welcome to brighter

Afternoon Session:
Coding for APR DRGs
Puerto Rico Plan Vital

October 2024

A business of Marsh McLennan

1. Objectives of Today’s Training
2. Overview of DRGs
– MS-DRG vs APR DRGs
– Advantages of APR DRGs
3. Importance of DRGs
4. APR DRG Classification
5. Demonstration of APR DRG Assignment
6. What Goes into the Coding of DRGs?
7. Items for Hospital Consideration
8. Items for Physician Consideration
9. Hospital Processes — Best Practices
10. Next Steps and Questions

Agenda
Objectives
Today’s Training
Objectives

• To provide additional information on the APR DRG

system that ASES will implement on
October 1, 2025.
• To share the background on APR DRGs and how
the software processes the claims data to calculate
reimbursement.
• To support a smooth transition to the new
reimbursement methodology.
• To set aside time for hospitals to ask questions
specific to this transition.

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Key Points To Take From This Session

Build upon existing policies Without complete Accurate medical coding

for MS-DRG coding. documentation, accurate ensures that hospitals are
coding cannot be achieved. reimbursed correctly for the
services provided.

5
Overview of DRGs
Purpose of DRGs

• DRG systems are standardized methodologies used to:

– Evaluate patient conditions and group similar cases consistently across hospitals, within a state, and
across states.
– Allow communication, improvements, and efficiencies between hospitals and payers.

To determine the DRG assignment for an inpatient stay, two key items are evaluated:

Level of Illness Risk of

(Acuity) Mortality

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 Include conditions that affect patients outside of
DRGs Medicare
—
Classifies patients based on their reason for

APR DRG
admission, illness severity, and mortality risk
—
Used to integrate payment and quality through
tools that monitor complications and readmissions
• DRG stands for Diagnosis Related Group, which is a —
system that classifies patients to determine how Account for many pediatric illnesses, high risk
much a hospital will be reimbursed for their care. pregnancies, and HIV-related co-morbidities

DRGs are based on a patient’s

diagnosis, procedures, age, sex,
• The goal of DRGs is to pay hospitals fairly for similar discharge status, and other factors.
care, and to encourage access to care and
efficiency.
Developed for the Medicare Program
—

MS-DRG
Classifies patients based on diagnosis, severity,
and resource utilization
—
Used by Medicare for payment purposes
—
Not applicable to non-Medicare populations
8
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Examples That Can Cause Claim Denials
or Claims Paid at a Lesser Amount Under
APR DRGs
• Severity of Illness and/or Risk of Mortality are not included on
the claim.
• Missing or incorrect Present on Admission (POA) indicators
for each diagnosis on the claim.
• Incorrect Discharge Status identified on the claim.
• Medical necessity is not demonstrated by the documentation
accompanying the claim.
• Submitted documentation contains inconsistent information
compared to the claim.
• Inaccurate sequencing of diagnosis codes.
• Medical records not certified by the physician.
• Lack of itemized list of all charges.
• Lack of physician progress notes.
• Lack of plan of care.

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Limitations with Plan Vital Encounter Data

• Hospital claims submitted to MCOs include the necessary information

for payment under the current per diem methodology, however, for
purposes of APR DRGs:
– There are missing or incomplete values on the encounter claims,
such as discharge status code and present on admission indicators.
– Not all revenue codes and charges for an inpatient hospital stay are
included on the claims.
• Unknown age of newborn inpatient stays: Newborn stays are reported
with mother’s Medicaid ID.
• MCOs have sub-capitated arrangements for some inpatient hospital
services.

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Plan Vital APR DRG Simulation Versus National Standards
Severity of Illness

A comparison of the Severity of Illness level in Plan Vital encounter claims assigned using the APR DRG
methodology to those published nationally.

