness 
and documented the lack of an equivalent treatment option for patients 
diagnosed with Ph- R/R B-cell precursor ALL, who may be ineligible for 
current treatment options, we agree with the applicant that the 
BLINCYTOTM technology is not substantially similar to other 
technologies currently available that also are used in the treatment of 
patients diagnosed with the same or similar types of conditions. We 
believe that the BLINCYTOTM technology uses a different 
mechanism of action than other similar technologies, eligible cases 
involving treatment using the BLINCYTOTM technology would be 
grouped to a different MS-DRG than those cases treated with similar 
technologies, and the BLINCYTOTM technology would be used in 
the treatment of a different patient population than those currently 
treated with existing technologies. Therefore, we believe that the 
BLINCYTOTM technology meets the newness criterion.
    Comment: Several commenters, including medical specialty societies, 
believed that the BLINCYTOTM technology meets the newness 
criterion. The commenters agreed with the applicant's assertion that 
there are currently no other bi-specific T-cell engager constructs that 
are available on the U.S. market, and disagreed with CMS' comparisons 
between the applicant's technology and products currently approved or 
under investigation. One commenter stated that it is particularly 
notable that the BLINCYTOTM technology is the first FDA-
approved drug to be used in immunotherapy for the treatment of cancer. 
The commenter noted that, while other bi-specific T-cell engager 
constructs are in the development stages, these products have not 
reached the advanced stages of development, whereas the 
BLINCYTOTM technology is currently FDA-approved and the 
subject of phase III clinical trials for the treatment of patients 
diagnosed with Ph- R/R B-cell precursor ALL. Some commenters believed 
that the relevant comparison analysis conducted for new technology add-
on payment eligibility must be related to treatments that are currently 
available to Medicare beneficiaries. The commenters stated that it is 
inappropriate to rely upon comparison analysis that compares a 
candidate for new technology add-on payments, which requires the 
technology to have FDA approval as a condition, to technologies or 
treatments that may potentially become available in the future or that 
are currently under investigation, and sets an impossible standard to 
achieve that is also inconsistent with CMS' regulations.
    Response: We appreciate the commenters' input. We agree with the 
commenters that new technology add-on payments are intended to 
recognize the cost of new items that are not reflected in the Medicare 
claims data used to set payment rates for MS-DRGs. The costs of 
treatment options that are currently under development and not 
available on the U.S. market or to Medicare beneficiaries would not be 
reflected in the Medicare claims data used to set the payment rates for 
MS-DRGs. Therefore, these treatment options are not an appropriate 
comparator for technologies being considered for approval under the new 
technology add-on payment policy. After considering the additional 
information submitted by the applicant and the input from other 
commenters, we have determined that the BLINCYTOTM 
technology meets the newness criterion.
    As we discussed in the FY 2016 IPPS/LTCH PPS proposed rule (80 FR 
24432), with respect to the cost criterion, the applicant researched 
claims data in the FY 2013 MedPAR file, which contained inpatient 
hospital discharges from October 1, 2012, to September 30, 2013, and 
identified cases reporting ICD-9-CM diagnosis codes 204.00 (Acute 
lymphoid leukemia, without mention of having achieved remission) and 
204.02 (Acute lymphoid leukemia in relapse), which represent patients 
who may potentially be eligible for treatment using the 
BLINCYTOTM technology. The applicant found 2,649 cases 
across 246 MS-DRGs, including MS-DRGs 834 through 836 (Acute Leukemia 
without Major Operating Room Procedure, with MCC, with CC, and without 
CC/MCC, respectively) and MS-DRGs 837 through 839 (Chemotherapy with 
Acute Leukemia as Secondary Diagnosis, with MCC, with CC, and without 
CC/MCC, respectively), which represent approximately 48.1 percent of 
all cases with patients diagnosed with Ph- R/R B-

[[Page 49446]]

cell precursor ALL. The applicant also found that MS-DRG 809 (Major 
Hematological and Immunologic Diagnoses Except Sickle Cell Crisis and 
Coagulations Disorders with CC) and MS-DRG 871 (Septicema or Severe 
Sepsis without Mechanical Ventilation 96+ Hours with CC) contained 
cases that further represent 9.8 percent of all cases representing 
patients diagnosed with Ph- R/R B-cell precursor ALL. The cases 
assigned to the remaining 238 MS-DRGs represent a combined 42.1 percent 
of all cases representing patients diagnosed with Ph- R/R B-cell 
precursor ALL, with no single MS-DRG containing cases representing more 
than 2.0 percent of all cases representing patients diagnosed with Ph- 
R/R B-cell precursor ALL. The applicant also noted that when 
identifying cases that may be eligible for the BLINCYTOTM 
technology, it excluded any claims for discharges paid by Medicare 
Advantage plans, as well as any claims submitted by Medicare PPS-exempt 
cancer hospitals.
