Medicare Program; Hospital Inpatient Prospective Payment Systems for Acute Care Hospitals (IPPS) and the Long-Term Care Hospital Prospective Payment System and Policy Changes and Fiscal Year (FY) 2026 Rates; Changes to the FY 2025 IPPS Rates Due to Court Decision; Requirements for Quality Programs; and Other Policy Changes; Health Data, Technology, and Interoperability: Electronic Prescribing, Real-Time Prescription Benefit and Electronic Prior Authorization ntracranial Vascular Procedures’’ logic list. During our review of this issue identified by the commenters, we further examined the GROUPER logic that would determine the assignment of a case to MS–DRGs 020, 021, and 022. Specifically, we reviewed the ICD–10– PCS classification to determine if there were other ICD–10–PCS codes describing dilation of an intracranial vein that were not listed in the logic for MS–DRGs 020, 021, and 022. We identified the following three procedure codes. ICD–10–PCS codes 057L0ZZ, 057L3ZZ, and 057L4ZZ are also currently assigned to MS–DRGs 252, 253 and 254 in the ICD–10 MS–DRGs Version 42.1. In response to the commenters that stated they were unclear on the rationale for not including ICD–10–PCS code 057L0DZ in the list of procedure codes proposed to be added to the ‘‘Intracranial Vascular Procedures’’ logic list of MS–DRGs 020, 021, and 022, we have identified that the disparate MS–DRG assignments of the six ICD–10–PCS procedure codes that describe the dilation of an intracranial vein are a result of a replication error in transitioning to ICD– 10. We determined it may be helpful to provide the comparable translations under ICD–9–CM for commenters to b ation of an intracranial vein are a result of a replication error in transitioning to ICD– 10. We determined it may be helpful to provide the comparable translations under ICD–9–CM for commenters to better understand how these six procedures were initially grouped to the ICD–10 MS–DRGs as a result of replication during the conversion from ICD–9 to ICD–10 based MS–DRGs. We refer the reader to Table 6P.2f associated with this FY 2026 IPPS/LTCH PPS final rule (which is available on the CMS website at: https://www.cms.gov/ Medicare/Medicare-Fee-for-Service- Payment/AcuteInpatientPPS/index) for the findings from our analysis of the six procedure codes, which indicates how these procedures were classified under ICD–10–PCS based on the comparable translations under ICD–9–CM resulting in the current MS–DRG assignments. We reviewed ICD–10–PCS codes 057L0DZ, 057L0ZZ, 057L3ZZ, and 057L4ZZ and note these codes describe intracranial vascular procedures that are consistent with the existing procedure codes included in the logic for case assignment to MS–DRGs 020, 021, 022, 023, 024, 025, 026, and 027. Accordingly, because procedure codes 057L0DZ, 057L0ZZ, 057L3ZZ, and 057L4ZZ that describe dilat e codes included in the logic for case assignment to MS–DRGs 020, 021, 022, 023, 024, 025, 026, and 027. Accordingly, because procedure codes 057L0DZ, 057L0ZZ, 057L3ZZ, and 057L4ZZ that describe dilation of an intracranial vein were not assigned to MS–DRGs 020, 021, 022, 023, 024, 025, 026, and 027 as a result of replication in the transition from ICD–9 to ICD–10 based MS–DRGs, and are consistent with the existing procedure codes that also describe dilation of an intracranial vein currently included in the logic for these MS–DRGs, we believe that consistent with our proposal to add the other ICD–10–PCS procedure codes describing intracranial vascular procedures that were inadvertently excluded from the ‘‘Intracranial Vascular Procedures’’ logic list, procedure codes 057L0DZ, 057L0ZZ, 057L3ZZ, and 057L4ZZ should be assigned to MS–DRGs 020, 021, 022, 023, 024, 025, 026, and 027 in MDC 01, effective FY 2026. Therefore, after consideration of the public comments we received, and for the reasons discussed, we are finalizing our proposal to add the 57 procedure codes to the ‘‘Intracranial Vascular Procedures’’ logic list, and the 66 diagnosis codes to the ‘‘Hemorrhage VerDate Sep 2014 00 asons discussed, we are finalizing our proposal to add the 57 procedure codes to the ‘‘Intracranial Vascular Procedures’’ logic list, and the 66 diagnosis codes to the ‘‘Hemorrhage