Plan Vital — Version 40 National Totals — Version 40

Total Count of
Severity of Total Count
Claims (CYs Percent to Total Percent to Total Difference
Illness of Claims
2021 and 2022)
1 109,569 56.4% 4,498,795 34.6% 63.1%

2 60,282 31.1% 4,836,294 37.2% (16.4%)

3 19,415 10.0% 2,640,152 20.3% (50.7%)

4 4,806 2.5% 1,032,039 7.9% (68.7%)

Total 194,200 100.0% 13,007,280 100.0%

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Importance of DRGs
Importance of DRGs
Assessing Patient Outcomes

• Care can be proactive with resources in place.

Streamlines
resource
allocation

• Complete and accurate documentation results in fewer Decrease in

oversights or misunderstandings of care. errors
• Billing is less subjective.

• Allows for analysis of comparable patient groups. Combines

• Supports quality and performance measures which diagnostic and treatment
can aid in improving patient care. information
• Supports quality and performance measures which
can aid in improving patient care.

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Importance of DRGs
Consistency in Billing

Comparable Patients Billed the

Better Data Analytics Insight into Trends
Same

Providers can better predict Ability to generate Improves ability to make

reimbursement: comprehensive reports and comparisons across providers:
✓ Improves fiscal planning explore trends in outcomes and ✓ Allows for better
care: benchmarking
✓ Simplifies the billing process
and increases transparency ✓ Advances the ability to detect
gaps in service or care
✓ Decreases the number of
denied or delayed payments ✓ Gain insight into trends

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Importance of DRGs
Better Benchmarking

Text
Identifying Areas for Improvement
• Providers can compare DRG mix
and/or costs with industry benchmarks

• Identify areas where you can increase

efficiencies, reduce costs, and Managing Resources
streamline internal operations
• Better prediction of future events
• Improved organizational decisions

Text
Improved Audit Outcomes
• Ability to compare hospital
departments or other regional
facilities

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Importance of DRGs
Performance Measure Tracking

• Standardizes the framework for performance measures:

– Streamlines the process
– Better categorization of patient conditions
– Less subjectivity concerning measure outcomes

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APR DRG Classification
APR DRG classification data elements

© Solventum 2024. All rights reserved. 18

What is Severity of Illness (SOI) and Risk of Mortality (ROM)

SOI ROM
Severity of Illness, a reflection of how Risk of Mortality, the likelihood a patient
severely ill or sick a patient is due to their will die due to their disease burden
disease burden, how difficult he/she is to
manage, the types of intervention
required, and the intensity of those
resources

© Solventum 2024. All rights reserved. 19

3M APR DRG assignment is
driven by:

• Principal diagnosis
• Procedures performed
• Most additional or secondary diagnoses
• Patient age
• Patient gender

© Solventum 2024. All rights reserved. 20 20

Underlying principle of 3M APR DRGs

Severity of Illness and Risk of Mortality High SOI and ROM are characterized
are dependent on patient’s underlying by multiple serious diseases and the
problems interaction among those diseases

© Solventum 2024. All rights reserved.

APR DRG methodology process

© Solventum 2024. All rights reserved. 22

SOI and ROM are independent
The severity of illness and risk of mortality subclass are calculated separately and may be different
from each other.
• Severity of Illness is weight based
• Risk of Mortality is based on many factors including age and gender

SOI = 3
Major Severity of Illness
Acute
cholecystitis
ROM = 1
Minor Risk of Mortality

© Solventum 2024. All rights reserved. 23

Impact of additional or secondary diagnoses on 3M APR DRGs

OPTION 1 OPTION 2 OPTION 3 OPTION 4

APR DRG 139
APR DRG 139 APR DRG 139 APR DRG 139
Weight 1.4375
Weight 0.4011 Weight 0.5261 Weight 0.7912
SOI Subclass 4
APR DRG SOI Subclass 1 SOI Subclass 2 SOI Subclass 3
ROM Subclass 4
ROM Subclass 1 ROM Subclass 2 ROM Subclass 2
Driver: Acute
Driver: CHF Driver: Malnutrition
respiratory failure

