In recent newsletters, we’ve outlined some scenarios where drugs used on inpatients receive extra payment in addition to the MS-DRG reimbursement. Two examples are for hemophilia factors and drugs designated for 2-3 years of new technology add-on payments.
However, some drugs receive separate payment because the inpatient claim is coded differently and results in a higher-reimbursed MS-DRG. Let’s look at the scenario when tPA is administered to a stroke patient in the Emergency Department and then the patient is admitted.
Although the tPA may be administered in the ED when the patient still has a status of outpatient, when the patient is admitted, all the outpatient charges must be combined and reflected on a single, inpatient claim (Three Day Payment Window). However, when we look at the MS-DRG reimbursement structure, we see that the cost of TPA is accounted for through the inpatient payment system (IPPS).
The MS-DRG payment is calculated as the relative weight of the MS-DRG x hospital blended rate. Relative weights and hospital-specific rates are recalculated annually. The hospital blended rate is based upon many factors including urban vs. rural location, wage variations, teaching hospitals, and the disproportionate share of financially indigent patients. The actual payment for the same MS-DRG will vary between facilities based upon these and other variables (e.g. readmission rates).
Let’s look at our scenario of tPA administration in the ED with subsequent inpatient admission. The DRG listing for stroke for FY2021 is MS-DRGs 061-066.
Available in Table 5 of the FY2021 IPPS Rule are the relative weights for each MS-DRG:
A full list of DRGs is available at: https://www.cms.gov/icd10m/version39-fullcode-cms/fullcode_cms/P0002.html
In our example, let’s take a hospital whose blended base rate is $7,626.99 and compare the compensation for MS-DRG 63 vs. MS-DRG 66.
MS-DRG 63 (no complications; received tPA) = $7626.99 x 1.7099 = $13,041.39
MS-DRG 66 (no complications; no tPA) = $7626.99 x 0.7109 = $5,422.03
The payment difference is around $7600+
The revenue reflected in a higher payment due to a different MS-DRG may be difficult to correlate with the direct expense incurred by pharmacy for the tPA since the difference in reimbursement will not be itemized on the Remittance Advice (RA) returned from the payer.
Since these are inpatient claims, the individual HCPCS code for tPA will not be listed. Instead, HIM coders would put these ICD-10-PCS codes on the inpatient claim to identify those patients who received the thrombolytic so that a different MS-DRG will be reimbursed.
1. Pharmacy and Finance should determine which drugs may result in higher MS-DRG patients when administered to inpatients.
2. Education should be provided to HIM coders as to where documentation for these drugs may be located in the patient’s medical record (e.g. Emergency Department record, Radiology notes, Medication Administration Record).
3. When drugs result in additional inpatient reimbursement based upon a higher relative weight for the MS-DRG, Pharmacy and Finance should incorporate the additional revenue into financial calculations when evaluating drug costs. As the reimbursement for the tPA will not be itemized on the Remittance Advice (RA), a separate financial calculation should be developed correlating the drug cost for the tPA and the additional revenue received.