Updated on: March 14, 2016

Impact Ahead: Four Reasons for MS-DRG Shifts

Original story posted on: October 25, 2013

While ICD-10 has been touted as “revenue neutral” by CMS, HIM professionals at this week’s 85th annual convention of the American Health Information Management Association (AHIMA) know different.


ICD-10 will impact reimbursement. MS-DRGs will shift. Contractual changes and updates with payers are essential. There will be an immediate correlation between reimbursement, coding, and clinical documentation. HIM professionals must be prepared.

During one of my sessions this week at AHIMA, I shared four reasons for MS-DRG shifts in ICD-10 and explained how HIM professionals can help bolster revenue cycles for the year ahead. 

Altered Coding Guidelines

MS-DRGs will shift under ICD-10 for four key reasons. The first is a change in coding guidelines. A couple of guidelines are being modified. Selection of the principal diagnosis for rehabilitation admissions and encounters is just one example.

According to Section II of the ICD-10 coding guidelines, when the purpose for the admission or encounter is rehabilitation, the first code should be the condition for which the service is being performed versus the therapy itself (as is the case in ICD-9). Coding is different and reimbursement shifts. According to my calculations, the reimbursement loss could be as much as $1,805 per case.

The second reason for shift is a change in MCC/CC status.

Change in MCC/CC Status

Because of ICD-10’s granularity, there are ICD-9 diagnoses that will no longer be complications or comorbidities. One example is accelerated/malignant hypertension. All three ICD-9 hypertension codes listed below translate to one ICD-10 code (I10 – Essential (primary) hypertension). This results in the loss of a CC and will cause a shift to a lower-weighted MS-DRG.

401.0 – Malignant/Accelerated essential hypertension (CC)

401.1 – Benign essential hypertension (not CC or MCC)

401.9 – Unspecified essential hypertension (not CC or MCC)

For a patient with known history of hypertension admitted with a lacunar cerebral infarction due to accelerated hypertension, reimbursement is $1,463 less per case under ICD-10. Hypertension coding is a key area for HIM scrutiny in 2014. Clinical documentation is another.

Lack of Documentation to Support ICD-10 Code Specificity

This is one of the biggest reasons for MS-DRG shift and revenue loss under ICD-10. There are many published examples of reimbursement drops associated with poorly documented cases—leading most hospitals to ramp-up their CDI and physician education efforts.

Three steps for HIM professionals to take in 2014 include: CDI specialist assessment and education; inventory and update of all queries and templates; and the introduction of new documentation requirements to medical staff—one specialty at a time.

Multiple ICD-9 Translations

Finally, ICD-10’s specificity results in multiple translations for ICD-9 procedures. One example is excision and resection. In ICD-9, they both have the same definition. In ICD-10, they have different definitions. Excision is the root operation when a portion of a body part is cut out or off using a sharp instrument such as scalpel, wire, scissors, bone saw, or electrocautery tip. Resection is similar to excision, except that it includes ALL of a body part, or any subdivision of a body part that has its own body part value in ICD-10-PCS.

Finer nuances such as this one must be clearly documented and correctly coded for correct MS-DRG assignment. If they are not completely documented, dollar losses could be significant.

HIM professionals should work to understand potential MS-DRG shifts under ICD-10, and inform their revenue cycle leadership accordingly. Join webinars, attend conferences, and network with peers. Learn as much as you can. MS-DRGs shifts will impact all of us much sooner than we think.

Disclaimer: Every reasonable effort was made to ensure the accuracy of this information at the time it was published. However, due to the nature of industry changes over time we cannot guarantee its validity after the year it was published.
Kim Carr, RHIT, CCS, CDIP, CCDS, AHIMA-Approved ICD-10-CM/PCS Trainer

Kim Carr brings more than 30 years of health information and clinical documentation improvement management experience and expertise to her role as Director of Clinical Documentation, where she provides oversight for auditing and documentation improvement for HRS clients. Prior to joining HRS, Kim worked as a consultant implementing CDI programs in varied environments such as level-one trauma centers, small community hospitals and all levels in between.

Before joining the consultant arena, Kim served as Manager of CDI in an academic level-one trauma center. She was responsible for education and training for physicians and clinical documentation specialists. Over the past 30 years, Kim has held several HIM positions; including HIM Coding Educator, Quality Assurance/Utilization Management Coordinator, DRG Coding Coordinator and Coding Manager. Kim holds a degree in Health Information Management and is a member of AHIMA, THIMA, ACDIS and AAPC.