This post is the fourth installment in our “ICD-10 and Your Bottom Line” series.  

In most hospitals, the end point of the coding processes is the assignment of a DRG, which drives the payer’s reimbursement.  CMS has used the DRG system to drive reimbursement nationally since 1983, and its use in commercial health insurance contracting has expanded to the point that most inpatient hospital visits are reimbursed using some variant of the DRG system today.

ICD-10, by increasing the amount of detail available to assign DRGs, presents a great opportunity to further refine the system for more accurate reimbursement. Of particular concern to hospitals, however, is the risk that, under ICD-10, the same patient visits, will produce disease and procedure code combinations which map to different DRGs, and potentially reduce potential reimbursements.

DRGs at Risk

CMS has produced a detailed examination of the impact of ICD-10 implementation on MS-DRG groupings. That analysis identifies the ten DRGs most at risk for shifts in reimbursement under ICD-10:

Familiarize yourself and your staff with the DRGs above to mitigate the risks of lost reimbursement.

Complications from Comorbidities

Another risk hospitals face is that changes in ICD-10 coding will impact the DRG through the coding of complications and comorbidities (CCs). The most commonly cited example is ICD-10-CM code F32.9, major depressive disorder, single episode, unspecified.  This code encompasses the ICD-9 diagnoses 296.20, major depressive affective disorder, single episode, unspecified, and 311, depressive disorder, not elsewhere classified.

Because the 311 code occurs much more frequently in current claims,  CMS has decided to treat ICD-10 code F32.9 like the ICD-9 code 311.  This is of significance because under the current system, 296.20 is treated as a comorbidity, increasing severity of the DRG, while 311 is not.  Hospitals with a disproportionally high incidence of 296.20 in their current coding are at risk to lose income over the shift.

Analysis

To clearly understand the effect that ICD-10 will have on your DRG assignments requires an analysis based on your charts and mix of cases.

• Begin with the ICD-10 coded charts that were produced in previous steps of the analysis, map those charts to the associated DRGs, and analyze any areas of difference.
• Next, query your systems for cases where ICD-9 diagnoses 296.20 was the only CC present, as those DRGs will lose their CC under ICD-10.
• Expand your analysis to ensure that you have a clear picture of the impacts to each of your top 25 DRGs.  Although CMS anticipates only 1 percent of patients nationwide will have a DRG shift under ICD-10, your local case mix may vary significantly from this norm.
• Finally, conduct an in depth analysis of any charts that have been identified as causing a DRG shift, to identify underlying coding or documentation issues that may be the root-cause of the shift and that would be good targets for your ICD-10 training program.

By following these recommendations, you will work towards minimizing the impact of ICD-10 on your organization and protect against denied claims.

For more information on preparing for ICD-10, download our latest Guide to the Financial Impacts of ICD-10.