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IPPS FY20: Follow the Numbers!

by Laurie M. Johnson, MS, RHIA, FAHIMA; Senior Consultant; Revenue Cycle Solutions

The Inpatient Prospective Payment System (IPPS) Proposed Rule for Fiscal Year 2020 was released on April 23, 2019 and required 1,824 pages to outline the upcoming changes. The proposed rule makes sweeping changes in the designations of diagnosis severity (CC/MCC), Medicare-Severity Diagnosis Related Groups (MS-DRGs), the Hospital Acquired Conditions (HAC) Reduction Program, New Technology Add-on Payment (NTAP), and diagnosis/procedure codes.

What follows is a brief “Cliff Notes” summary of significant changes proposed for FY20.

Changes to CC/MCC
Centers for Medicare and Medicaid Services (CMS) reviewed data regarding CC/MCC and made 1,492 adjustment recommendations. For example, end stage renal disease, severe malnutrition, and stage 3 and stage 4 pressure ulcers will no longer be MCCs. There are diagnoses that will be elevated to MCC such as moderate protein-calorie malnutrition, bacteremia, and candidal esophagitis.

Changes to MS-DRGs
There are twenty-four (24) changes within MS-DRGs including the adjustments of MS-DRGs 981-983 and 987-989 which are the MS-DRGs for diagnosis-procedure mismatches. There is some good news such as the movement of peripheral ECMO to MS-DRG 003 resulting in a positive shift in the relative weight. Another positive shift is re-assignment of secondary diagnosis codes for cor pulmonale from MS-DRG 176 to MS-DRG 175. Two (2) MS-DRGs are added and two (2) are deleted.

Changes to HAC
If the proposed changes in diagnosis severity designation are finalized, the HAC Reduction Program will be adding all pressure ulcers to the program. The downstream effect is that stage 1 and stage 2 pressure ulcers that were not present on admission will impact the quality score. According to the Official Coding and Reporting Guidelines, pressure ulcers that evolve from one stage to another are both coded for an admission with updated stage as not present on admission. The update to the HAC Reduction Program could mean an increase in pressure ulcers that are not present on admission.

Changes to NTAP
Medical device and pharmaceutical companies will realize the importance of proposed changes in New Technology Add-on Payment (NTAP) designation. There are three (3) NTAPs that originated in FY18 that are proposed to be discontinued. There are nine (9) that are continued from FY19 including KYMRIAH/YESCARTA, VYXEOS, VABOMERE, Remede System, ZEMDRI, GIAPREZA, Cerebral Protection System, AQUABEAM, and AndexXa. There are 17 applications for NTAP for FY20.

Changes to Diagnosis and Procedure Codes
The number of proposed new diagnoses increases diagnosis codes by a net 252 while the proposed changes to procedure codes results in a decrease of 1,660. It was discovered that there are 128 transfusion codes that are clinically invalid, so these codes have been recommended for deletion.

Next steps
What should you do to prepare? I recommend the following action items after reviewing FY20 IPPS Proposed Rule:

1. Understand the financial impact to your facility
2. Educate coders, documentation professionals, physicians, and quality staff
3. Begin now to incorporate the changes affecting quality measures
4. Know which proposed NTAPs are utilized by your facility and ensure that they are in the chargemaster

A final thought
If your reading of the proposed changes identifies problems or concerns, send your comments to CMS regarding the proposed rule. Remember that the final rule will be posted in August 2019 and will be effective October 1, 2019. Your comments can make a difference!  


ICD-10-CM/PCS Guidelines Learn how to correctly apply ICD-10-CM and ICD-10-PCS guidelines to ensure accurate and complete coding:
ICD-10-CM: Selected Guidelines for Coding and Reporting ICD-10-PCS Guidelines: A Case Study Approach



Laurie M. Johnson, MS, RHIA, FAHIMA Laurie M. Johnson is a senior consultant at Revenue Cycle Solutions, LLC, a revenue cycle consulting firm specializing in revenue cycle assessments and work plan implementation; interim management with focus on process improvement; and revenue cycle education for hospitals and physician practices. Laurie is a past president of PHIMA and author of clinical coding articles for Journal of AHIMA and ICD-10 Monitor.

About the Author

Libman Education
Libman Education Inc. is a leading provider of training for the health care workforce offering self-paced and instructor-led online courses designed and developed by leading industry experts in Health Information Management (HIM) and Medical Record Coding. Our courses are specifically designed to improve individual skills and increase the efficiencies and competencies of health care providers and institutions. At Libman Education, we understand the needs and challenges of a well-trained workforce and offer the right-mix of online education to ensure that the health care professionals are prepared to meet the challenges of the changing workplace.

3 thoughts on “IPPS FY20: Follow the Numbers!

  1. Betty Bogda, RN - May 16, 2019 at 8:37 pm

    Thank you for posting this. I am wondering the rationale for the Severe malnutrition losing it’s mcc designation, but Moderate Protein-Calorie malnutrition is being elevated to mcc. ??

    “For example, end stage renal disease, severe malnutrition, and stage 3 and stage 4 pressure ulcers will no longer be MCCs. There are diagnoses that will be elevated to MCC such as moderate protein-calorie malnutrition, bacteremia, and candidal esophagitis.”
    Thank you.

    • Libman Education - May 27, 2019 at 8:01 pm

      Hi Betty,
      Thanks for your thoughtful question. This may be something that we post a blog about in the near future, so please stay tuned!