Rate Setting

Medicare reimbursement rates for HCT are set using provider claims and cost report data submitted by transplant centers. Therefore, the more complete and accurate the coding, billing, and charging processes of each transplant center, the more accurate and appropriate we can expect to see future HCT reimbursement rates.

Uses of Claims Data by CMS:

RBP Medicare Rate setting Uses of Claims Data

For inpatient transplants, Medicare uses the diagnosis and procedures codes submitted by your center to assign the MS-DRG. The assigned MS-DRG determines the amount your center will be reimbursed.


Fy19 Final Reimbursement MS-DRGs

How Medicare Determines the Reimbursement Amount for Inpatient MS-DRG

Medicare uses provider billed charges from the claim to estimate a ‘cost’ for each transplant case. Medicare takes the billed charge and reduces the charge to ‘cost’ by using a nationally defined “cost-to-charge” ratio. In other words, for every line item charge present on the claim, Medicare reduces the charge by a specific pre-determined cost-to-charge ratio which Medicare publishes. See the table below for FY 2019 ratios.

Cost to Charge Ratios

Your Charges Directly Impact Future Reimbursement Rate-Setting 

Case Study: 

RBP Medicare Rate Setting Case Study

Complete and Accurate Reporting Leads to Better Reimbursement

Accurately and completely reporting both primary and secondary diagnosis and procedure codes will ensure accurate Medicare MS-DRG assignment which provides a full picture of the different types of transplant patients you treat and their level of complexity.

Additionally, accurately and completely reporting your center’s total costs associated with treating transplant patients results in more accurate future reimbursement, as Medicare uses provider claims and cost data to create future reimbursement rates. 

Importance of Secondary Diagnosis Coding

A lot of time and effort is focused on getting the right principle diagnosis and principle procedure recorded on the claim so that the correct Medicare Severity–Diagnosis Related Groups (MS-DRG) can be assigned for inpatient encounters. But, secondary diagnoses are just as important and can have a significant impact on the MS-DRG assignment and reimbursement.

Secondary diagnoses are all of the conditions that co-exist at the time of the encounter, develop during the encounter, or affect the treatment received by the patient. Under the MS-DRG reimbursement system, secondary diagnoses are used to assess the severity of the patient’s condition; differentiating encounters in which the patient has additional conditions that may require additional resources from encounters in which the patient does not have such conditions. In addition, payers and health care quality evaluation organizations utilize secondary diagnoses to make assessments of hospital outcomes based on inferred patient acuity.

Severity Levels

Severity levels are determined based on conditions that, when reported as a secondary diagnosis code to the principle diagnosis, indicate the patient requires more resources and/or a longer length of stay. This is assessed using a list of conditions organized into two lists, the Major Complication or Comorbidity (MCC) list and the Complication or Comorbidity (CC) list.

There are exceptions, which are referred to as being on the “MCC/CC excludes list.” The items on the “excludes” list are associated with a principle diagnosis; when these secondary diagnoses are present, they do not increase the level of severity of the patient’s condition. When a MCC/CC diagnosis is reported in the secondary diagnosis position—and that specific diagnosis is not included on the MCC/CC excludes list for the principle diagnosis—the admission is eligible to be grouped to the higher-weighted MS-DRG (when one is available). Currently, higher-weighted DRG are not available for allogeneic transplants, only autologous.

It is vital that hospitals ensure proper documentation of secondary conditions so their coders can assign ICD-10-CM codes to these conditions and report them on the UB-04 claim form. This is critical to ensuring that the correct MS-DRG is assigned to the inpatient case, which, in turn, drives the hospital’s reimbursement for its inpatient cases. All secondary diagnoses should be reported within the Uniform Hospital Data Discharge Set (UHDDS) guidelines and ICD-10-CM coding guidelines. Hospitals should monitor their MCC and CC reporting levels on an on-going basis and provide continuous education related to coding and documentation for residents, physicians, and coding professionals. Monitoring reporting of secondary codes on an on-going basis will enable your management team to identify data deviations, investigate them in a timely manner, and provide any needed education to ensure the transplant MS-DRG mix is accurate.

Secondary Diagnosis Codes for Autologous HCT

Beginning in October 2011, CMS separated autologous transplants (formerly MS-DRG 015) based on severity levels and eliminated MS-DRG 015. The MS-DRG family for autologous transplant now consists of two MS-DRGs, each with its own relative weight that reflects differences in resource consumption:

  • MS-DRG 016: Autologous transplant with MCC/CC (FY 2019 relative weight = 6.5394)
  • MS-DRG 017: Autologous transplant without MCC/CC (FY 2019 relative weight= 4.3811)

The higher relative weight for MS-DRG 016 reflects the additional resources required to care for an autologous transplant patient who also has a MCC or CC secondary diagnosis.

Past Medicare claims data shows that numerous MCC and CC conditions were reported for autologous transplants. The top diagnoses reported have been converted to ICD-10-CM codes and are listed in the following tables.

TopComplication or Comorbidity RBP RateSetting

Major Complication or Comorbidity RBP Medicare Rate Setting