For quite some time now CMS has reiterated their plan to perform a comprehensive assessment of current ICD-10-CM complication and comorbidity (CC) and major complication and comorbidity (MCC) designations. We’ll refer to this process as reclassification or reclass. Reclass intentions were publicized in both the Proposed and Final changes to the Inpatient Prospective Payment System (IPPS) for the past few years, but let’s face it, reading the Federal Register takes a healthy combination of patience and attention to detail so it’s not inconceivable that changes, even changes of this magnitude, can be overlooked.

This year’s proposed rule, published on April 23, 2019 includes the long-awaited outcomes of CMS’s reclass analysis, the results of which are astonishing in terms of their breadth and potential impact to MS-DRG classification, and by extension, facility reimbursement, and other downstream dependencies.

Here, I’ll focus on the data points associated with the reclass as the relative importance of these changes to code severity levels should be self-evident. This discussion also assumes that the proposed revisions will become final revisions. While unlikely, there is a possibility that the proposed changes are finalized in part, or perhaps not all.

Key Information

For starters, a severity level change has been recommended for 1,492 ICD-10-CM codes, this includes downgrades (instances where a code’s severity level is being reduced) and upgrades (instances where a code’s severity level is being increased). Downgrades outpace upgrades at a rate of 7:1.

  • The number of codes designated as an MCC will decrease from 3,244 to 3,099, – 4. 5% by volume.
  • The number of codes designated as a CC will decrease from 14,528 to 13, 691, – 5. 8% by volume.
  • The number of codes that are neither a CC nor an MCC will increase from 54,160 to 55,142, + 1. 8% by volume.

Percentage-wise, the large shift of many codes from CC class to non-CC/MCC class is somewhat masked by the size of the bucket into which they are being shifted. CMS modeled their proposed changes by regrouping nearly 9 million claims through DRG logic, incorporating the proposed severity level changes along the way.

  • The number of cases reporting at least one or more secondary diagnosis codes assigned to the MCC severity level decreased by 4. 7%.
  • The number of cases reporting at least one or more secondary diagnosis codes assigned to the CC severity level decreased by 0. 2%.
  • Lastly, the number of cases reporting no secondary diagnosis codes assigned to the MCC or CC severity level increased by 4. 9%.

The biggest shifts are at the ends (e. g., with MCC, without CC/MCC). Surprisingly ‘with CC’ DRGs were not significantly affected, suggesting that CC fallback options are present more often than not.

What to Expect

Let’s take it a step further and assess the impact of certain proposed changes in the context of real historical code volume. Doing so allows us to get a better read on true impact.

It’s less important to know the number of codes that are being reclassified.
It’s more important to understand how often we code the codes that are being reclassified.

For convenience, we’ll use 2017 Hospital Inpatient Diagnosis Code Frequency data made available by the California Office of Statewide Health Planning and Development (OSHPD) as the basis of this analysis. The OSHPD data contemplates over 36 million secondary diagnosis code assignments, which serves as a reasonable proxy for national comparative data. In other words, the proportions and percentages cited here should give us a pretty good idea of what we can expect.

  1. Use the code level reclass information available through CMS
  2. Bump the code level reclass information against recent California code volumes
  3. Extend the analysis to contemplate not only the count of the affected codes, but the relative frequency of the affected codes

MCCs Downgraded to CC Status

While MCC to CC downgrades affected approximately 4% of MCC codes, MCC to CC downgrades represented approximately 16% of MCC volume.

Notable MCC to CC downgrades include end-stage renal disease (ESRD), protein-calorie malnutrition, and Stage 3 and Stage 4 pressure ulcers. Collectively, these three concepts represented approximately 12% of MCC volume. ESRD alone accounted for over 6% of MCC volume.

MCCs Downgraded to Non-CC/MCC Status

MCC to Non-CC/MCC downgrades affected less than 1% of MCC codes and approximately 1% of MCC volume.

Notable MCC to Non-CC/MCC downgrades include certain sickle cell disorder codes and cardiac arrest.

CCs Downgraded to Non-CC/MCC Status

By far the largest downgrade category, CC to Non-CC/MCC downgrades affected approximately 8% of CC codes, but an incredible 20% of CC volume.

Notable CC to Non-CC/MCC downgrades include acute blood loss anemia, extreme BMIs, all variants of chronic congestive heart failure, chronic kidney disease stage 4 and 5, and all neoplasm codes that were currently assigned to CC status Collectively, these concepts represented nearly 15% of CC volume. Neoplasms alone accounted for over 1/3 of that 15%.

Non-CC/MCC Status Codes Upgraded to CCs

Non-CC/MCC to CC upgrades affected less than 1% of Non-CC/MCC codes and approximately 2% of Non-CC/MCC volume.

As mentioned previously, downgrades exceeded upgrades by about a 7-to-1 margin. Overall, the codes that were upgraded are not nearly as prevalent as many of the codes that were downgraded. Some of the upgrade wins in this category include stage 1 and stage 2 pressure ulcers, homelessness, and various forms of antibiotic resistance.

CC Status Codes Upgraded to MCCs

CC to MCC upgrades affected less than 1% of CC codes and approximately 1% of CC volume.

Notable upgrades in this category include moderate protein-calorie malnutrition and bacteremia. The upgrade of bacteremia to MCC status effectively eliminates the longstanding and profound code level severity divide between sepsis and bacteremia.

Conclusions

It’s hard to argue with CMS’s reclassification methodology. In fact, CMS’s statistical analysis “indicates that the proposed severity level changes increase the explanatory power of the grouper in capturing differences in expected cost between the MS-DRGs and thus would improve the overall accuracy of the IPPS payment system.”

The results of CMS’s reclassification are astonishing in terms of their breadth and potential impact to MS-DRG classification, and by extension, facility reimbursement and other downstream dependencies.

This does not change the fact that many of the downgraded codes are needle movers for most hospitals, deeply ingrained in DRG calculation and CDI pathways alike. They will be missed. Additionally, these changes will require organizations to recalibrate CC/MCC capture rate baselines.

A future article will dive deeper into adaptive strategies to help mitigate the impact associated with these severity level adjustments.

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