VerDate Sep 2014 00:36 Aug 02, 2025 Jkt 265001 PO 00000 Frm 00040 Fmt 4701 Sfmt 4700 E:\FR\FM\04AUR2.SGM 04AUR2 2 S E L U R h t i w D O R P 4 4 1 S 7 W 9 K S D n o d n o m m a h k / > H P G 2014 00:36 Aug 02, 2025 Jkt 265001 PO 00000 Frm 00041 Fmt 4701 Sfmt 4725 E:\FR\FM\04AUR2.SGM 04AUR2 / > H P G 2014 00:36 Aug 02, 2025 Jkt 265001 PO 00000 Frm 00042 Fmt 4701 Sfmt 4700 E:\FR\FM\04AUR2.SGM 04AUR2 / > H P G 96 Hours or Principal Diagnosis Except Face, Mouth and Neck without Major O.R. Procedures). Additionally, there were 11 cases that grouped to MS–DRGs 981, and 982 (Extensive O.R. Procedure Unrelated to Principal Diagnosis with MCC, and with CC, respectively) and two cases that grouped to MS–DRG 987 (Non-Extensive O.R. Procedures Unrelated to Principal Diagnosis with MCC). After review of these data, we stated we believe it would not be appropriate to reassign diagnosis code I67.4 to another MDC because it could inadvertently cause cases reporting a principal diagnosis of hypertensive encephalopathy wit ted we believe it would not be appropriate to reassign diagnosis code I67.4 to another MDC because it could inadvertently cause cases reporting a principal diagnosis of hypertensive encephalopathy with a nervous system procedure to be assigned to an unrelated MS–DRG. Further, we stated we believe it is clinically appropriate to maintain the assignment of I67.4 in MDC 01 as the condition is consistent with other conditions reported by diagnosis codes assigned to MDC 01. We then examined the MS–DRGs within MDC 01 to consider the possibility of reassigning the cases with a principal diagnosis of hypertensive encephalopathy to other MS–DRGs within MDC 01. In reviewing the claims data from the September 2024 update of the FY 2024 MedPAR file, and examining the clinical considerations, we stated we believe that the cases reporting a principal diagnosis of hypertensive encephalopathy could suitably group to MS–DRGs 070, 071, and 072 (Nonspecific Cerebrovascular Disorders with MCC, with CC and, without CC/MCC, respectively), which contain other cerebrovascular diagnoses under the heading of ‘‘Principal Diagnosis’’ in the GROUPER logic list, noting in the proposed rule that hypertensive enc , without CC/MCC, respectively), which contain other cerebrovascular diagnoses under the heading of ‘‘Principal Diagnosis’’ in the GROUPER logic list, noting in the proposed rule that hypertensive encephalopathy is considered a cerebrovascular disorder, as it is a neurological condition directly caused by a sudden, severe elevation in blood pressure. We refer the reader to the ICD–10 MS–DRG Definitions Manual Version 42.1, which is available on the CMS website at: https:// www.cms.gov/medicare/payment/ prospective-payment-systems/acute- inpatient-pps/ms-drg-classifications- and-software, for complete documentation of the GROUPER logic for MS–DRGs 070, 071, and 072. To determine how the resources for the cases in MS–DRGs 077, 078, and 079 compared to cases in MS–DRGs 070, 071, and 072, we examined the average costs and length of stay for cases in MS– DRGs 070, 071, and 072. Our findings are shown in the following table. As reflected and discussed in the proposed rule, the average costs of the 1,488 cases reporting a principal diagnosis of I67.4 with a secondary diagnosis designated as a MCC in MS– DRG 077 are slightly lower ($13,176 compared to $14,771) and the average length of sta of the 1,488 cases reporting a principal diagnosis of I67.4 with a secondary diagnosis designated as a MCC in MS– DRG 077 are slightly lower ($13,176 compared to $14,771) and the average length of stay is shorter (5 days compared to 6.4 days) than for all cases in MS–DRGs 070. The average costs of the 1,846 cases reporting a principal diagnosis of I67.4 with a secondary diagnosis designated as a CC in MS– DRG 078 are slightly lower ($8,591 compared to $9,381) and the average length of stay is shorter (3.3 days compared to 4.5 days) than for all cases in MS–DRGs 071. The average costs of the 243 cases reporting a principal diagnosis of I67.4 without reporting a secondary diagnosis designated as a CC or a MCC in MS–DRG 079 are slightly lower ($6,729 compared to $7,047) and the average length of stay is shorter (2.4 VerDate