A Comprehensive Guide to DRG Updates for the FY 2023

Mar 23, 2023
8 min read
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DRGs (Diagnosis Related Group) are a system used by healthcare providers and payers to classify hospital cases into groups that are expected to have similar clinical characteristics and costs. These groups are used to determine the payment rate for hospital services. DRGs are updated annually to reflect changes in medical practice, technology, and healthcare costs. The updates can include changes to the grouping criteria, the addition or deletion of codes, and updates to payment rates. 

CMS released the final rule for the federal fiscal year 2023 inpatient prospective payment system (IPPS) and long-term care hospital (LTCH) payment system which is effective from October 1st, 2022

Medicare payments for hospital inpatient services will increase by 4.3 percent. CMS estimates that the aggregate LTCH PPS payments will increase by 2.4 percent, or $71 million, as compared to FY 2022.

CMS is projecting that with the 4.3% increase and other changes to IPPS policies, it will boost total IPPS payments in FY2023 by roughly $2.6 billion.

Changes Related to MS-DRGs

CMS did not propose any new MS-DRGs for FY 2023, which means the number of MS-DRGs is maintained at 767 for FY 2023.

MDC 01:  Nervous System

LITT (Laser Interstitial Thermal Therapy) codes were moved from radiation therapy section to Medical Surgical section with appropriate body systems with root operation Destruction. 

So, LITT of brain and brainstem are now grouped to MS-DRGs 025-027 (Craniotomy and endovascular intracranial procedures)

Other procedures related to insertion of the stimulator generator are grouped to MS-DRGs 252-254 (Other vascular procedures) in MDC 05 Diseases and disorders of the circulatory system.

MDC 04: Respiratory System:

CMS moved the diagnosis code J80 (Acute respiratory distress syndrome) from DRG 204 (Respiratory signs and symptoms) to DRG 189 (Pulmonary edema and respiratory failure) since per coding directions that acute respiratory failure progressing to ARDS (Acute respiratory distress syndrome) is only coded to J80.

MDC 05: Cardiovascular System:

CMS moved the procedure code 02UG3JE Supplement Mitral Valve created from Left Atrioventricular Valve with Synthetic Substitute, Percutaneous Approach from MS-DRG group 231-232 (Coronary Bypass with PTCA) to MS-DRGs 266-267 (Endovascular cardiac valve replacement and supplement procedures) for type 2 MI, if Type 2 MI (I21.A1) is coded as principal diagnosis and DRG 280-282 (Acute Myocardial Infarction, Discharged Alive) is assigned. However, type 2 myocardial infarction is not a true acute myocardial infarction.

CMS modified the MS-DRG grouper logic to allow the below procedures BAROSTIM NEO™ System (0JH60MZ with 03HK3MZ or 03HL3MZ) reporting diagnosis code I97.130 or I97.131 (Postprocedural heart failure following cardiac/other surgery) as a principal diagnosis which were grouped to MS-DRGs 222-223 (Cardiac Defibrillator Implant With Cardiac Catheterization With AMI, HF Or Shock) when reported with these qualifying procedures. 

CMS moved the procedure code 02K80ZZ Map conduction mechanism, open approach to DRGs 273-274 (Percutaneous and Other Intracardiac Procedures) from DRGs 246-251 (Percutaneous cardiovascular procedures wit stent/without stent).

MDC 7: Hepatobiliary system

CMS added the procedure code 0FC94ZZ (Extirpation of matter from common bile duct, percutaneous endoscopic approach) to an O.R. procedure for the MS-DRG 411, 412, 412 (Cholecystectomy with CDE). This code had not been OR procedure previously.

MDC 15: Newborns and Other Neonates

CMS added the below codes to MS-DRG 790 (Extreme immaturity or respiratory distress syndrome, neonate).

  • P07.00 Extremely low birth weight newborn, unspecified weight
  • P07.20 Extreme immaturity of newborn, unspecified weeks of gestation
  • P07.26 Extreme immaturity of newborn, gestational age 27 completed weeks
An OR procedures DRG Changes

CMS moved the below procedure codes for embolization of portal or hepatic veins moved from MS-DRGs 981-983 (Extensive O.R. procedures unrelated to principal diagnosis) to 423-425 (Other hepatobiliary or pancreas O.R. procedures)

  • 06L43DZ Occlusion of Hepatic Vein with Intraluminal Device, Percutaneous Approach
  • 06L83DZ Occlusion of Portal Vein with Intraluminal Device, Percutaneous Approach
  • 06V43DZ Restriction of Hepatic Vein with Intraluminal Device, Percutaneous Approach
  • 06V83DZ Restriction of Portal Vein with Intraluminal Device, Percutaneous Approach
An OR procedure to non-OR procedure

CMS moved the below procedure codes for excision of hip muscle percutaneous approach with principal diagnosis K68.12 psoas abscess from MS-DRGs 981-983 (Extensive O.R. procedures unrelated to principal diagnosis) to 371-373 (Major gastrointestinal disorders and peritoneal infections) and no longer work as OR procedures.

