CMS Issues 2008 Final Inpatient Rule

Cardiac Rhythm Management Reimbursement Update

Last updated: August 2007

On August 1, 2007, the Centers for Medicare and Medicaid Services (CMS) released the final update to the fiscal year 2008 (FY08) Inpatient Prospective Payment System (IPPS).1 Changes affecting Cardiac Rhythm Management (CRM) therapies are detailed below. The changes go into effect October 1, 2007.

CMS has adopted a Medicare Severity Diagnosis-Related Group (MS-DRG) system to account for patient disease severity. By adopting the new MS-DRG structure, Cardiac Rhythm Management devices will now fall into 15 brand new MS-DRG categories. The weighted average financial impact on CRM device reimbursements resulting from the shift to MS-DRGs should be minimal.

Weighted Base Payment Rates for ICD System Implants and Pacemaker Implants Relatively Unchanged

The table below shows the FY08 Weighted Base Payment Rates for ICD System Implants and Pacemaker Implants.

MS-DRG	Procedure	Base MS-DRG Reimbursement*
226	Cardiac defibrillator implant w/o cardiac cath w MCC***	$31,849
227	Cardiac defibrillator implant w/o cardiac cath w/o MCC	$27,156
222	Cardiac defib implant w cardiac cath w AMI/HF/Shock w MCC	$43,222
223	Cardiac defib implant w cardiac cath w AMI/HF/Shock w/o MCC	$37,067
224	Cardiac defib implant w cardiac cath w/o AMI/HF/Shock w MCC	$39,421
225	Cardiac defib implant w cardiac cath w/o AMI/HF/Shock w/o MCC	$33,914

MS-DRG	Procedure	Base MS-DRG Reimbursement*
245	AICD lead & generator systems	$16,739

MS-DRG	Procedure	Base MS-DRG Reimbursement*
242	Permanent cardiac pacemaker implant w MCC	$17,554
243	Permanent cardiac pacemaker implant w CC	$13,728
244	Permanent cardiac pacemaker implant w/o CC/MCC	$11,510
260	Cardiac pacemaker revision except device replacement w MCC	$11,649
261	Cardiac pacemaker revision except device replacement w CC	$7,117
262	Cardiac pacemaker revision except device replacement w/o CC/MCC	$6,058
258	Cardiac pacemaker device replacement w MCC	$12,350
259	Cardiac pacemaker device replacement w/o MCC	$8,917

* Hospital specific final rates may vary due to geographic wage differences or be higher due to teaching institution status and disproportionate share of care status.

IPPS Highlights

Overall hospital reimbursement will increase 3.5% (an estimated $3.8B increase). However, because CMS believes implementing the MS-DRG system will increase payments due to improved coding practices, CMS will impose a 1.2% cut to the FY 2008 payments to protect the Medicare Trust Fund.

CMS will require hospitals to measure and submit 27 quality measures in 2008 to qualify for full payment in 2009.

CMS will reduce payments to hospitals when they receive replacement devices at no charge or with a partial credit from the manufacturer.

CMS will continue to study charge compression but will not enact a fix in 2008.

DRG to MS-DRG Structure for CRM Products

FY07 DRG	Procedure	FY08 MS-DRG	Procedure
515	Cardiac Defibrillator Implant w/o Card Cath	226	Cardiac defibrillator implant w/o cardiac cath w MCC***
		227	Cardiac defibrillator implant w/o cardiac cath w/o MCC

535	Permanent Pacemaker Implant with Major CV Diagnosis or AICD Lead or Generator	222	Cardiac defib implant w cardiac cath w AMI/HF/Shock w MCC
		223	Cardiac defib implant w cardiac cath w AMI/HF/Shock w/o MCC

536	Other Permanent Pacemaker Implant without Major CV Diagnosis	224	Cardiac defib implant w cardiac cath w/o AMI/HF/Shock w MCC
		225	Cardiac defib implant w cardiac cath w/o AMI/HF/Shock w/o MCC

FY07 DRG	Procedure	FY08 MS-DRG	Procedure
551	Permanent Cardiac Pacemaker w Major CV DX or AICD Replacement	245	AICD lead & generator systems

FY07 DRG	Procedure	FY08 MS-DRG	Procedure
551	Permanent Cardiac Pacemaker w/Major CV Diagnosis	242	Permanent cardiac pacemaker implant w MCC
551	Permanent Cardiac Pacemaker w/Major CV Diagnosis	243	Permanent cardiac pacemaker implant w CC

552	Other Permanent Pacemaker w/o Major CV Diagnosis	244	Permanent cardiac pacemaker implant w/o CC/MCC

FY07 DRG	Procedure	FY08 MS-DRG	Procedure
117	Cardiac Pacemaker Revision Except Device Replacement	260	Cardiac pacemaker revision except device replacement w MCC
		261	Cardiac pacemaker revision except device replacement w CC
		262	Cardiac pacemaker revision except device replacement w/o CC/MCC

118	Cardiac Pacemaker Device Replacement	258	Cardiac pacemaker device replacement w MCC
		259	Cardiac pacemaker device replacement w/o MCC

Additional Information

Read Medicare's press release.

Read the full 2008 IPPS Final Rule1

For questions related to the reimbursement of CRM products, call 1-800-CARDIAC (1-800-227-3422) and ask for the reimbursement call center.

Centers for Medicare and Medicaid Services. Medicare Program; Changes to the Hospital Inpatient Prospective Payment Systems and Fiscal Year 2008 Rates. August 1, 2007. Available at: http://www.cms.hhs.gov/AcuteInpatientPPS/downloads/CMS-1533-FC.pdf. Accessed August 2, 2007.

C5-377-0807

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