    Because the applicant was unable to provide a single estimate of 
the charges that would be avoided by using the BLINCYTOTM 
technology (that is, additional charges incurred during treatment using 
other technologies), the applicant conducted its own cost analysis 
using two scenarios for each group of MS-DRGs. The first scenario 
assumed that 50 percent of the charges for drugs would be eliminated by 
using the BLINCYTOTM technology, and the second scenario 
assumed that 75 percent of the charges for drugs would be eliminated. 
The applicant further conducted sensitivity analyses for each of the 
top eight MS-DRGs containing cases eligible for the 
BLINCYTOTM technology, as well as a sensitivity analysis for 
all of the other MS-DRGs outside of the top eight to which eligible 
cases mapped. The applicant then examined the average case-weighted 
standardized charge per case and the average case-weighted threshold 
amount for all 2,649 cases identified during FY 2013 across all 246 MS-
DRGs, and for 1,533 cases during FY 2013 across the top 8 MS-DRGs to 
demonstrate that the technology meets the cost criterion.
    Under the analysis' first scenario, 50 percent of the charges for 
drugs incurred by using other technologies were removed in order to 
exclude the charges associated with the use of these technologies. The 
applicant determined an average case-weighted threshold amount of 
$60,278 for the 2,649 Ph- R/R B-cell precursor ALL cases in the 246 MS-
DRGs identified using the thresholds in Table 10 in the FY 2015 IPPS/
LTCH PPS final rule. The applicant also determined an average case-
weighted standardized charge per case of $245,006, or $184,728 above 
the average case-weighted threshold amount. For the subset of 1,533 
cases that mapped to the top 8 MS-DRGs, the applicant determined an 
average case-weighted threshold amount of $65,478 using the threshold 
in Table 10 in the FY 2015 IPPS/LTCH PPS final rule. The applicant also 
determined an average case-weighted standardized charge per case of 
$249,354, or $183,876 above the average case-weighted threshold amount. 
Based on the applicant's analyses, we believe that the 
BLINCYTOTM technology meets the cost criterion under the 
first scenario.
    Under the second scenario, the applicant removed 75 percent of 
charges for drugs incurred by using other technologies in order to 
exclude the charges associated with the use of these technologies. The 
applicant determined an average case-weighted threshold amount of 
$60,278 for the 246 MS-DRGs identified using the thresholds from Table 
10 in the FY 2015 IPPS/LTCH PPS final rule. The applicant determined an 
average case-weighted standardized charge per case of $239,321, or 
$179,043 above the average case-weighted threshold amount. For the 
subset of 1,533 cases that mapped to the top 8 MS-DRGs, the applicant 
determined an average case-weighted threshold amount of $65,478 using 
the thresholds from Table 10 in the FY 2015 IPPS/LTCH PPS final rule. 
The applicant determined an average case-weighted standardized charge 
per case of $242,423, or $176,945 above the average case-weighted 
threshold amount. Based on the applicant's analyses, we believe that 
the BLINCYTOTM meets the cost criterion under the second 
scenario.
    In conducting the above analyses, the applicant summarized the 
charges from the claims it identified and standardized the charges 
using an unspecified data source. The applicant then inflated all 
charges from FY 2013 to FY 2015 using the 10.4427 percent inflation 
factor used by CMS to update the FY 2015 outlier threshold. In 
determining the costs for the technology per case, the applicant also 
assumed that the BLINCYTOTM technology would be administered 
for 28 days during each inpatient stay. The applicant also assumed a 
hospital markup of 2.0 percent, and applied this amount to its 
estimated charges per case.