  • 0KBN3ZX Excision of Right Hip Muscle, Percutaneous Approach, Diagnostic
  • 0KBN3ZZ Excision of Right Hip Muscle, Percutaneous Approach
  • 0KBP3ZX Excision of Left Hip Muscle, Percutaneous Approach, Diagnostic
  • 0KBP3ZZ Excision of Left Hip Muscle, Percutaneous Approach
MCC and CC list

CMS decided NOT to change any diagnoses on the MCC list or CC list. 

CMS added 35 MCC conditions and 136 CC conditions to the MS-DRG grouper 2023 and these can be reviewed at tables 6I.1, 6I.2, 6J.1 and 6J.2 in FY 2023 Final Rule and Correcting Amendment Tables.

For example, M96.A4 Flail chest associated with chest compression and cardiopulmonary resuscitation was added as a new code and is an MCC. So were several trauma of the brain codes. New code J95.87 for transfusion-associated dyspnea is a CC.

New Technology Add-on Payment (NTAP)

The new technology drugs for FY2023 will have the qualifier/seventh character of “8” since this is the eighth year of ICD-10-PCS.

CMS added 60 new technology codes to the ICD-10-PCS 2023 version.

Few of them are applicable to the new technology add-on payment (NTAP) along with existing new technology codes like New COVID-19 Treatments Add-On Payment (NCTAP).

Newly Approved NTAPs:
1. Ciltacabtagene autoleucel (CARVYKTI™): 

For the treatment of multiple myeloma.

  • XW033A7 - Introduction of Ciltacabtagene autoleucel into peripheral vein, percutaneous, new technology group 7 
  • XW043A7 - Introduction of Ciltacabtagene autoleucel into central vein, percutaneous, new technology group 7
2. Daratumumab and hyaluronidase-fihj (DARZALEX FASPRO®): 

For the treatment of light chain (AL) amyloidosis (E85.81)

  • XW01318 (Introduction of daratumumab and hyaluronidase-fihj into subcutaneous tissue, percutaneous approach, new technology group 8).
3. Hemolung Respiratory Assist System (Hemolung RAS): 

For the treatment of acute, hypercapnic respiratory failure using an extracorporeal circuit to remove CO2 directly from the blood.

  • 5A0920Z (Assistance with respiratory filtration, continuous
4. Maribavir (LIVTENCITY™): 

For the treatment of adults and pediatrics (12 years of age and older and weighing at least 35 kg) with post-transplant CMV infection/disease that is refractory to treatment (with or without genotypic resistance) to ganciclovir, valganciclovir, cidofovir, or foscarnet. 

  • XW0DX38 (Introduction of maribavir anti-infective into mouth and pharynx, external approach, new technology group 8)
  • XW0G738 (Introduction of maribavir anti-infective into upper gi, via natural or artificial opening, new technology group 8)
  • XW0H738 (Introduction of maribavir anti-infective into lower gi, via natural or artificial opening, new technology group 8).

It is an injectable bone-void filler made of calcium sulfate, hydroxyapatite, and gentamicin sulfate indicated for the surgical treatment of osteomyelitis. 

  • XW0V0P7 (Introduction of antibiotic-eluting bone void filler into bones, open approach, new technology group 7).
6. GORE® TAG® Thoracic Branch Endoprosthesis (TBE device): 

It is a modular device consisting of three components, an Aortic Component, a Side Branch Component, and an optional Aortic Extender Component, each of which is pre-mounted on a catheter delivery system for treatment of thoracic aortic aneurysms, traumatic aortic transection, and aortic dissection.

  • 02VW3DZ (Restriction of thoracic aorta, descending with intraluminal device, percutaneous approach), in combination WITH
  • 02VX3EZ (Restriction of thoracic aorta, ascending/arch with branched or fenestrated intraluminal device, one or two arteries, percutaneous approach).

Both codes are needed as the device straddles the two areas.

7. ViviStim® Paired VNS System (Vagus Nerve Stimulator)

It is a paired vagus nerve stimulation therapy intended to stimulate the vagus nerve during rehabilitation therapy to reduce upper extremity motor deficits and improve motor function in chronic ischemic stroke patients with moderate to severe arm impairment. 

  • X0HQ3R8 (Insertion of neurostimulator lead with paired stimulation system into vagus nerve, percutaneous approach, new technology group 8).
8. DefenCath™ (solution of taurolidine (13.5 mg/mL) and heparin (1000 USP Units/mL)):

It is a proprietary formulation of taurolidine, a thiadiazinane antimicrobial, and heparin, an anticoagulant, which is under development for use as catheter lock solution, with the aim of reducing the risk of catheter-related bloodstream infections (CRBI) from in-dwelling catheters in patients undergoing hemodialysis (HD) through a central venous catheter (CVC). 

  • XY0YX28 (Extracorporeal introduction of taurolidine anti-infective and heparin anticoagulant, new technology group 8).

Stay tuned for more such updates and industry insights. Visit our website www.coverself.com and subscribe to our Education Center to stay ahead. 



Part 3: New ICD-10 Codes and IPPS Changes for 2023 (hiacode.com)

Part 4: New ICD-10 Codes and IPPS Changes for 2023 (hiacode.com)