Sep 2014 00:36 Aug 02, 2025 Jkt 265001 PO 00000 Frm 00043 Fmt 4701 Sfmt 4700 E:\FR\FM\04AUR2.SGM 04AUR2 2 S E L U R h t i w D O R P 4 4 1 S 7 W 9 K S D n o d n o m m a h k / > H P G H P G 2014 00:36 Aug 02, 2025 Jkt 265001 PO 00000 Frm 00044 Fmt 4701 Sfmt 4700 E:\FR\FM\04AUR2.SGM 04AUR2 2 S E L U R h t i w D O R P 4 4 1 S 7 W 9 K S D n o d n o m m a h k Federal Reg h k / > H P G H P G 2014 00:36 Aug 02, 2025 Jkt 265001 PO 00000 Frm 00044 Fmt 4701 Sfmt 4700 E:\FR\FM\04AUR2.SGM 04AUR2 2 S E L U R h t i w D O R P 4 4 1 S 7 W 9 K S D n o d n o m m a h k Federal Register / Vol. 90, No. 147 / Monday, August 4, 2025 / Rules and Regulations 36579 defined by only one diagnosis code, it is unclear how the interpretation of the ICD–10–CM Tabular List instructions would factor into our data analysis, as cases reporting a different principal diagnosis code would not be assigned to MS–DRGs 077, 078, and 079. We further note our proposal to delete MS–DRGs 077, 078, and 079 was based on our review of the findings indicating a general decline in the number of cases reporting hypertensive encephalopathy as a principal diagnosis in the inpatient setting over the past few years and in consideration of the intent of the MS– DRGs. Therefore, after consideration of the public comments we received, we are finalizing our proposal to delete MS– DRGs 077, 078, and 079. Additionally, we are finalizing our proposal to reassign ICD–10–CM diagnosis code I67.4 (Hypertensive encephalopathy) from MDC 01 MS–DRGs 077, 078, and 079 to MS–DRGs 070, 071, and 072. We are also fina ditionally, we are finalizing our proposal to reassign ICD–10–CM diagnosis code I67.4 (Hypertensive encephalopathy) from MDC 01 MS–DRGs 077, 078, and 079 to MS–DRGs 070, 071, and 072. We are also finalizing our proposal to change the titles of MS–DRGs 070, 071, and 072 from ‘‘Nonspecific Cerebrovascular Disorders, with MCC, with CC, and without CC/MCC, respectively’’ to ‘‘Other Cerebrovascular Disorders with MCC, with CC, and without CC/MCC, respectively’’, without modification, effective October 1, 2025, for FY 2026. Lastly, as discussed previously, in the ICD–10 MS–DRG Definitions Manual Version 42.1, the titles of MS–DRGs 067 and 068 are ‘‘Nonspecific CVA and Precerebral Occlusion without Infarction with MCC and without MCC’’, respectively, and MS–DRG 069 was inadvertently referenced in our discussion in the proposed rule. Therefore, after consideration of the public comments we received, for the reasons discussed, we are finalizing our proposal with modification. Specifically, we are finalizing our proposal to change the titles of MS– DRGs 067 and 068 from ‘‘Nonspecific CVA and Precerebral Occlusion without Infarction with MCC and without MCC’’, respectively, to ‘‘Precerebral O re finalizing our proposal to change the titles of MS– DRGs 067 and 068 from ‘‘Nonspecific CVA and Precerebral Occlusion without Infarction with MCC and without MCC’’, respectively, to ‘‘Precerebral Occlusion without Infarction with MCC and without MCC’’, respectively, effective October 1, 2025. Under this finalization, the title of MS–DRG 069 will be maintained as ‘‘Transient Ischemia without Thrombolytic’’ for FY 2026. c. Encounter for Adjustment and Management of Implanted Devices of the Special Senses As discussed in the FY 2026 IPPS/ LTCH PPS proposed rule (90 FR 18028 through 18029), we identified a replication issue from the ICD–9 based MS–DRGs to the ICD–10 based MS– DRGs regarding the assignment of four ICD–10–CM diagnosis codes that describe encounters for adjustment and management of implanted devices of the special senses. Under the Version 32 ICD–9–CM based MS–DRGs, ICD–9–CM diagnosis code V53.09 (Fitting and adjustment of other devices related to nervous system and special senses), as shown in the following table, was assigned medical MS–DRGs 091, 092, and 093 (Other Disorders of Nervous System with MCC, with CC, and without CC/MCC, respectively) in MDC 01 (Diseases a l senses), as shown in the following table, was assigned medical MS–DRGs 091, 092, and 093 (Other Disorders of Nervous System with MCC, with CC, and without CC/MCC, respectively) in MDC 01 (Diseases and Disorders of the Nervous System). The four ICD–10–CM code translations also