Understanding MS-DRG Grouping under ICD-10

Rayellen Kishbach's picture

Now that ICD-10 is in full swing, we are seeing a lot of activity with providers, payers, consultants and regulators who need to understand how Acute Inpatient and Long Term Care Hospital claims "behave" when the claim is coded in ICD-10. This includes both prospective and retrospective review of claims scenarios to understand MS-DRG grouping. This article offers a basic primer on MS-DRG grouping logic, and research techniques for using related MediRegs Coding Suite tools. If you'd like a personalized training on these tools, or a demonstration of them in action to see if they are a good fit for your research scenarios, please let us know!

MediRegs Coding Suite tools

  • ICD Explorer (to quickly understand coding specificity, guidelines, coverage, and claims rules/edits)
  • MS-DRG ICD-10 Definitions Manual (for transparency into diagnosis and procedure coding, CC/MCC designation, crosswalking and more)
  • MS-DRG Grouper, Calculator & Analyzer (for grouping, provider-specific payment, outlier adjustments and more payment analysis)
  • The Definition of Medicare Code Edits (MCE) document published yearly in the Final Rule also contains code edit lists which can be helpful.

Inside the "black box" of the MS-DRG grouper

Sometimes, outside of a specific claim payment scenario, it is beneficial to predict and understand how the grouper is going to behave. The best tool for that is the MS-DRG Definitions Manual, which is now available in an enhanced electronic format in the Coding Suite. Understanding the manual is also a guide to understanding grouping logic.

Major Diagnostic Category (MDC) assignment of Primary Diagnosis Code

There are 25 Major Diagnostic Categories, each containing a set of Medicare Severity Diagnostic Related Groups (MS-DRGs). The first step the grouper performs on a claim is to look at the PRIMARY and ADMITTING Diagnoses, to choose an MDC. In most cases, all ICD-10-CM diagnosis codes in the same "family" (the codes that all start with the same three characters) group to the same MDC, but not always. Many valid but "unspecified" diagnosis codes are not valid for use as a primary diagnosis code.

  • In the MS-DRG Definitions Manual, we've provided 25 chapters by MDC; in each MDC Chapter, you will notice an overview page is the first document. At the top of that document will be one to many links to the list of all ICD-10-CM Diagnosis codes that are assigned to this MDC (the lists are so long, they had to be split over several pages). These pages each have a title such as MDC ## Assignment of Diagnosis Codes.
  • In the ICD-10-Explorer Tool, when you click on the MS-DRG Definitions link, you will automatically search the manual; you'll notice the "MDC ## Assignment of Diagnosis Codes" documents as a quick indicator of the applicable Major Diagnostic Category. Open to see which specific codes in the family you are focused on are included in the list.
  • In the MS-DRG Grouper, try entering ONLY the Admitting and Primary diagnosis codes to verify the grouper behaves as expected and think of this as your "base" or "working" MS-DRG. The MCE also contains lists of codes that cannot be used as a principal diagnosis, and if you enter one of those in the grouper, you will see a message to that effect.

Medical MS-DRG Assignment

​Once you've identified which Major Diagnostic Category your code is in, it is possible to identify a medical MS-DRG based on that diagnosis. Typically, medical MS-DRGs come in triplets - with complications, with major complications or without complications. You can think of the lowest weight of these as your "base" or "working" MS-DRG until you add more details to the scenario that may group into a higher weight DRG.

  • In the MS-DRG Definitions Manual, on each MDC overview page is a listing of Medical MS-DRGs into tables by title. Click on the title of any set to see a summary page that lists the DRGs in this section, and the entire set of principal diagnoses that group specifically to these MS-DRGs. 
  • In the ICD-10-Explorer Tool, when you click on the MS-DRG Definitions link, you will automatically search the manual; you'll notice these medical MS-DRG summary documents as a quick indicator of the base grouping logic. Open to see which specific codes in the family you are focused on are included in the list.
  • In the MS-DRG Grouper, try entering ONLY the Admitting and Primary diagnosis codes to verify the grouper behaves as expected and think of this as your "base" or "working" MS-DRG. The MCE also contains lists of codes that cannot be used as a principal diagnosis, and if you enter one of those in the grouper, you will see a message to that effect.

