IPPS Final Rule Changes for Fiscal Year 2020

IPPS Final Rule Changes for Fiscal Year 2020

By Margaret M. Foley, PhD, RHIA, CCS


The Inpatient Prospective Payment System (IPPS) Final Rule for Fiscal Year (FY) 2020 for acute care hospital discharges became effective on October 1, 2019. The final rule was displayed in the Federal Register on August 2, 2019, with a publication date of August 16, 2019. This article provides a synopsis of the final rule content and should not be considered comprehensive.

CC and MCC Severity Level Designations

In the final rule, the Centers for Medicare and Medicaid Services (CMS) announced that it was postponing implementation of the proposed changes to the complication or comorbidity (CC) and major complication or comorbidity (MCC) severity designations for nearly 1,500 diagnosis codes. In response to public comment, CMS is allowing for additional time to elicit feedback on the proposed changes to CC and MCC severity level designations.

The final rule implements the proposed changes in severity designation for all codes in category Z16, resistance to antimicrobial drugs. The severity level for the Z16 codes changed from a non-CC to a CC designation.

MS-DRG Changes

CMS implemented version 37.0 of the MS-DRG Grouper for fiscal year 2020. With the creation of two new MS-DRGs and the deletion of two others, the number of MS-DRGs remains the same at 761. The two new MS-DRGs for FY 2020 are:

  • MS-DRG 319 (Other Endovascular Cardiac Valve Procedures with MCC)
  • MS-DRG 320 (Other Endovascular Cardiac Valve Procedures without MCC)

The creation of MS-DRGs 319 and 320 was part of the revision of the grouper logic for transcatheter cardiac valve procedures, which also resulted in title revisions to MS-DRGs 266 (Endovascular Cardiac Valve Replacement and Supplement Procedures with MCC) and 267 (Endovascular Cardiac Valve Replacement and Supplement Procedures without MCC). The two deleted MS-DRGs for FY 2020 are:

  • MS-DRG 691 (Urinary Stones with ESW Lithotripsy with CC/MCC)
  • MS-DRG 692 (Urinary Stones with ESW Lithotripsy without CC/MCC)

MS-DRGs 691 and 692 were deleted due to a decreased usage of extracorporeal shockwave lithotripsy (ESWL) to treat urinary stones in the inpatient setting. Related to this deletion, MS-DRGs 693 and 694 were retitled Urinary Stones with MCC and Urinary Stones without MCC, respectively.
The codes for peripheral extracorporeal membrane oxygenation (ECMO) were reassigned to MS-DRG 003 (ECMO or Tracheostomy with Mechanical Ventilation > 96 Hours or Principal Diagnosis Except Face, Mouth and Neck with Major OR Procedure). This was a significant change due to the relative weight of 18.9539 for MS-DRG 003. The movement of the peripheral ECMO codes also resulted in changes in the title of MS-DRGs 207, 291, 296, and 870 to no longer reflect the “or Peripheral ECMO” terminology.

Other significant changes made to the MS-DRG grouper logic include:

  • Reassignment of cases with a principal diagnosis of pulmonary embolism “with acute cor pulmonale” to the higher-weighted and retitled MS-DRG 175 (Pulmonary Embolism with MCC or Acute Cor Pulmonale)
  • Addition of principal diagnoses that result in the assignment of MS-DRGs 485, 486, and 487 (Knee Procedure with Principal Diagnosis of Infection with MCC, with CC, and without CC/MCC, respectively)
  • Addition of principal diagnosis codes for neuromuscular scoliosis and secondary scoliosis of non-cervical sites to MS-DRGs 456, 457, and 458 (Spinal Fusion Except Cervical with Spinal Curvature, Malignancy or Infection or Extensive Fusion with MCC, with CC, and without CC/MCC respectively)
  • Reassignment of carotid artery stent and related procedures to more clinically appropriate MS-DRGs
  • Reclassification of code O99.89, Other specified diseases and conditions complicating pregnancy, childbirth and the puerperium, from a postpartum condition to an antepartum condition under major diagnostic category 14 Pregnancy, Childbirth and the Puerperium
  • Revisions to the grouper logic to prevent cases from grouping to an MS-DRG for an operating room (OR) procedure unrelated to the principal diagnosis (MS-DRGs 981, 982, 983 and 987, 988, and 989)
OR and Non-OR Procedural Designation Changes

Each year, CMS reviews requests for changes in designations of specific ICD-10-PCS procedure codes as either an OR or non-OR procedure. This year, 13 codes for diagnostic bronchiolar lavage procedures were changed from OR procedures to non-OR procedures. Two other ICD-10-PCS procedure codes were also changed from OR to non-OR procedures: 0W9J3ZX, Drainage of pelvic cavity, percutaneous approach, diagnostic; and 0FPG30Z, Removal of drainage device from pancreas, percutaneous approach. ICD-10-PCS code 04L23DZ, Occlusion of gastric artery with intraluminal device, percutaneous approach was upgraded from a non-OR to an OR procedure.

In the final rule, CMS also announced plans for a multi-year project to review currently designated OR procedures that may no longer warrant that designation. Conversely, procedures that are currently designated as non-OR procedures will also be reviewed to determine if they warrant an OR designation. CMS solicited public comments on potential criteria that could be used in future versions of the grouper to consider whether a procedure is designated as OR or non-OR.

New Technology Add-On Payments

CMS’s new technology add-on payment policy provides additional payments for cases with high costs involving eligible new technologies. Nine of the 13 submissions for consideration for new technology add-on payments were approved for FY 2020. They are:

  • Azedra®
  • T2 Bacteria Test Panel
  • ERLEADA™ (apalutamide)
  • Jakafi® (ruxolitinib)
  • Xospata®
  • CABLIVI® (caplacizumab)
  • Balversa™ (erdafitinib)
  • Spravato™ (esketamine)
  • Elzonris™

The following nine items continue to be eligible for new technology add-on payments in FY 2020:

  • Remede® System
  • AndexXa™
  • Sentinel® Cerebral Protection System™
  • Aquabeam®
  • ZEMDRI™ (Plazomicin)
  • Kymriah® and Yescarta®
Post-acute Transfer and Special Payment Policy

MS-DRGs 273 and 274 (Percutaneous Intracardiac Procedures w MCC and w/o MCC, respectively) were removed from the list of MS-DRGs that are subject to the post-acute care transfer policy and the special payment policy.

Medicare Code Editor

The Medicare Code Editor’s (MCE) age conflict edits detect inconsistencies between a patient’s age and diagnosis on his or her record. The allowable age range for maternity diagnoses was expanded to nine to 64 years (inclusive). The diagnosis codes I46.2, Cardiac arrest due to underlying cardiac condition, and I46.8, Cardiac arrest due to other underlying condition, were added to the Unacceptable Principal Diagnosis Category edit code list.
Changes were also made to the MCE for new, revised, and deleted ICD-10-CM and ICD-10-PCS codes effective for FY 2020, as appropriate. CMS also announced plans to review the MCE limited coverage and noncovered procedure edits that also may be present in other claims processing systems used by CMS Medicare administrative contractors. CMS invited public comment on this review.

Additional Information

The IPPS FY 2020 rule also contains information on payment adjustments to the following programs: Hospital-Acquired Condition Reduction Program; Hospital Value-Based Purchasing (VBP) initiative; and the Hospital Readmission Reduction Program. The full text of the IPPS regulation and related tables are available online at https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/AcuteInpatientPPS/FY2020-IPPS-Final-Rule-Home-Page.html?DLSort=0&DLEntries=10&DLPage=1&DLSortDir=ascending.

A detailed summary of the FY 2020 IPPS changes in MLN Matters is available on the CMS website.

Margaret M. Foley (Mfoley01@temple.edu) is an associate professor in the College of Public Health at Temple University in Philadelphia, PA.


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