MS-DRGs will remain relatively unchanged in ICD-10

By Lisa A. Eramo

Most providers are concerned about the financial impact of ICD-10-CM/PCS. The good news is that MS-DRGs won’t change much … at least not for a while.
“The goal of CMS in this first release for October 2014 is to produce a replication of its ICD-9 grouper,” says Janice Bonazelli, clinical analyst for 3M who oversaw the creation of the draft ICD-10 MS-DRG Definitions Manual per a contract with CMS.
Any potential enhancements or optimizations would occur only after CMS has collected and analyzed sufficient ICD-10 data on which to base those decisions, says Bonazelli. She says providers shouldn’t expect such changes for at least one year after implementation.
The draft definitions manual, which was updated this past fall, includes a table of contents listing each of the 25 Major Diagnostic Categories (MDC) as well as pre-MDCs, an index by MS-DRG, and several useful appendices.
When providers click on a particular MDC, they’ll see a list of MS-DRGs within that MDC. Each MS-DRG is also hyperlinked so providers can view the ICD-10-CM principal diagnosis code and any ICD-10-PCS operating room procedure(s) codes that drive the MS-DRG assignment.
“The MS-DRGs are relatively the same. The numbers and descriptions are the same,” says Dwan Thomas Flowers, MBA, RHIA, CCS, industry expert in Jacksonville, Fla. “However, the devil is in the details. There are some changes to the official coding guidelines that will cause a shift in the MS-DRGs.”
For example, ICD-9-CM guidelines require coders to code anemia followed by a malignancy when providers direct treatment at the anemia. More specifically, the ICD-9-CM guidelines state the following:
When admission/encounter is for management of an anemia associated with the malignancy, and the treatment is only for anemia, the appropriate anemia code (such as code 285.22, Anemia in neoplastic disease) is designated as the principal diagnosis and is followed by the appropriate code(s) for the malignancy. Code 285.22 may also be used as a secondary code if the patient suffers from anemia and is being treated for the malignancy.
In ICD-10-CM, coders must report the malignant neoplasm first. More specifically, the ICD-10-CM guidelines state the following:
When admission/encounter is for management of an anemia associated with the malignancy, and the treatment is only for anemia, the appropriate code for the malignancy is sequenced as the principal or first-listed diagnosis followed by the appropriate code for the anemia (such as code D63.0, Anemia in neoplastic disease).
The sequencing changes result in the assignment of different MS-DRGs, Flowers explains. When coders report anemia as the principal diagnosis, they’ll trigger DRG 812 (red blood cell disorders without MCC), which has a relative weight of .7872.
When they report certain malignancies as the principal diagnosis, they could trigger DRG 842 (lymphoma and non-acute leukemia without CC/MCC), which has a relative weight of 1.0450. This will clearly be a financial gain for providers, she adds.
CC and MCC changes may also affect MS-DRG assignment in ICD-10. For example, in ICD-9-CM, malignant hypertension (code 401.0) is a CC. In ICD-10-CM, only one code specifies malignant, benign, and unspecified hypertension (I10). Code I10 is not a CC or MCC.
“The higher-weighted DRG payments [for malignant hypertension] received under ICD-9 will be reimbursed at the lower-weighted DRG under ICD-10,” says Flowers. “There are many such examples, but this example serves to simplify the explanation of a very complex concern.”
Unlike most codes, I10 actually includes less specificity in ICD-10 because it denotes multiple conditions, says Bonazelli. Two of these conditions (i.e., benign and unspecified hypertension) weren’t CCs or MCCs in ICD-9-CM. “If a code represents multiple conditions … then CMS has to rely on clinical judgment and statistical data to determine the most appropriate classification,” she explains.
Despite these differences, providers shouldn’t notice an extreme shift in MS-DRGs. If a preliminary analysis reveals such changes, that shift is more likely due to poor documentation than a change in MS-DRG grouper logic, says Flowers.
Get to know the manual
Unlike 3M’s proprietary ICD-9 MS-DRG Definitions Manual, the draft ICD-10 definitions manual is free and available to the public on the CMS Web site.
“CMS wanted to be very transparent about what was happening and make people feel more comfortable with the changes so they could look at them and really see that it is a replication of ICD-9 MS-DRGs,” says Bonazelli.
One unique feature of the draft definitions manual is that MS-DRGs are listed in grouper logic order rather than numerical order.
“Grouper logic order means the MS-DRGs are presented based on the MS-DRG hierarchy in the MS-DRG software. This represents the order in which clinical conditions take priority in determining MS-DRG assignment,” says Bonazelli.
Medical MS-DRG assignment is based on the principal diagnosis, Bonazelli explains.
