FY 2020 IPPS Proposed Rule: MSDRG Changes

Version 37 incorporates changes to our MSDRG list as well as associated relative weights.  From FY 2019 to FY 2020 two (2) MSDRGs are removed and two (2) MSDRGs have been created.

To what extent is Relative Weight changing from FY 2019 to FY 2020?

*Data Source: CMS, FY 2019 & 2020 Table 5
*Data Source: CMS, FY 2019 & 2020 Table 5

Based on the data presented, the clear majority of MSDRG relative weights are experiencing an increase or decrease less than 5% (56.1%.)  

What are the top 10 MSDRGs experiencing Relative Weight change?

 *Data Source: CMS, FY 2019 & 2020 Table 5

Why should hospitals be aware?

MSDRG relative weight (RW) is assigned to each MSDRG indicating a relative costliness or average resources required to care for cases assigned to that diagnosis related group compared to the average Medicare case costliness. MSDRG relative weights are recalibrated annually, intended to not affect overall payments.  However, MSDRG relative weight changes could mean significant payment differences based on a hospital’s unique mix of services and volumes.   

Case Hospital Example: Urban Ohio Hospital

In the case example below, we reviewed the top 5 MSDRGs for increase in payment and the top 5 MSDRGs for decreases in payment.  In this example, the volumes by MSDRG remain static, with the assumption volumes will remain the same or similar in subsequent years.  

OHIO Hospital: Top 5 MSDRG Increases in Payment FY 2019 to FY 20201

*Data Source: CMS, FY 2019 & 2020 Table 5, FY 2020 IPPS Proposed Rule, 2018 MedPAR
1Payment Differences due to RW Changes: FY 2020 Operating base rate and FY 2020 Wage Index to isolate Relative Weight impact with static volumes

OHIO Hospital: Top 5 MSDRG Decreases in Payment FY 2019 to FY 20201

*Data Source: CMS, FY 2019 & 2020 Table 5, FY 2020 IPPS Proposed Rule, 2018 MedPAR
1Payment Differences due to RW Changes: FY 2020 Operating base rate and FY 2020 Wage Index to isolate Relative Weight impact with static volumes
*Data Source: CMS, FY 2019 & 2020 Table 5, FY 2020 IPPS Proposed Rule, 2018 MedPAR
1Payment Differences due to RW Changes: FY 2020 Operating base rate and FY 2020 Wage Index to isolate Relative Weight impact with static volumes

What is the Impact to my Hospital?

Assessing the impact to Prospective Payment Rule polices is essential is understanding future Medicare payments.  Identifying driving factors could assist the hospital in offering feedback to CMS and/or budgetary purposes at the facility and departmental levels.

Interested to comment to CMS on the IPPS Proposed Rule?

Comments must be received no later than 5 p.m. EDT on June 24th, 2019.  CMS encourages electronic submission of comments to http://www.regulations.gov.  Follow the instructions under the “submit a comment” tab.

CMS’s Acute Care Hospital Inpatient Prospective Payment System FACT SHEET:  https://www.cms.gov/Outreach-and-Education/Medicare-Learning-Network-MLN/MLNProducts/Downloads/AcutePaymtSysfctsht.pdf

Comments (0)

Leave a Reply

XHTML: You can use these tags: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <s> <strike> <strong>

%d bloggers like this: