2021 IPPS Final Rule Released: MS-DRG for CAR T-Cell Therapy and New Technology Add-On Payments Headline the Changes

2021 IPPS Final Rule Released: MS-DRG for CAR T-Cell Therapy and New Technology Add-On Payments Headline the Changes


The impact of COVID-19 has been felt everywhere, including the release of the IPPS Final Rule. Generally released in late July or early August, the 2021 Final Rule was released on September 2 and published in the Federal Register on September 18, 2020 (CMS, 2020). The effective date, October 1, 2020, stays the same, offering an especially short turnaround time for analyzing and implementing the provisions of the rule. Updates for FY 2021 include changes to the grouping logic and codes in selected MS-DRGs, new MS-DRGs for CAR T-Cell therapy, shifts between O.R. and non-O.R. procedures, and movement of cases from the Extensive or Non-Extensive O.R. Procedures Unrelated to Principal Diagnosis. In addition, the rule discusses continuations, additions, and deletions to the New Technology add-on payments. Overall, there will be an 2.7% increase in Medicare payments to hospitals, representing approximately $3.5 billion in added payments.

IPPS final ruleThe 2021 IPPS & MS-DRG Updates Webinar from YES HIM Education is available now. The course dives into the overall changes to the IPPS, as well as the changes to MS-DRGs by MDC.

MS-DRG Classification Changes

The most striking MS-DRG news is the release of PRE-MDC 18 for Chimeric Antigen Receptor (CAR) T-Cell Therapy. New Technology add-on payments for YESCARTA and KYMRIAH are discontinued for 2021, and, instead, the New Technology PCS codes for these drugs are included in the new MS-DRG, which has a weight of 37.3290. Other changes include new MS-DRGs for Major Head and Neck and ENT O.R. procedures, Hip Replacement with Hip Fractures and Kidney Transplant with dialysis, with six deleted MS-DRGs. Click here for a complete description of these changes.

Shifts in MS-DRGs 981-983 and 987-989

There were six instances with shifts from MS-DRGs 981-983 for Extensive O.R. Unrelated to Principal Diagnosis to MDCs and MS-DRGs including hemoptysis and epistaxis with percutaneous artery embolization and revision of implantable vascular access devices. There are two cases that moved out of MS-DRGs 987-989 for Non-Extensive O.R. Procedure Unrelated to Principal Diagnosis to specific MDCs and MS-DRGs.

O.R. Versus Non-O.R. Procedures

Each year, CMS evaluates the designation of procedure codes as O.R. or Non-O.R. and makes changes as appropriate. This year, endoscopic revisions of feeding devices was switched to a Non-O.R. procedure, while six Non-O.R. procedures were re-classified as O.R. procedures (percutaneous/endoscopic biopsy of mediastinum; percutaneous endoscopic chemical pleurodesis; percutaneous endoscopic excision of stomach; percutaneous endoscopic drainage of the peritoneum and gallbladder; open control of bleeding in the peritoneal cavity; and open inspection of the penis).

New Technology Add-on Payments for 2021

Typically, to be considered for add-on payment, “new technologies” must meet these three criteria:

  1. Must be new
  2. Must be costly and the MS-DRG rate determined to be inadequate
  3. Must demonstrate substantial clinical improvement over existing services or technologies

Beginning with applications for New Technology add-on payments for FY 2021, certain transformative new devices and Qualified Infectious Disease Products (QIDPs) may qualify for the New Technology add-on payment under an alternative pathway. Under these new pathways, if a device or drug has received FDA marketing authorization, it will be considered new and will not need to meet requirements that it represents an advance that substantially improves the diagnosis or treatment of Medicare beneficiaries (Federal Register, 2020).

Discontinued Add-on Payments for 2021

Review the comprehensive table that lists the discontinued vs. continued add-on payments for 2021, which can also be found on page 507 of the CMS Final rule or page 58619 of the Federal Register (CMS, 2020).

new technology add-on payment

Retained Add-on Payments for 2021

Additional payment was retained for 10 devices or drugs for 2021. Click here for a complete description of these changes.

FY 2021 New Technology Add-On Payments (Traditional Pathway)

There were 17 applications received, two applicants withdrew, three did not meet guidelines (Accelerate PhenoTest™ BC kit, KTE-X19 Liso-cel), and three were not approved (BioFire® FilmArray ® Pneumonia Panel, Supersaturated Oxygen (SSO2) Therapy (DownStream ® System), and GammaTile™).

Click here for a complete description of these changes.

FY 2021 New Technology Add-On Payments (Alternative Pathways)

New Technology add-on payments for 2021 were made to both of the new pathways. Click here for a complete description of these changes.

This is a synopsis of changes resulting from the 2021 IPPS Final Rule (CMS, 2020). Refer to the full text and tables for additional information (CMS, 2020).

Teri Jorwic

Contract Educator, MPH, RHIA, CCS, CCS-P, FAHIMA
CAR T-Cell therapy

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