Q&A: CMS evaluates MS-DRG reassignments under the 2027 IPPS proposed rule

Q: What proposed MS-DRG reassignments are included in the 2027 IPPS proposed rule?

A: Payment under the 2027 Hospital Inpatient Prospective Payment System (IPPS) proposed rule is based upon the MS-DRG to which a discharged case is assigned, as each MS-DRG has a relative weight reflecting the “estimated relative cost of hospital resources.” CMS annually updates the MS-DRGs to which cases will be assigned as well as their respective payment rates to account for changes in the prices of goods and services used by hospitals to treat Medicare patients.

MS-DRGs are grouped into one of 25 major diagnostic categories (MDC) based on organ/body system or nature of disease or injury. Certain MDCs saw proposed updates to reassign procedures to different MS-DRGs, but not all were approved. These included:

• MDC 04 (Respiratory)
  • Request to move procedures inserting the Impella® Ventricular Support System for patients with pulmonary embolism and undergoing thrombectomy from MDC 04 MS-DRGs 163–165 (major chest procedures) to MDC 05 MS-DRG 215 (other heart assist system implant) or create a new MS-DRG for the procedures. CMS declined this request because moving the pulmonary embolism codes to MDC 05 could create unintended assignments to unrelated operating room procedures.
  • Request to move cases using CYTALUX®, a fluorescent optical imaging agent used for identification of lung cancer during surgery, from MS-DRG 165 (major chest procedures without CC/MCC) to higher level MS-DRGs 163 (major chest procedures with MCC) and 164 (major chest procedures with CC). However, CMS proposed to make such changes to this assignment because data analysis indicated costs and length of stay for such cases remained most similar to MS-DRG 165.
•  MDC 05 (Circulatory)
  • Procedures using the WiSE® CRT System are reported with ICD-10-PCS codes X2HN37B (Insertion of endocardiac pacing electrode into left ventricle, percutaneous approach, new technology group 11) and XHH80HB (Insertion of ultrasound transmitter and battery for endocardiac pacing electrode into chest subcutaneous tissue and fascia, open approach, new technology group 11). CMS proposes to move cases inserting the electrode from MS-DRG 264 (other circulatory system operating room procedures) to MS-DRGs 228 (other cardiothoracic procedures with MCC) and 229 (other cardiothoracic procedures without MCC) to improve clinical coherence. Cases inserting the transmitter and battery may be moved from MS-DRGs 242 (permanent cardiac pacemaker implant with MCC) and 243 (permanent cardiac pacemaker implant with CC) to MS-DRGs 258 (cardiac pacemaker device replacement with MCC) and 259 (cardiac pacemaker device replacement without MCC).
• MDC 08 (Musculoskeletal)
  • Request to reassign cases using iFuse BedrockTM Granite Implant System from lower severity MS-DRGs to higher MS-DRGS 426–428 (multiple level combined anterior and posterior spinal fusion except cervical), 447–448 (multiple level spinal fusion except cervical), and 456–458 (spinal fusion except cervical with spinal curvature, malignancy, infection or extensive fusions). Also request to reassign cases using Aprevo® Intervertebral Body Fusion Device from MS-DRG 402 (single level combined anterior and posterior spinal fusion except cervical) to MS-DRG 428 (multiple level combined anterior and posterior spinal fusion except cervical without cc/mcc) or 450 (single level spinal fusion except cervical with MCC or custom-made anatomically designed interbody fusion device). However, CMS proposes to create new MS-DRGs 523–525 (extensive or complex spinal fusion procedures except cervical) that will include cases with extensive spinal fusion procedures with use of Aprevo®, iFuse BedrockTM Granite Implant System, or both.
• MDC 13 (Female Reproductive System): CYTALUX® is also used for identification of ovarian cancer during surgery. Request to move cases using the fluorescent optical imaging agent to higher severity MS-DRGs 736–738 (uterine and adnexa procedures for ovarian or adnexal malignancy), but CMS proposed to make no changes to the assignment.

To see more revisions including deletions and creations of MS-DRGs, review the draft version of the ICD-10 MS-DRG Definitions Manual, Version 44 available electronically on the CMS website.

Editor’s note: This question and answer were originally published by JustCoding, and was adapted from the HCPro webinar, “Unpacking the FY 2027 IPPS Proposed Rule,” presented by Kimberly A. Hoy, JD, CPC, a senior regulatory specialist for HCPRO, and Teri Rice, MSN, MHA, MBA, RN, CHC, the lead instructor for HCPro’s Medicare Boot Camp.