Surgical MS-DRG Assignment

Once you've identified which Major Diagnostic Category your code is in, and the base medical MS-DRG based on that diagnosis, the case may qualify for grouping into a surgical MS-DRG if operating room procedures were provided during the inpatient stay. Just like medical MS-DRGs, typically, surgical MS-DRGs come in triplets - with complications, with major complications or without complications. There are three useful appendices that offer some transparency into the surgical MS-DRG logic. Appendix E lists all procedures assigned to MS-DRGs. Appendix F contains a special listing of surgical procedures that are considered "Unrelated Operating Room Procedures" and will group into a special set of MS-DRGs unrelated to the MDC (981-989). And Appendix D contains a hierarchy: "Since patients can have multiple procedures related to their principal diagnosis during a particular hospital stay, and a patient can be assigned to only one surgical class, the surgical classes in each MDC are defined in a hierarchical order. Patients with multiple procedures are assigned to the highest surgical class in the hierarchy to which one of the procedures is assigned." 

  • In the MS-DRG Definitions Manual, on each MDC overview page is a listing of Surgical MS-DRGs into tables by title. Click on the title of any set to see a summary page that lists the MS-DRGs in this section, and the entire set of procedures that group specifically to these MS-DRGs. Note that it is assumed that the patient has a principal Dx from the MDC list in this chapter. 
  • In the ICD-10-Explorer Tool, when you click on the MS-DRG Definitions link, you will automatically search the manual; you'll notice these surgical MS-DRG summary documents as a quick indicator of the base grouping logic. You may also notice hits in a few of the appendices, including Open to see which specific codes in the family you are focused on are included in the list.
  • In the MS-DRG Grouper, in addition to the Admitting and Primary diagnosis codes, add ICD-10-PCS procedure codes to see what grouping changes occur. When you look at O.R. procedures and the grouping logic, three scenarios can manifest:
    • Minor procedure don't "count" as surgery so the base medical MS-DRG is still assigned.
    • Major procedure that relates to the primary diagnosis causes the grouper to assign a surgical MS-DRG within the same MDC as the base medical MS-DRG.
    • Procedure and primary diagnosis are unrelated, so the grouper assigns one of the Unrelated O.R. procedure MS-DRGs (981-989)

Complications & Comorbidities

Once the primary diagnosis is used to assign the base medical MS-DRG, and if applicable, the primary and secondary procedures are used to assign the surgical MS-DRG, any other diagnostic conditions associated with the patient are reviewed to see if this case counts as including Complications & Comorbidities (CCs) or Major Complications & Comorbidities (MCCs). Typically this doesn't shift out of the three related MS-DRGs indicated by the principal Dx, and principal procedures, but it may shift into the higher CC or MCC weighted version of the triplet. Appendix G and H provide the CC/MCC lists, and you might find it interesting to note that there are over 14,000 codes listed in Appendix G (the Diagnoses Defined as Complications or Comorbidities) and around 3,000 in Appendix H (Major Complications or Comorbidities). 

  • In the MS-DRG Definitions Manual, review Appendix G - Diagnoses Defined as Complications or Comorbidities and Appendix H - Diagnoses Defined as Major Complications or Comorbidities. Because these lists are very long, they are broken into multiple pages, with about 400 codes on each page. The pages and codes are sorted alphanumerically, so it is fairly easy to see which codes for each ICD-10-CM chapter are on each list.
  • In the ICD-10-Explorer Tool, when you click on the MS-DRG Definitions link, you will automatically search the manual; you'll notice these Appendix G & H hits. Open to see which specific codes in the family you are focused on are included in the list.
  • In the MS-DRG Grouper, try entering additional Diagnosis codes beyond the Admitting and Primary diagnosis codes to verify twhether the grouper bumps the case "up" to a higher weight "w/CC" or w/MCC" MS-DRG.

Deeper Analysis

As you can see above, the standard tools that come with the Coding Suite are powerful references to understand ICD-10 grouping into MS-DRG for Medicare payment to Acute Care Hospitals under the Inpatient Prospective Payment System. If this is work you do daily, an upgrade to our MS-DRG Analyzer may be of benefit to help you go beyond the basics with the following functionality:

  • Batch claims analysis: The MS-DRG Analyzer allows you to create a simple excel file with up to 200 claims scenarios to instantly group and price. If you are finding yourself doing a lot of MS-DRG validation studies, or trying to understand "what if" scenarios in surgery, this tool can be a huge time savings and allow you to do deep analysis very quickly.
  • "What if" payment analysis: Sometimes we have an anticipated payment change, and a need to predict the impact on reimbursement. Because the provider-specific MS-DRG payment logic is so complex, this is no longer a simple calculation. The MS-DRG Analyzer will allow you to enter whatever variables you'd like for a provider and run MS-DRG specific calculations of what the payment will be under those variables. It also let's you enter charges to see which claim scenarios will qualify for outlier adjustment.
  • State and regional payment analysis: The MS-DRG Analyzer allows you to compare the provider-specific payment to regional and state averages.

 

 

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