    In the FY 2016 IPPS/LTCH PPS proposed rule (80 FR 24432 through 
24433), we presented three concerns regarding the applicant's 
methodology and assumptions used in its cost analyses. We stated that 
the applicant did not specify whether it used the FY 2015 IPPS final 
rule impact file or another data source to standardize the charges per 
case for this technology. We also stated our concern that the applicant 
did not provide a basis for the hospital markup assumed when conducting 
its cost analyses. Unless the applicant provided this information, we 
stated that we are unable to determine whether the cost of the 
technology per case has been calculated appropriately. Moreover, we 
stated our concern that including charges representative of a full 28-
day treatment cycle is not appropriate for the purpose of calculating 
the charges associated with the BLINCYTOTM technology in 
order to determine whether the technology meets the cost criterion. 
According to the applicant, clinical trial data demonstrate that there 
are large subsets of patients who require inpatient care for the full 
28-day treatment cycle because of the extreme clinical conditions 
relating to patients diagnosed with Ph- R/R B-cell precursor ALL. 
However, the applicant also conceded that only 25 percent of patients 
enrolled in the U.S. clinical trial were hospitalized for the full 28-
day treatment cycle, and only 38 percent of these patients were over 
the age of 65. This caused us concern regarding whether the methodology 
used by the applicant in its cost analysis is appropriate.
    We invited public comments on if, and how, the 
BLINCYTOTM technology meets the cost criterion, specifically 
in regard to our concerns related to the applicant's methodology.
    Comment: The applicant submitted further information in response to 
CMS' concerns. The applicant indicated that it used the FY 2015 IPPS 
final rule impact file and other instructions included in Technical 
Appendix B of the FY 2016 new technology add-on payment application to 
standardize the charges per case for potentially eligible cases for the 
BLINCYTOTM technology representing patients diagnosed with 
Ph- R/R B-cell precursor ALL under all of the scenarios. The applicant 
also provided more information regarding the basis of its markup values 
used when conducting sensitivity analyses to demonstrate that the 
BLINCYTOTM technology meets the cost criterion. 
Specifically, the applicant stated that it used a markup of 100 
percent, which is a cost-to-charge ratio (CCR) of 0.5, and further 
noted that the charges for the BLINCYTOTM technology would 
be included in the pharmacy charge category on an inpatient hospital's 
claim. The applicant identified the national average cost-to-charge 
ratio of

[[Page 49447]]

0.192 for the pharmacy charge category that was calculated in the FY 
2015 IPPS/LTCH PPS final rule. The applicant stated that this CCR 
indicated that charges in this category were 420 percent higher than 
the costs. However, the applicant did not believe that a 420-percent 
markup was appropriate for the purposes of new technology add-on 
payment MS-DRG case-weighted threshold assessment for the cases 
eligible for the BLINCYTOTM technology. Therefore, the 
applicant indicated that it reverted to the use of a more conservative 
markup of 100 percent in its analyses for eligibility for new 
technology add-on payments to determine the average case-weighted 
standardized charges per case. The applicant noted that, if it were to 
have used the national average markup for the pharmacy charge center of 
420 percent, the charges associated with the BLINCYTOTM 
technology would be significantly higher than that which is indicated 
in its analyses, further exceeding the MS-DRG case-weighted threshold 
amount and demonstrating that the BLINCYTOTM technology 
meets the cost criterion.