shown in the following table, that provide more detailed and specific information, also currently group to MS–DRGs 091, 092, and 093 in the ICD–10 MS–DRGs Version 42.1. We refer the reader to the ICD–10 MS–DRG Definitions Manual Version 42.1 (available on the CMS website at: https://www.cms.gov/ medicare/payment/prospective- payment-systems/acute-inpatient-pps/ ms-drg-classifications-and-software) for complete documentation of the GROUPER logic for MS–DRGs 091, 092, and 093. As discussed in the proposed rule, during our review of this issue, we noted that under ICD–9–CM, diagnosis code V53.09 (Fitting and adjustment of other devices related to nervous system and special senses) did not further describe the type of device related to nervous system and special senses. This is in contrast to its four comparable ICD–10–CM code translations listed in the previous table that provide more detailed and specific info of device related to nervous system and special senses. This is in contrast to its four comparable ICD–10–CM code translations listed in the previous table that provide more detailed and specific information than the ICD–9–CM diagnosis code and do specify the type of device. In reviewing the four ICD–10–CM diagnosis codes listed in the previous table and the devices they describe, we stated we believe that code Z45.31 is more appropriately assigned to MDC 02 (Diseases and Disorders of the Eye) and codes Z45.320, Z45.321, and Z45.328 are more appropriately assigned to MDC 03 (Diseases and Disorders of the Ear, Nose, Mouth and Throat). We noted in the proposed rule that an ‘‘implanted visual substitution device,’’ also known as a ‘‘visual prosthesis,’’ is a medical implant designed to partially restore vision to a patient who is blind by directly stimulating the visual pathway in the retina or brain, essentially bypassing damaged photoreceptor cells in the eye and providing a basic visual perception through electrical stimulation. Bone conduction devices, also known as bone conduction hearing aids, amplify sound via bone conduction, or vibrations through the bones of the skull which l perception through electrical stimulation. Bone conduction devices, also known as bone conduction hearing aids, amplify sound via bone conduction, or vibrations through the bones of the skull which directly stimulate a functioning cochlea. Cochlear devices and other implanted hearing devices are small electronic devices designed for patients with moderate to severe hearing loss caused by damage to the inner ear to help perceive sounds. We analyzed claims data from the September 2024 update of the FY 2024 MedPAR file to determine if there were any cases reported with diagnosis codes Z45.31, Z45.320, Z45.321, or Z45.328. One case was found in MS–DRG 983 (Extensive O.R. Procedures Unrelated to Principal Diagnosis without CC/MCC) reporting principal diagnosis Z45.321 and procedure code 09PE0SZ (Removal of hearing device from left inner ear, open approach) with costs of $5,530 and a length of stay of one day. In the proposed rule we stated we recognize that the volume of inpatient cases for patients with a principal diagnosis of Z45.31, Z45.320, Z45.321, VerDate Sep 2014 00:36 Aug 02, 2025 Jkt 265001 PO 00000 Frm 00045 Fmt 4701 Sfmt 4700 E:\FR\FM\04AUR2.SGM 04AUR2 2 S E L U R h t i w or patients with a principal diagnosis of Z45.31, Z45.320, Z45.321, VerDate Sep 2014 00:36 Aug 02, 2025 Jkt 265001 PO 00000 Frm 00045 Fmt 4701 Sfmt 4700 E:\FR\FM\04AUR2.SGM 04AUR2 2 S E L U R h t i w D O R P 4 4 1 S 7 W 9 K S D n o d n o m m a h k / > H P G 2014 00:36 Aug 02, 2025 Jkt 265001 PO 00000 Frm 00046 Fmt 4701 Sfmt 4700 E:\FR\FM\04AUR2.SGM 04AUR2 2 S E L U R h t i w D O R P 4 4 1 S 7 W 9 K S D n o d n o m m a h k Federal Register / Vol. 90, No. 147 / Monday, August 4, 2025 / Rules and Regulations 36581 Cases reporting a combination of these procedure codes (that is, any one procedure code from each list) for the endovascular treatment of aortoiliac and iliac artery aneurysms are currently assigned to MS–DRGs 268 and 269 (Aortic and Heart Assist Procedures Except Pulsation Balloon with MCC and without MCC, respectively). Based on its analysis of Medicare claims data using the previously listed codes in MS–DRGs 