PDx Viral pneumonia Viral pneumonia Viral pneumonia Viral pneumonia

Acute on chronic Acute on chronic A/C diastolic CHF

SDx None diastolic congestive diastolic CHF Malnutrition
heart failure (CHF) Malnutrition Acute respiratory failure

© Solventum 2024. All rights reserved. 24

Demonstration of
APR DRG Assignment
What Goes Into Coding?
What Goes Into Accurate Coding?
Diagnosis Codes

Principal Secondary

The diagnosis is determined after reviewing all

Any condition that is clinically evaluated,
documentation from licensed physicians in
diagnostically tested, or treated, or that increases
the patient’s medical record.
the patient’s nursing care or length of stay.
Requires the most resources.
Can be co-existing conditions or complications
Carries significant weight in determining the DRG. arising during stay.

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What Goes Into Accurate Coding?
Procedure Codes

Significant Procedure Other Procedures Accurate Coding

✓ Carries an operative or ✓ Can range from surgeries to ✓ Ensures proper categorization

anesthetic risk diagnostic tests ✓ Justifies billing
✓ Requires highly trained
personnel or special
equipment

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What Goes Into Accurate Coding?
Discharge Status

Discharge Status determines whether

transfer policy applies or not.

DRG assignment can be affected by

discharge status if they are transferred to
a different institution, for example for
newborns/NICU cases.

Incorrect status can result in errors in

reimbursement and prolonged payment.

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What Goes Into Accurate Coding?
Patients Demographics

Age can affect assignment of DRGs

✓ Pediatric patients, ✓ If a patient’s age is ✓ Neonates defined ✓ Severity of illness

or those 17 years non-numeric or as newborns and designation can be
old and younger, coded greater than all other patients of affected by age
are often assigned 124, the patient will age less than 29
to separate DRGs be assigned to days at admission
DRG 470

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Items for Hospital
Consideration
Items for Hospital Consideration
Accurate Coding

No special resources beyond what you may Current Medicare FFS coding can be applied
already have (with enhanceme

• Billing staff that have specialized coding • Additional All-Patient groups such as newborns
• Certified coders or employees who specialize in and maternity
coding • Other types of care that are not specific to
• Clinical Documentation Improvement Medicare
Specialists (CDIs)

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Items for Hospital Consideration
Provider Education

https://www.cms.gov/Outreach-and-Education/MLN/WBT/MLN6447308-ICD-
10-CM/icd10cm/index.html

https://www.cms.gov/Outreach-and-Education/MLN/WBT/MLN4151758-ICD-
Studies show that 10-PCS/ICD10PCS/index.html
physicians educated on
documentation and
CDIs — Clinical Documentation Improvement specialists — if you
coding requirements have these, put them to work helping providers with coding
results in more accurate
DRG assignments
Feedback to your providers is important!
If data analysis points to providers or groups having issues with coding,
provide feedback and resources if available.

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Items for Hospital Consideration
Streamlined Billing

• Fixed payments from DRGs allow for improved cost

consciousness:
– Data analytics can show trends more easily
– Better matching of cost to payments

• Standardization improves time spent on individual claims or

batches:
– Fewer outliers mean less time spent in research
– Eases administrative tasks and decreases billing errors

• Payment accuracy levels increase

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Items for Hospital Consideration

Documentation Complexity of Coding Annual Updates Coding errors Upcoding

• Accurate DRGs are • Best to have certified • Important to keep up • Incorrect DRG • Need to audit for this
dependent on coders to manage the with updates due to assignment can lead as it can lead to fraud
complete and detailed complexity changes in technology to denial of claims.
documentation. and medical practices
• Consider regular
• Encourage providers audits and enhanced
to maintain coding reporting to make sure
education errors are corrected.