    Furthermore, the applicant maintained that including charges 
representative of a full 28-day treatment cycle is appropriate for the 
purpose of calculating the charges associated with the 
BLINCYTOTM technology. However, the applicant indicated that 
it conducted additional sensitivity analyses across both of the 
original scenarios used in the application in which it assumed no 
hospital markup on the charges associated with the 
BLINCYTOTM technology to demonstrate the standardized 
charges per case under different scenarios for the variable number of 
inpatient days; a scenario for standardized charges per case using the 
full 28 inpatient days, standardized charges per case using the mean 
total inpatient days for cycle 1 (21.2 days), and standardized charges 
per case using the mean total inpatient days per cycle across all 
cycles (16.2 days). Based on the results of these sensitivity analyses, 
the applicant continued to believe that the BLINCYTOTM 
technology meets the cost criterion, regardless of the number of 
assumed inpatient days and the associated charge markup. The applicant 
determined that, prior to the inclusion of any charges associated with 
the BLINCYTOTM technology, the case-weighted average 
standardized charge per case under all scenarios exceeds the average 
case-weighted threshold amounts for the respective MS-DRGs, further 
demonstrating that the target cases potentially eligible for the 
BLINCYTOTM technology have significantly higher costs to 
provide the standard of care.
    Response: We appreciate the applicant's submittal of the additional 
information and input. After reviewing the sensitivity analyses 
included in the original application and subsequent analyses included 
in the applicant's public comment, we have determined that the 
BLINCYTOTM technology meets the cost criterion.
    As discussed in the FY 2016 IPPS/LTCH PPS proposed rule (80 FR 
24433 and 24434), with respect to the substantial clinical improvement 
criterion, the applicant asserted that the BLINCYTOTM 
technology represents a substantial clinical improvement for the 
treatment of patients diagnosed with Ph- R/R B-cell precursor ALL 
because it offers a treatment option for patients who may be 
unresponsive to currently available options for treatment, decreases 
the rate of subsequent therapeutic interventions for patients who might 
not have otherwise achieved remission, and reduces mortality. The 
applicant provided data analysis results from four sources to 
demonstrate that the technology represents a substantial clinical 
improvement. These sources include a historical literature search, a 
model-based meta-analysis (Study 118427), a historical comparator data 
(Study 20120310), and a pivotal clinical trial (Study MT 103-211). We 
summarize the results from each of these sources below.
     The historical literature search revealed that superior 
regimens among currently used chemotherapeutic options result in a 
complete remission rate ranging from 18.0 percent to 38.6 percent, a 
median overall survival rate for patients experiencing early first 
relapse (<12 months) at 4.7 months, and a median overall survival rate 
for patients experiencing second or later relapse at 3 months. However, 
there are several limitations to using recent literature as a 
historical comparison for studies relating to patients diagnosed with 
Ph- R/R B-cell precursor ALL, including differences in patient 
populations or study design characteristics across published studies, 
which make it difficult to formulate absolute comparisons with regard 
to data obtained from the BLINCYTOTM pivotal clinical trial. 
Therefore, the applicant conducted a model-based meta analysis (Studies 
118427 and 119384), and a historical comparator study (Study 20120310) 
to account for these differences.
     In the model-based meta analysis (MBMA), the endpoints of 
complete remission (CR), duration of complete remission (DCR), and 
overall survival (OS) rate models were used to predict the efficacy of 
the BLINCYTOTM technology in cases representing patients 
diagnosed with Ph- R/R B-cell precursor ALL relative to patients 
treated using existing therapies. Simulations based on the MBMA for 
adult patients diagnosed with Ph- R/R B-cell precursor ALL projected a 
poor outcome with existing salvage therapies, and a significant 
increase in the proportion of CR, DCR, and OS rates in a population 
with the same summary prognostic factors as those enrolled in the 
BLINCYTOTM study MT103-211. For adult patients diagnosed 
with Ph- R/R B-cell precursor ALL who were treated with existing 
salvage therapies and having the same summary prognostic factors as 
those enrolled in the BLINCYTOTM study MT 103-211, the 
projected proportion of CR was 0.121 (95 percent CI: 0.041 to 0.341), 
the median DCR rate was 4.9 months (95 percent CI: 2.5 to 9.2 months), 
and the median OS rate was 3.9 months (95 percent CI: 3.0 to 4.7 
months). For adult patients diagnosed with Ph- R/R B-cell precursor ALL 
having the same summary prognostic factors as those enrolled in the 
BLINCYTOTM study MT 103-211, treatment using the 
BLINCYTOTM technology when compared with existing salvage 
therapies is expected to have an odds ratio for proportion of CR of 
3.50 (95 percent CI: 1.63 to 8.40), a hazard ratio for DCR of 0.53 (95 
percent CI: 0.30 to 0.89), and a hazard ratio for OS of 0.60 (95 
percent CI: 0.47 to 0.76). The applicant maintained that these results 
suggest that the BLINCYTOTM technology is associated with a 
reduced mortality rate and improved clinical outcomes when compared to 
standard chemotherapy treatment options.
     A historical comparator study was also conducted to obtain 
patient-level data for standard of care treatment options for patients 
experiencing early first relapse, refractory relapse after HSCT, and 
second or greater relapse in the same patient population as targeted in 
the BLINCYTOTM pivotal clinical trial. Study 20120310 was a 
retrospective pooled analysis of historical data available from 1990 to 
2014 on hematological remission and survival rates among patients 
diagnosed with Ph- R/R B-cell precursor ALL who were treated with 
standard of care therapies. The primary study endpoint was CR following 
relapse or salvage treatment; and secondary endpoints included 
estimates of OS rates, RFS rates, and the proportion of patients

[[Page 49448]]

receiving alloHSCT. The weighted median OS rate for 1,112 patients 
based on available data was 3.3 months (95 percent CI: 2.8 to 3.6 
months) and was calculated from the start of the last salvage treatment 
or the first relapse (if start of the last salvage date was 
unavailable) until the time of death. The weighted OS rate at 6 and 12 
months was 30 percent (95 percent CI: 27 percent to 34 percent) and 15 
percent (95 percent CI: 13 percent to 18 percent), respectively. Among 
the patients who achieved CR based on available data (108 patients), 
the weighted median RFS rate was 5.0 months (95 percent CI: 1.2 to 6.6 
months). Among the 808 patients who received alloHSCT after salvage 
therapy based on available data, 18 percent (95 percent CI: 15 percent 
to 21 percent) received alloHSCT following the last line of salvage 
therapy, and among patients who achieved CR, 7 percent (95 percent CI: 
5 percent to 9 percent) received alloHSCT. The applicant maintained 
that these results highlight the poor health care outcomes for patients 
treated with standard chemotherapy and that BLINCYTOTM 
represents a significant improvement.
     BLINCYTOTM study MT 103-211 is a pivotal 
clinical study providing efficacy data for the BLINCYTOTM 
technology used for the treatment of adult patients diagnosed with Ph- 
R/R B-cell precursor ALL. It is a phase 2, single-arm study that 
included a particularly difficult patient population to treat 
consisting of patients diagnosed with--Ph- R/R B-cell precursor ALL who 
experienced either: (1) R/R after remission during 12 months or less of 
the first salvage treatment; (2) R/R after the first salvage treatment; 
or (3) R/R within 12 months after receiving alloHSCT. The primary 
endpoint was the rate of CR plus CRh within the first 2 cycles of 
treatment using the BLINCYTOTM technology. The key secondary 
endpoints include best overall response within 2 cycles of treatment 
using the BLINCYTOTM technology, RFS, time of hematological 
relapse, OS rates, and the proportion of patients eligible for alloHSCT 
who underwent the procedure after receiving treatment using the 
BLINCYTOTM technology. An analysis of data from the pivotal 
trial showed that 40 percent of patients treated with the 
BLINCYTOTM technology who achieved CR or CRh were able to 
proceed to alloHSCT. A secondary analysis from the pivotal study found 
that in patients who achieved CR or CRh and had a minimal residual 
disease assessment during the first 2 cycles, the MRD response rate 
(little or no evidence of disease even at the molecular level) was 82.2 
percent. The applicant asserted that this finding is significant 
because MRD is often a harbinger of relapse and a poor prognostic 
factor for patients diagnosed with Ph- R/R B-cell precursor ALL.
    We stated in the proposed rule our concern that the data provided 
from the clinical studies are not sufficient to demonstrate that the 
BLINCYTOTM technology meets the substantial clinical 
improvement criterion. For example, the BLINCYTOTM study MT 
103-211 was not randomized or blinded, and was comprised of a small 
sample group of 189 patients with a median age of 39 years. We further 
stated our concern that the sample group studied during the clinical 
trial is not appropriate to determine if the technology represents a 
substantial clinical improvement in treatment options available for the 
Medicare patient population. Moreover, we stated our concern that 
meaningful conclusions cannot be drawn from the results of this study 
because of the lack of a control group.