268 and 269, and to facilitate more precise payments for these procedures, the requestor recommended that CMS assign cases reporting a procedure code describing EVAR using an AAA endoprosthesis with a procedure code describing EVAR using an IBE to a proposed new MS–DR dures, the requestor recommended that CMS assign cases reporting a procedure code describing EVAR using an AAA endoprosthesis with a procedure code describing EVAR using an IBE to a proposed new MS–DRG titled, ‘‘Concomitant Endovascular Abdominal Aorta and Iliac Branch Procedures’’. In review of this request, as discussed in the proposed rule, we analyzed claims data from the September 2024 update of the FY 2024 MedPAR file for MS–DRGs 268 and 269 and for cases reporting standard EVAR using an AAA endoprosthesis compared to cases reporting EVAR using an AAA endoprosthesis with an IBE that are used to treat aortoiliac and iliac artery aneurysms with the previously listed procedure codes. The findings from our analysis are shown in the following table. As shown in the table, we identified a total of 2,519 cases within MS–DRG 268 with an average length of stay of 9.1 days and average costs of $62,984. Of the 2,519 cases, we found 1,500 cases reporting standard EVAR using an AAA endoprosthesis with an average length of stay of 7.4 days and average costs of $63,877 and 193 cases reporting EVAR using an AAA endoprosthesis with an IBE with an average length of stay of 8.2 days and average esis with an average length of stay of 7.4 days and average costs of $63,877 and 193 cases reporting EVAR using an AAA endoprosthesis with an IBE with an average length of stay of 8.2 days and average costs of $68,145. The data show that the cases reporting standard EVAR using an AAA endoprosthesis have a shorter average length of stay (7.4 days versus 8.2 days) and lower average costs ($63,877 versus $68,145) compared to the average costs of the cases reporting EVAR using an AAA endoprosthesis with an IBE. The data further show that the 193 cases reporting EVAR using an AAA endoprosthesis with an IBE have a shorter average length of stay (8.2 days versus 9.1 days) and higher average costs ($68,145 versus $62,984) compared to the average length of stay and average costs of all the cases in MS– DRG 268. For MS–DRG 269, we identified a total of 10,108 cases with an average length of stay of 2.0 days and average costs of $39,165. Of the 10,108 cases, we found 8,655 cases reporting standard EVAR using an AAA endoprosthesis with an average length of stay of 1.8 days and average costs of $38,562 and 871 cases reporting EVAR using an AAA endoprosthesis with an IBE with an average length o d EVAR using an AAA endoprosthesis with an average length of stay of 1.8 days and average costs of $38,562 and 871 cases reporting EVAR using an AAA endoprosthesis with an IBE with an average length of stay of 1.8 days and average costs of $48,159. The data show that the cases reporting standard EVAR using an AAA endoprosthesis have a comparable average length of stay (1.8 days versus 1.8 days) and lower average costs ($38,562 versus $48,159) compared to the cases reporting EVAR using an AAA endoprosthesis with an IBE. The data further show that the 871 cases reporting EVAR using an AAA endoprosthesis with an IBE have a VerDate Sep 2014 00:36 Aug 02, 2025 Jkt 265001 PO 00000 Frm 00047 Fmt 4701 Sfmt 4700 E:\FR\FM\04AUR2.SGM 04AUR2 2 S E L U R h t i w D O R P 4 4 1 S 7 W 9 K S D n o d n o m m a h k / > H P G H P G H P G 2014 00:36 Aug 02, 2025 Jkt 265001 PO 00000 Frm 00048 Fmt 4701 Sfmt 4700 E:\FR\FM\04AUR2.SGM 04AUR2 2 S E L U R h t i w D O R P 4 4 1 S 7 W 9 K S D n o d n o m m a h k / > H P G H P G H P G H P G 2014 00:36 Aug 02, 2025 Jkt 265001 PO 00000 Frm 00049 Fmt 4701 Sfmt 4700 E:\FR\FM\04AUR2.SGM 04AUR2 2 S E L U R h t i w D O R P 4 4 1 S 7 W 9 K S D n o d n o m m a h k 36584 > H P G H P G H P G H P G 2014 00:36 Aug 02, 2025 Jkt 265001 PO 00000 Frm 00049 Fmt 4701 Sfmt 4700 E:\FR\FM\04AUR2.SGM 04AUR2 2 S E L U R h t i w D O R P 4 4 1 S 7 W 9 K S D n o d n o m m a h k 36584 Federal Register / Vol. 90, No. 147 / Monday, August 4, 2025 / Rules and Regulations ‘‘open concomitant surgical ablation’’ procedure, the increase in average costs appeared to directly correlate with the number of procedures performed. For example, cases that describe ‘‘Open MVR + Open surgical ablation’’ generally demonstrated costs that were lower than cases that describe ‘‘Open MVR + Open AVR + Open CABG + Open surgical ablation.’’ Therefore, we stated we believe that additional time was needed to allow for further analysis of the claims data to determine to what extent the patient’s co-morbid conditions are also contributing to higher costs and to identify other contributing factors that might exist with respect to the increased length of stay and costs of these cases in these MS–DRGs. For the reasons summarized, and after consideration of the public comments we received, we did not make any MS–DRG changes for cases involving the open concomitant surgical ablation procedures for F . For the reasons summarized, and after consideration of the public comments we received, we did not make any MS–DRG changes for cases involving the open concomitant surgical ablation procedures for FY 2023. As discussed in the FY 2024 IPPS/ LTCH PPS final rule (88 FR 58681 through 58690), we again received a request to review the MS–DRG assignment of cases involving open concomitant surgical ablation procedures. The requestor recommended that CMS reassign open concomitant surgical ablation procedures for atrial fibrillation (AF) from MS–DRGs 219, 220, and 221 (Cardiac Valve and Other Major Cardiothoracic Procedures without Cardiac Catheterization with MCC, with CC, and without CC/MCC, respectively) to MS–DRGs 216, 217, and 218. The requestor further recommended that if CMS does not reassign cases involving open concomitant surgical ablation procedures to MS–DRGs 216, 217, and 218, in the alternative, CMS should create new MS–DRGs for all open mitral or aortic valve repair or replacement procedures with concomitant surgical ablation for AF to improve clinical coherence when three to four open heart procedures are performed in one setting. The requestor stated that cases reporting o nt procedures with concomitant surgical ablation for AF to improve clinical coherence when three to four open heart procedures are performed in one setting. The requestor stated that cases reporting open surgical ablation procedures for AF performed during open valve repair/replacement procedures are typically assigned to MS–DRGs 216, 217, 218, 219, 220, and 221, with the majority of the cases being assigned to MS–DRGs 219, 220, and 221 because of the surgical hierarchy in MDC 05 and because there is less of a need for cardiac catheterization in these cases. We stated in the final rule that the requestor performed its own data analysis, and stated their analysis showed that the data continue to demonstrate that claims with open surgical ablation procedures for AF are not clinically similar to the remaining cases in MS–DRGs 219, 220, and 221, and there are significant differences in resource utilization that reflect those clinical differences. We noted in FY 2024 IPPS/LTCH PPS final rule that our analysis of the claims data suggested that it is the performance of an aortic valve repair or replacement procedure, a mitral valve repair or replacement procedure plus another concomitant e that our analysis of the claims data suggested that it is the performance of an aortic valve repair or replacement procedure, a mitral valve repair or replacement procedure plus another concomitant procedure that is associated with increased hospital resource utilization, not solely the performance of open surgical ablation as suggested by the requestor, when compared to other cases in their respective MS–DRGs. Therefore, for the reasons discussed, we finalized our proposal to create MS–DRG 212 (Concomitant Aortic and Mitral Valve Procedures) in MDC 05 for cases reporting an aortic valve repair or replacement procedure, a mitral valve repair or replacement procedure, and another concomitant procedure. As discussed in the FY 2026 IPPS/ LTCH PPS proposed rule (90 FR 18032 through 18035), we again received a request to review the MS–DRG assignment of cases involving a single open surgical valve procedure with an open surgical ablation. The requestor recommended that CMS reassign cases involving a single open