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Items for Physician
Consideration
Items for Physician Consideration
Accurate Documentation

Complete and Accurate Coding is the Key to APR DRG Assignment

• Make sure all procedures and services are included in the documentation
• ALL diagnoses must be recorded as well
• An incorrect DRG, whether due to a co-condition being omitted or a secondary diagnosis
not recorded, can result in thousands of dollars of unrealized revenue
Coding Education
• CMS has basic training for ICD-10 (diagnosis) and PCS (surgical procedure codes)
– https://www.cms.gov/Outreach-and-Education/MLN/WBT/MLN6447308-ICD-10-CM/icd10cm/index.html
• Subscribe to the updates that come out quarterly to keep up with the new codes
– https://www.ama-assn.org/practice-management/cpt/cpt-news-and-publications-cpt-code-set
– https://www.cms.gov/medicare/coding-billing/icd-10-codes/2024-icd-10-cm
Annual Updates
• Be sure to review the annual updates to learn of new technologies and procedures that have been added
– Codes ending in “T” are temporary codes which are used to determine how much a new
technology/procedure will be used. Typically, they remain valid for three years before being reviewed for
possible inclusion as a permanent code
– Codes ending in “F” are performance metric codes and are usually not billed

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Items for Physician Consideration
Insight into Patient Care

• DRGs allow for prediction of resource allocation

– Reduction in the overuse of certain resources
– All diagnoses should be recorded as well
• Ability to gain insight with comparisons of patient groups
– Can compare patient outcomes, resource utilization and cost
across hospitals or healthcare settings
– Better able to communicate with payers and hospitals concerning
comparable patients
• Quality Improvement
– By analyzing outcomes and resource utilization within specific DRG
categories, physicians can identify areas for improvement,
implement evidence-based practices, and enhance patient care
• Research and Analysis
– Physicians can use DRGs to study patient populations, evaluate
treatment outcomes, and compare the effectiveness of different
interventions

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Items for Physician Consideration
Improvement in Billing

• Reduction in administrative burden

– Patients that are similar in diagnosis, treatment, and
demographics are billed equally
– Better able to predict reimbursement and budgeting
• Reduction in denied claims
– Complete and accurate DRG assignment results in fewer
denied claims and requests for additional information.
– Reimbursement is more timely
• Reduction in “surprise” bills for patients
Hospital Processes —
Best Practices
Success with APR DRG methodology
1. Accurate APR DRG assignment
2. Accurate, thorough and complete coding
3. Accurate, thorough and complete physician documentation
4. Clinical Documentation Improvement (CDI) program

© Solventum 2024. All rights reserved. 42

Effective APR DRG assignment
It is imperative that all documented diagnoses that meet
the UHDDS (Uniform Hospital Discharge Data Set)
coding guidelines be reported for each patient
• Principal diagnosis: The condition established after careful
study to be chiefly responsible for occasioning the admission
to the hospital
• Additional or secondary diagnoses: additional clinically
significant conditions that affect patient care in terms of
requiring at least one of the following:
• Clinical evaluation
• Therapeutic treatment
• Diagnostic procedures
• Extended length of hospital stay
• Increased nursing care and/or monitoring
© Solventum 2024. All rights reserved.
Why is documentation important?

© Solventum 2024. All rights reserved. 44

Principal diagnosis impact

The principal diagnosis is defined as the condition established after careful study to be chiefly
responsible for occasioning the admission to the hospital

Selection of principal diagnosis will determine level of severity of illness and reimbursement

PDx: CHF PDx: Pseudomonas

pneumonia
SDx: Pseudomonas
pneumonia SDx: CHF

APR DRG: 291 APR DRG: 137

RW: 0.5937 RW: 0.6787

SOI: 2 ROM: 1 SOI: 2 ROM: 2

© Solventum 2024. All rights reserved. 45

Clinical Documentation Improvement program
A CDI program creates a bridge between the gap

Providers document in
clinical terms

Two separate languages

Documentation for coding,
profiling & compliance requires
specificity in diagnosis terms.