    With regard to the applicant's assertion that the 
BLINCYTOTM technology offers a treatment option for patients 
who may be unresponsive to currently available treatment modalities, 
the applicant specifically focused on how the BLINCYTOTM 
technology represents a treatment option for a patient population in 
which chemotherapy has proven to be unsuccessful, or for whom intensive 
chemotherapy treatment is not possible because of the risks associated 
with exposure to cumulative toxicities. The applicant believed that the 
MBMA, the historical comparator study, and the BLINCYTOTM 
study MT 103-211, which is a pivotal clinical trial sufficiently 
isolate this patient population in order to measure specific health 
care outcomes. We agreed with this assertion. However, we stated our 
concerns with the isolated patient population are that it is comprised 
of and represents a small sample group of patients whose age 
demographic is much younger than the age demographic of eligible 
Medicare beneficiaries.
    The applicant also asserted that the BLINCYTOTM 
technology decreases the rate of subsequent therapeutic interventions 
for patients who might not have otherwise achieved remission. In other 
words, because treatment with the BLINCYTOTM technology 
appears to increase the possibility of some patients achieving 
remission, the applicant maintained that these patients would receive 
fewer therapeutic interventions and become eligible to receive 
alloHSCT. We stated that we believe that it is difficult to determine 
what services and therapeutic interventions these patients would have 
required if they had not achieved remission, and we are not convinced 
that treatment using the BLINCYTOTM technology leads to a 
decrease in additional therapeutic interventions. In the proposed rule, 
we also noted that patients who successfully achieve remission proceed 
to alloHSCT and, therefore, receive a different set of subsequent 
therapeutic interventions.
    With regard to the applicant's assertion that the 
BLINCYTOTM technology reduces mortality rates, we noted that 
the applicant did not directly capture mortality rates as an endpoint 
in the BLINCYTOTM pivotal study (MT 103-211), although 
mortality was analyzed during the other three studies that support the 
new technology add-on payment application. We noted that the data and 
the MBMA's results included with the technology's application used an 
OS odds ratio as a measure of mortality, and were developed from 18 
studies published between January 1995 and December 2012. We stated our 
concern that relying on the results of data using a measure of 
mortality that is contingent upon studies completed in the 1990s 
presents a limitation in regard to the methodology used in the 
applicant's analysis. Advances in overall oncology care over the past 2 
decades may invalidate the patient population represented in these 
studies as a comparison group. Therefore, we stated that we find it 
difficult to attribute the reduced mortality rate and improved clinical 
outcomes revealed by these studies to the efficacy of the 
BLINCYTOTM technology.
    We invited public comments on if, and how, the 
BLINCYTOTM technology meets the substantial clinical 
improvement criterion, specifically in regard to our specified 
concerns.
    Comment: The applicant submitted public comment in response to CMS' 
concerns presented in the proposed rule which asserted that the sample 
size and lack of a control arm in the BLINCYTOTM study MT 
103-211is due to the rarity and fatality of Ph- R/R B-cell precursor 
ALL, which made it difficult to find patients to participate in the 
trials. Nevertheless, the applicant stated that the 
BLINCYTOTM study MT 103-211 is the largest Ph- R/R B-cell 
precursor ALL clinical trial reported to date, and was conducted within 
the limits of its capabilities because larger studies can only be 
conducted by national or international cooperative study groups. The 
applicant also

[[Page 49449]]

maintained that the sample size is representative of the Medicare 
patient population who have been diagnosed with Ph- R/R B-cell 
precursor ALL in relapse in spite of the median age of 39 years, and 
patients who were Medicare beneficiaries due to disability. Moreover, 
the applicant noted that MedPAR data demonstrate that 60 percent of the 
479 inpatient stays for patients diagnosed with Ph- R/R B-cell 
precursor ALL in relapse in FY 2014 were Medicare patients under the 
age of 65. In addition, the applicant pointed out that single-arm 
trials are common in Phase II testing, especially when there is a low-
volume patient population with patients who have very poor prognosis, 
such as the patient population represented in the BLINCYTOTM 
study MT 103-211.