surgical valve procedure with an open surgical ablation from MS–DRGs 219, 220, and 221 (Cardiac Valve and Other Major Cardiothoracic Procedures without Cardiac Catheterization w nvolving a single open surgical valve procedure with an open surgical ablation from MS–DRGs 219, 220, and 221 (Cardiac Valve and Other Major Cardiothoracic Procedures without Cardiac Catheterization with MCC, with CC, and without CC/MCC, respectively) to MS–DRGs 216, 217, and 218 (Cardiac Valve and Other Major Cardiothoracic Procedures with Cardiac Catheterization with MCC, with CC, and without CC/ MCC, respectively). The requestor also suggested that if finalized, the title for MS–DRGs 216, 217, and 218 should be revised to ‘‘Cardiac valve and Other Major Cardiothoracic Procedures with Cardiac Catheterization or Open Ablation, with MCC, with CC or without CC/MCC, respectively.’’ As discussed in the proposed rule, the requestor stated MS–DRGs primarily focus on the most resource intensive procedure, without fully accounting for the overall resource intensity and complexity of all procedures performed and stated treating AF as a secondary condition is one such example. The requestor stated that AF, if not treated early after diagnosis, continues to worsen and is associated with stroke and mortality risk, and significantly higher healthcare spending. According to the requestor, a maj ted that AF, if not treated early after diagnosis, continues to worsen and is associated with stroke and mortality risk, and significantly higher healthcare spending. According to the requestor, a majority of AF patients undergoing surgical ablation procedures are older and frailer than non-surgical ablation valvular patients, and these patients frequently require two or even three procedures during one hospital visit to treat multiple conditions (AF, valve disease, heart failure, blocked coronaries). The requestor further stated patients undergoing multiple cardiac procedures, including surgical ablation, typically require between two and four hours of additional time in the operating room, a longer length of stay, and are at an increased risk for adverse event in recovery and noted that much like cardiac catheterization procedures, in many instances adding surgical ablation to open valvular procedures also requires an atriotomy to better visualize the mitral valve and complete the surgical ablation, making these concomitant procedures significantly more complex than single valve procedures performed on their own. The requestor stated that the current MS– DRG assignments do not ad rgical ablation, making these concomitant procedures significantly more complex than single valve procedures performed on their own. The requestor stated that the current MS– DRG assignments do not adequately pay hospitals for the resources associated with furnishing surgical ablation procedures and that therefore, it is increasingly becoming financially unviable for hospitals to perform these procedures to Medicare beneficiaries in a single admission. The requestor asserted that reassigning cases involving a single open surgical valve procedure with an open surgical ablation, which are currently assigned in MS–DRGs 219, 220, and 221, to MS–DRGs 216, 217, and 218 would accommodate the clinical complexity of performing two or more open heart procedures, would enhance clinical coherence for patients undergoing multiple procedures within MDC 05, would more accurately reflect associated costs and resource utilization, and would help minimize the need for multiple patient admissions. The requestor performed its own data analysis of the Standard Analytical File (SAF) FY 2022 Q1–Q3 report and stated they identified 1,938 cases involving a single open surgical valve procedure with an open questor performed its own data analysis of the Standard Analytical File (SAF) FY 2022 Q1–Q3 report and stated they identified 1,938 cases involving a single open surgical valve procedure with an open surgical ablation that were assigned to MS–DRGs 219, 220, and 221. The requestor stated their analysis showed that the impact of reassigning the 1,938 cases would result in better resource alignment with minimal relative weight changes. Specifically, the requestor stated