CMS, DRGs, and Hospital-acquired complications

The Federal Register (Vol. 72, No. 85) of Thursday, May 3, 2007 has a 457-page listing of proposed changes to the hospital inpatient prospective payment system for the 2008 fiscal yer. These proposals affect 42 CFR Parts 411, 412, 413, and 489.

This is essential reading. The posting of these proposed changes is a watershed event with implications that may extend far beyond the altruistic intentions of CMS.

• Follow this link for the Federal Register pages
• Follow this link for commentary sumitted to CMS
• Follow this link to the specific Federal Register pages (pdf)
• Follow this link to Mark's HTML summary pages
• Follow this link for a New York Times Opinion Piece (August 21, 2007)
  

Page 24716, Section F begins a lengthy discussion of how CMS proposes to reimburse hospital-acquired conditions, including infections. The changes are revolutionary and will have a tremendous impact on how hospitals - and other organizations - manage health information.

CMS has proposed some target conditions. At least to this writer's limited understanding, if one of these conditions is developed during a hospitalization, CMS would not reimburse for any higher DRG rates but instead would reimburse for the DRG that is not associated with the complication. Proposed conditions include:

• Catheter-associated urinary tract infections.
• Pressure ulcers
  
• Air emboli resulting from injection
• Stephylococcus septicemia
• Erroneous transfusion with the wrong blood type
  
• Ventilator-associated pneumonia.
• Infections relating from intra-vascular infection
  
• Clostridium difficile-associated gastrointestinal infections
  
• Drug-resistant staphyloccocus infection
  
• Surgical site infections.
• Wrong surgery.
• Falls

The legislative authority is clear. Quoting from the Federal Register:

Section 5001(c) of Pub. L. 109–171 requires the Secretary to select, by October 1, 2007, at least two conditions that are
(a) high cost or high volume or both,
(b) result in the assignment of a case to a DRG that has a higher payment when present as a secondary diagnosis, and
(c) could reasonably have been prevented through the application of evidence-based guidelines.
For discharges occurring on or after October 1, 2008, hospitals will not receive additional payment for cases in which one of the selected conditions was not present on admission. That is, the case will be paid as though the secondary diagnosis was not present. Section 5001(c) provides that we can revise the list of conditions from time to time, as long as the list contains at least two conditions. Section 5001(c) also requires hospitals to submit the secondary diagnoses that are present at admission when reporting payment information for discharges on or after October 1, 2007.

The mere targeting of this vital issue may transform both the means by which data are collected in the hospital and the means by which the status of a patient must be determined prior to hospitalization (the "present on admission"indicator becomes crucial). It will lead to better health care, greater systemic application of best practices, greater complexity, higher administrative costs, and perhaps add additional weight to the arguments made by proponents of global capitation or a single-payer health care system.

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Aside: What is the Present on Admision indicator? Maybe this quote from the Register can help - or at least demonstrate again how health care is mired in the complexity business.

The current electronic format used by hospitals to obtain this information (ASC X12N 837, Version 4010) does not provide a field to obtain the POA information. We are in the process of issuing instructions to require acute care IPPS hospitals to submit the POA indicator for all diagnosis codes effective October 1, 2007. The instructions will specify how hospitals under the IPPS will submit this information in segment K3 in the 2300 loop, data element K301 on the ASC X12N 837, Version 4010 claim.

Now, isn't that clear?

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The intent of these regulations is laudable. Who, after all, should be responsible for the costs incurred when the wrong limb is amputated, when a sponge is left in a body, when the wrong type of blood is transfured, or when a catheter is left too long unattended and leads to septicemia? That said, some of the areas are far more problematic. Complications - including septicemia, C. difficile happen under the best of practices. Where decubitus ulcers are concerned, determining the onset of these conditions is problematic - particularly in the case of patients who are bedridden or largely sedentary prior to admission.

In addition to the obvious coding and IT implications, these regulations may have other implications:

• A far more extensive investigation for pre-existing conditions at the time of admission - expect every patient to have a more extensive set of tests and perhaps photographic documentation of state of skin care. Expect a tension between those who "up code" at admissions and those who suspect fraudulent behavior.
• An escalation of the "blame game" between long-term care facilities and hospitals
• A significant financial impact on hospitals as the same regulations are adopted by commercial health plans
• A new basis for malpractice claims

There are other, perhaps unlikely long-term implications. As our system becomes more and more complex and as more and more dollars go towards coding and assigning blame rather than treating, at the same time providers will be adopting health care guidelines with greater enthusiasm, payers will be revolting over the escalation in costs associated with documentation rather than care. Proponents of single-payer systems - long arguing that the administrative costs of health care in America are prohibitive - will have a new and powerful arrow in their quiver.