    According to the applicant, the design of the pooled analysis of 
historic data provides a viable measure to determine that the 
BLINCYTOTM technology represents a substantial clinical 
improvement as compared to characteristically matched patients in a 
control arm that were treated with other currently available options 
that may not be appropriate or for which a patient's status prohibits 
eligibility. The applicant also conducted propensity score analyses to 
further investigate and support historical data that was used as a 
comparator and found that the majority of patients in Study 20120310 
were diagnosed and treated in the year 2000 or later. Moreover, the 
applicant believed that the results of the majority of propensity score 
analyses demonstrated an improvement in overall survival (OS) compared 
to standard of care chemotherapy. Further, the applicant defended the 
weighted value of outcome of OS rates in the BLINCYTOTM 
study MT103-211 as a commonly used endpoint in oncology trials, and a 
more clinically meaningful endpoint than mortality rates given the 
rapidly progressive and fatal nature of Ph- R/R B-cell precursor ALL 
diagnoses. The applicant asserted that CMS should not use, as a metric 
to determine if the BLINCYTOTM represents a significant 
clinical improvement, that additional therapeutic interventions 
associated with alloHSCT are available, given that alloHSCT is the only 
way to provide patients with a potential cure for diagnoses of Ph- R/R 
B-cell precursor ALL.
    Response: We appreciate the applicant's submittal of the additional 
information and the explanation of the study design and endpoints in 
light of the small and rare population of patients diagnosed with Ph- 
R/R B-cell precursor ALL. We agree with the applicant that, in view of 
the MedPAR data and the difficulty in finding enough patients to 
include in a trial and a comparator arm, the sample group studied 
during the BLINCYTOTM MT 103-211 pivotal clinical trial 
sufficiently isolates the patient population that the 
BLINCYTOTM technology is intended to treat. We also agree 
with the applicant that, given the challenges of conducting a trial 
with a control arm and the use of historical comparator data, the 
BLINCYTOTM study MT 103-211 is a reasonable study to show 
substantial clinical improvement at this junction. However, if approved 
for new technology add-on payments, we would continue to monitor 
ongoing Phase III studies to determine if the substantial clinical 
improvement demonstrated in the BLINCYTOTM study MT 103-211 
continues to exist.
    Comment: Several commenters believed that the BLINCYTOTM 
technology demonstrates significant clinical improvement over existing 
therapies, and stated that patients who have not responded positively 
to other treatments have been able to benefit from treatment using the 
BLINCYTOTM technology and its use creates a bridge to 
alloHSCT, possibly recognized as a transplant procedure that proves to 
be a potentially curative treatment. While corroborating the 
applicant's statements regarding the design of the 
BLINCYTOTM MT103-211 pivotal trial, one commenter pointed 
out that a response rate of 43 percent complete remission or complete 
remission with partial hematologic recovery (CR/CRh) as achieved in the 
BLINCYTOTM study MT103-211 is impressive using a population 
of patients diagnosed with relapsed Ph- R/R B-cell precursor ALL. Other 
commenters acknowledged that, while the BLINCYTOTM has its 
own set of unique toxicities, such as cytokine release syndrome and 
neurotoxicity, these conditions are severe in only a small minority of 
patients. Another commenter stated that its experience with most 
patients has proven that the use of the BLINCYTOTM 
technology is well tolerated, and its effects positively contrast to 
the severe side effects associated with multi-agent chemotherapy 
salvage regiments that these patients would otherwise experience if 
access to treatment with the BLINCYTOTM technology were not 
available. The commenter further noted that, if patients treated using 
the BLINCYTOTM technology respond positively and it is well-
tolerated, the patient has the option of becoming a candidate for 
alloHSCT. As a result, the commenter pointed out that positive response 
to treatment using the BLINCYTOTM lessens the need for 
patient's excessive exposure to toxic multi-agent chemotherapy, which 
has a lower response rate and