© Solventum 2024. All rights reserved. 46

Common documentation issues
CLINICAL TERMS DIAGNOSTIC STATEMENT
(Documentation needs clarification) (Accurate code may be assigned)
Continue home medications such as nitrates, beta-blockers, furosemide, Document specific diagnosis such as CAD, chronic atrial fibrillation, chronic systolic
phenytoin heart failure, unstable angina, HTN, grand mal seizure disorder
1. History of CHF, will continue furosemide, ACE inhibitors
2. CXR reveals cardiomegaly, patient treated with diuretics, progress notes Heart failure (specify type such as systolic, diastolic, combined systolic and
reveal no overt CHF diastolic; specify acuity such as acute, chronic, acute on chronic)
3. Ejection fraction 24%, JVD, lungs bibasilar rales
Cardiac enzymes elevated, elevated troponin, EKG positive Acute myocardial infarction (specify type such as STEMI or NSTEMI; specific artery
involved such as LAD, left circumflex; exact date of any recent AMI)

Pneumonia (specify type and organism (known or suspected), such as Klebsiella

1. LUL infiltrate
pneumonia – must link responsible pathogen to the pneumonia; document cause
2. + sputum culture, productive cough
such as aspiration pneumonia)

1. SOB, pO2 55, pCO2 64, pH 7.32, O2 sat 88%, Bi-PAP, O2 Respiratory failure (specify acuity (known or suspected): acute, chronic or acute on
2. Respiratory distress, cyanosis, ↑HR, labored respirations chronic; document if acute respiratory failure is hypoxemic, hypercapnic or both)

Emaciated, ↓ albumin, weight loss, BMI 16.5, non-healing wounds, nutritional Malnutrition (specify type such as protein calorie, protein energy; document severity
consult, ordered supplements, consider TPN such as mild, moderate or severe or 1st, 2nd or 3rd degree)

Dry mucus membranes, poor skin turgor, will rehydrate Dehydration

© Solventum 2024. All rights reserved.

Example of documentation improvement
BEFORE Patient presented to ED unresponsive to AFTER
tactile and verbal stimuli. Temp 102.9,
APR DRG: 139 APR DRG: 720
SOI 4 ROM 3 BP 97/57; O2 sat 84% on R/A. WBCs SOI 4 ROM 4
Relative weight 1.2765 20,000 with left shift. BUN/Creatinine = Relative weight 2.0434
49/2.6. ABGs: pH 7.28; pCO2 45; pO2 63.
PDx: PDx:
Pneumonia, Unspecified Placed on 100% NRB mask. BP started to
Sepsis
drop: 85/57, 90/60, 80/40. Placed on SDx:
SDx: Levophed infusion titrated. BP cont’d to Pneumonia
Atrial Fibrillation Atrial Fibrillation
Left Heart Failure drop. Dopamine infusion added; no
Left Heart Failure
Pulmonary Collapse change in BP. Received IV Rocephin and Pulmonary Collapse
Hypotension IV Flagyl. Patient’s condition continued to Hypotension
Cystic Kidney Disease Cystic Kidney Disease
Edema deteriorate; cardiac arrest occurred.
Edema
Renal Insufficiency Patient was subsequently intubated, placed Hx Colon CA
Hx Colon CA on mechanical ventilation for 48 hours, and Septic Shock
expired. Acute Respiratory Failure
Procedure: Acute Renal Failure
Endotracheal Intubation Cardiac Arrest
Mechanical Ventilation <96 hours An opportunity exists to concurrently query
Coma
physician for Sepsis as PDx and Septic Procedure:
Shock, Respiratory Failure, Renal Failure Endotracheal Intubation
and Coma as secondary diagnoses to Mechanical Ventilation <96 hours

impact SOI and ROM

© Solventum 2024. All rights reserved. 48
Next Steps
Moving Forward
Anticipated Next Steps

