As part of the federal fiscal year 2021 Inpatient Prospective Payment System rule change proposed by CMS, two new hip-related diagnostic groups may be added to the Comprehensive Care for Joint Replacement program. CMS has noted that clinically, effective treatment of patients undergoing hip replacement following hip fractures tends to require more resources than those without hip fracture.
Generally, patients with hip fractures are already more clinically complex due to other factors related to bone fracture, as well as being potentially frailer on average than those requiring hip replacement as a result of degenerative joint disease.
CMS is proposing to create two new Medicare Severity Diagnosis Related Groups for hip replacement with a principal diagnosis of hip fracture for FFY2021:
- MS-DRG 521: Hip Replacement with Principal Diagnosis of Hip Fracture with Major Complication or Comorbidity
- MS-DRG 522: Hip Replacement with Principal Diagnosis of Hip Fracture without Major Complication or Comorbidity
CMS notes that the CJR model includes episodes triggered by major knee and joint replacement MS-DRGs 469 and 470 with hip fracture. As a result, CMS is seeking comment on the effect that the proposal to create MS-DRGs 521 and 522 would have on the CJR model and whether to incorporate the proposed new MS-DRGs, if finalized, into the CJR model’s proposed three-year model extension.
Based on DataGen’s analysis, creating these separate groups for fractures is sensible. The new groups should not create any material impact on CJR, since CMS has been stratifying episodes and targets on fracture status since the program began. If anything, the change is likely to raise DRG payment for the index admission, which will need to be accounted for when targets for FFY 2021 episodes are created.
It’s worth noting that fracture status is also part of the risk adjustment method in the Bundled Payments for Care Improvement-Advanced program. While Major Joint Replacement of the Lower Extremity episodes make up the entirety of the CJR program, they are just one clinical episode in the BPCI-A program. In both programs, differences in expenditures in the 90-day post-discharge period are already accounted for, as follows:
- CJR accomplishes the adjustment by stratifying the target price by fracture status.
- BPCI-A accomplishes its adjustment through factors in the regression methodology.
If the proposal is finalized, there will now be a DRG payment difference in the index admission that triggers the MJRLE episode if a patient has a fracture. Presumably, this means hospitals will see a higher payment for discharges where a fracture was treated. CMS will need to account for that change in the anchor DRG payment to fairly calculate new target prices in both programs for FFY 2021.