Surgical DRGs are a bit more complicated. For these DRGs, the principal diagnosis determines the MDC assignment. Within each MDC, CMS uses a surgical hierarchy to determine the assignment of a surgical MS-DRG. However, when a physician performs two or more operating room procedures, the surgical hierarchy within the MDC is used to select the most resource intensive procedure that then drives the MS-DRG assignment.
For example, a patient undergoes the two procedures:
  • A valve insertion, e.g., replacement of aortic valve with autologous tissue substitute, open approach (ICD-10-PCS code 02RF07Z)
  • Coronary bypass, e.g., bypass coronary artery, one site from coronary artery with autologous venous tissue, open approach (ICD-10-PCS code 0210093)
Based on grouper logic and the order in which these procedures are processed according to the surgical hierarchy specified in MDC 5 of the draft definitions manual, this case would group to a cardiac valve MS-DRG, Bonazelli explains.
Similarly, in the pre-MDC section, an autologous bone marrow transplant would be selected over a pancreas transplant.
Listing MS-DRGs in grouper logic order is beneficial for providers because it allows them to look at cases for which physicians perform multiple procedures and easily determine what procedure will be used to assign the MS-DRG, says Bonazelli.
Providers should also pay attention to the “principal diagnosis as its own CC” list and “principal diagnosis as its own MCC” list in the draft definitions manual. These lists of ICD-10 combination codes includes conditions that coders previously reported using two or more ICD-9 codes, one of which was a CC or MCC condition.
“Because these codes include multiple conditions, providers will actually get credit for the principal diagnosis as well as an additional CC [or MCC] level,” says Bonazelli. “The goal was to have the same MS-DRG assignment as ICD-9-CM even though ICD-10 represents two distinct clinical conditions with a single code.”
For example, in ICD-9-CM coders would have reported code 995.92 (severe sepsis) as the principal diagnosis with code 785.82 (septic shock) when a patient had severe sepsis with septic shock. Code 785.82 is an MCC.
In ICD-10-CM, however, coders report one code to denote severe sepsis with septic shock (R65.21). When coders report R65.21 as the principal diagnosis, the ICD-10 grouper logic will assign it to the appropriate “with MCC” MS-DRG.
Other examples of combination codes that can serve as the principal diagnosis as well as a CC include, but aren’t limited to:
  • Type 1 and Type 2 diabetes mellitus with diabetic peripheral angiopathy with gangrene
  • Atherosclerosis with unstable angina
Combination codes that can serve as the principal diagnosis as well as an MCC include, but aren’t limited to:
  • Stages III and IV pressure ulcers
  •  Traumatic cerebral edema with or without loss of consciousness
To view a list of principal diagnoses that also serve as CCs or MCCs, click on Appendix G or H of the draft definitions manual, respectively. The lists are hyperlinked as part two (in Appendix G) and part three (in Appendix H).  
Taking proactive steps
Although the draft ICD-10 MS-DRG Definitions Manual isn’t a reimbursement tool, providers can use it to better understand some of the details of the transition. Consider the following:
Monitor CCs, MCCs, and HACs. Appendices G, H, and I of the draft definitions manual describe ICD-10-CM CC, MCC, and hospital acquired conditions (HAC) respectively. Providers can monitor the frequency with which they report these conditions in ICD-9-CM to ensure that documentation is up to par and that coders understand and can identify relevant clinical indicators, says Flowers.
“Similarly, with the HACs, the HIM, quality, and clinical staff may want to review those conditions and confirm that there are programs and processes to prevent these conditions from occurring during the stay as well as educate on the consequences (decreased reimbursement) when these conditions are reported as occurring during the admission,” says Flowers.
Take advantage of historical claims data. Pair the draft definitions manual with Table 5 in the FY 2013 IPPS final rule. “Comparison of the relative weights based on the CC and MCC conditions and exclusions can give a glimpse of the financial impact,” says Flowers. “It would be best to use senior level coders who are used to auditing codes or those staff members who are very familiar with the ICD-9 coding guidelines and who have begun training in ICD-10.”
Predict facility-specific impact. As with any ICD-10 preparations, tailor information and analyses to your specific hospital, says Flowers. “There’s so much [information] out there about the risk and complexity of ICD-10. It is complex, but if you make your analysis very specific to your unique patient population, coding practices, and documentation practices, that will streamline it for you,” she says.
Compare and contrast the ICD-9-CM and ICD-10-CM coding guidelines to identify sequencing or other changes that might affect high-volume MS-DRGs at your facility. Then use the draft definitions manual to understand how these changes translate to MS-DRG assignment in ICD-10.
Editor’s note: For more information about how CMS converted MS-DRGs from ICD-9 to ICD-10, visit the CMS Web site to read about its MS-DRG Conversion Project.
Eramo is a freelance writer and editor in Cranston, RI who specializes in healthcare regulatory topics, health information management, and medical coding. You may reach her at
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