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FY 2011 Medicare Hospital Inpatient Prospective Payment System Final Rule

The Centers for Medicare & Medicaid Services (CMS) released on July 30, 2010, its Hospital Inpatient Prospective Payment System (IPPS) final rule for fiscal year (FY) 2011, which will apply to discharges occurring on or after October 1, 2010. The rule is available at

The final rule includes an initial market basket update of 2.35% for those hospitals that submit data on quality measures; hospitals not submitting data would receive a 0.35% update. However, according to the American Hospital Association, due to additional policy changes – including a 2.9% cut to eliminate the effect of coding or classification changes the agency says do not reflect real changes in case-mix – the rule would decrease average inpatient payments by 0.4%.

Key provisions of final rule affecting the transfusion medicine and cellular therapy communities are outlined below.

ABO Incompatibility

CMS is finalizing its proposal to replace ABO incompatibility reaction ICD-9-CM code 999.6 with a longer list of more detailed codes. There are certain conditions that a patient may acquire in a hospital which were not present on admission and for which Medicare does not pay the additional costs associated with the complication if they are considered preventable. These are classified as Hospital Acquired Conditions (HAC) and they include such events as injuries due to falls in the hospital, pressure ulcers, certain infections and ABO blood incompatibility reactions. The ICD-9-CM diagnosis code currently used to report ABO incompatibility is Code 999.6. In its proposed rule, CMS suggested classifying that code as obsolete beginning in FY 2011 and replacing it with five new ICD-9-CM codes – 999.60, 999.61, 999.62, 999.63, and 999.69.

In comments to the agency, AABB questioned the necessity of increasing the granularity of ICD-9-CM 999.6 by breaking it down into five component codes since there were such a small number of cases (23) reported for this code in the time period studied. AABB recognized the need to reduce the number of incompatible transfusions, but raised concerns that this change could lead to unnecessary confusion among coders. CMS did not agree with AABB’s comments.

New ABO Incompatibility Codes

ICD-9-CM Code

Code Descriptor Proposed

CC/MCC Designation

ABO incompatibility reaction, unspecified
ABO incompatibility with hemolytic transfusion reaction not specified as acute or delayed
ABO incompatibility with acute hemolytic transfusion reaction
ABO incompatibility with delayed hemolytic transfusion reaction
Other ABO incompatibility reaction

Bone Marrow Transplants

Responding to AABB, the National Marrow Donor Program, the American Society for Blood and Marrow Transplantation and others in the cellular therapy arena, for FY 2011 CMS is establishing separate DRGs for allogeneic and autologous bone marrow/stem cell transplants. Currently, there is a single DRG (MS-DRG 009) assigned to both allogeneic and autologous transplants. Since the costs of allogeneic transplants were believed to be substantially higher than those for autologous transplants, AABB and other organizations asked CMS to review this issue and establish separate MS-DRGs if justified by the cost differences.

CMS analyzed FY 2009 MedPAR data on DRG 009, and found that allogeneic bone marrow cases had higher costs and longer average lengths of stay than autologous cases. For the 1,664 total cases assigned to MS-DRG 009, the average cost was approximately $43,877 and the average length of stay was approximately 21 days. The 395 allogeneic cases had an average cost of $64,845 and average length of stay of approximately 28 days. The 1,269 autologous bone marrow transplant cases had an average cost of $37,350, with an average length of stay of 19 days.

CMS believes that the data support separating allogeneic and autologous bone marrow transplants in two DRGs. CMS proposes to delete DRG 009 and create two new DRGs: DRG 014 (Allogeneic Bone Marrow Transplant) and DRG 015 (Autologous Bone Marrow Transplant). DRG 014 would include cases with the following ICD-9-CM procedure codes: 41.02, 41.03, 41.05, 41.06 and 41.08. DRG 015 would include cases with ICD-9 codes 41.00, 41.04, 41.04, 41.07 and 41.09.