June 2024 Late Summer/Fall 2024 July 2025

• Meet with Plan Vital MCO entities to • Continued conversations with • Finalize Rates for Implementation
discuss the DRG methodology MCO entities and hospitals using updated data
system and operational changes
(system updates with Solventum) • Training sessions with • Medicaid Regulation Updates:
hospitals related to DRG State Plan Amendment
• Meet with hospitals to review DRG reimbursement and billing
methodology system practices

50
Moving Forward
Anticipated Next Steps

To finalize the APR-DRG Rates for Implementation:

Update Claims
Period:
Update the APR- Update the STAC
• From discharges DRG Grouper to Directed Payments
Occurring in Calendar recent version:
Year 2021 and 2022 Based on Most
encounter claims
Currently using V40 Recent Year
• To discharges Occurring
in Calendar Year 2022
and 2023 (paid through
December 2024)

51
Next Steps – APR-DRG Software Development

6/1/24 10/1/24 1/1/25 1/15/25 2/28/25 4/1/25 6/1/25 7/1/25 10/1/25

Identify and conduct Begin to identify Identify and produce APR-DRG

ongoing education software transition joint communication reimbursement
training sessions for issues with moving needs (FAQ, final software released
ASES, MCOs, and from old payment rule, educational
hospitals system to APRs webinars)

Requirements Cutoff for receipt of Review available Resolve transition APR-DRG

definition stage – final requirements, Solventum issues found during implementation
ongoing grouper data files, and documentation testing / Early go-live date
options settings and grouper options resources (product, adopter discount
payment decisions release notes, available
definition manuals)
with stakeholders

52
If you have questions regarding the DRG Implementation,
please submit by December 1, 2024 using the form located
at the link below:

Plan Vital APR DRG Implementation Questions

53
Notices
• Incorporating the International Statistical Classification of Diseases and Related Health Problems – Tenth Revision (ICD-10), Copyright World Health
Organization, Geneva, Switzerland. ICD-10-CM (Clinical Modification) is the United States’ clinical modification of the WHO ICD-10.
• The International Classification of Diseases, Tenth Revision, Procedure Coding System (ICD-10-PCS) was developed for the Centers for Medicare and
Medicaid Services (CMS). CMS is the US Governmental agency responsible for overseeing all changes and modifications to the ICD-10-PCS.
• If this presentation includes CPT® or CPT® Assistant:
– CPT ® copyright 2024 American Medical Association. CPT is a registered trademark of the American Medical Association. This product includes CPT
and/or CPT Assistant which is commercial technical data and/or computer databases and/or commercial computer software and/or commercial computer
software documentation, as applicable which were developed exclusively at private expense by the American Medical Association. The responsibility for
the content of any “National Correct Coding Policy” included in this product is with the Centers for Medicare and Medicaid Services and no endorsement
by the AMA is intended or should be implied. The AMA disclaims responsibility for any consequences or liability attributable to or related to any use,
nonuse or interpretation of information contained in this product.
• If this presentation includes Coding Clinic:
– Coding Clinic is the official publication for ICD-10-CM/PCS coding guidelines and advice as designated by the four cooperating parties. The cooperating
parties listed below have final approval of the coding advice provided in this publication: American Hospital Association, American Health Information
Management Association, Centers for Medicare & Medicaid Services (formerly HCFA), National Center for Health Statistics. © 2024 by the American
Hospital Association. All rights reserved.
• If this presentation includes UB-04 information:
– Copyright 2024, American Hospital Association (“AHA”), Chicago, Illinois. Reproduced with permission. No portion of this publication may be reproduced,
sorted in a retrieval system, or transmitted, in any form or by any means, electronic, mechanical, photocopying, recording or otherwise, without prior
express, written consent of AHA.

© Solventum 2024. All rights reserved. 54

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