that their analysis showed that if the cases involving a single open surgical valve procedure with an open surgical ablation that are currently assigned to MS–DRGs 219, 220, and 221 were reassigned to MS–DRGs 216, 217, and 218, the relative weights of MS–DRGs VerDate Sep 2014 00:36 Aug 02, 2025 Jkt 265001 PO 00000 Frm 00050 Fmt 4701 Sfmt 4700 E:\FR\FM\04AUR2.SGM 04AUR2 2 S E L U R h t i w D O R P 4 4 1 S 7 W 9 K S D n o d n o m m a h k Federal Register / Vol. 90, No. 147 / Monday, August 4, 2025 / Rules and Regulations 36585 216, 217, 218, 219, 220, and 221 would change by ¥5.35%, ¥4.48%, ¥2.59%, +0.47%, ¥0.93% and ¥0.12% respectively. As previously noted, the requestor recommended that we consider cases involving a si 85 216, 217, 218, 219, 220, and 221 would change by ¥5.35%, ¥4.48%, ¥2.59%, +0.47%, ¥0.93% and ¥0.12% respectively. As previously noted, the requestor recommended that we consider cases involving a single open surgical valve procedure with an open surgical ablation; however, the requestor did not provide a specific list of procedure codes for our consideration. Therefore, as discussed in the proposed rule, we reviewed the ICD–10–PCS classification and identified 81 procedure codes describing open surgical valve procedures and eight procedure codes describing open surgical ablation procedures. We refer readers to Table 6P.3a associated with the FY 2026 IPPS/ LTCH PPS proposed rule (which is available on the CMS website at: https:// www.cms.gov/medicare/payment/ prospective-payment-systems/acute- inpatient-pps) which sets forth the list of ICD–10–PCS procedure codes describing open surgical valve procedures and open surgical ablation procedures that we examined. To address this request and to understand the resource use for the subset of cases reporting procedure codes describing a single open surgical valve procedure with an open surgical ablation, without reporting a procedure code nd to understand the resource use for the subset of cases reporting procedure codes describing a single open surgical valve procedure with an open surgical ablation, without reporting a procedure code describing the performance of a cardiac catheterization, that are currently grouping to MS–DRGs 219, 220, and 221, we examined claims data from the September 2024 update of the FY 2024 MedPAR file for the average length of stay and average costs for these cases. Our findings are shown in the following table: As shown in the table, the data analysis performed indicates that the 1,657 cases in MS–DRG 219 reporting an open valve procedure and an open surgical ablation procedure, without a procedure code describing the performance of a cardiac catheterization, and with a secondary diagnosis code designated as an MCC have an average length of stay that is longer than the average length of stay for all the cases in MS–DRG 219 (10.1 days versus 10 days) and lower average costs when compared to all the cases in MS– DRG 219 ($67,532 versus $69,728). The difference in average costs is $2,196 ($69,728¥$67,532 = $2,196) for the cases reporting an open valve procedure and an open surgical ablation ll the cases in MS– DRG 219 ($67,532 versus $69,728). The difference in average costs is $2,196 ($69,728¥$67,532 = $2,196) for the cases reporting an open valve procedure and an open surgical ablation procedure without a procedure code describing the performance of a cardiac catheterization, and with a secondary diagnosis code designated as a MCC in MS–DRG 219 when compared to all the cases in MS–DRG 219. In MS–DRG 220, the 999 cases reporting an open valve procedure and an open surgical ablation procedure without a procedure code describing the performance of a cardiac catheterization, and with a secondary diagnosis code designated as a CC have an average length of stay that is longer than the average length of stay for all the cases in MS–DRG 220 (6.9 days versus 6.2 days) and higher average costs when compared to all the cases in MS–DRG 220 ($53,603 versus $49,514). The difference in average costs is $4,089 ($53,603¥$49,514=$4,089) for the cases reporting an open valve procedure and an open surgical ablation procedure without a procedure code describing the performance of a cardiac catheterization, and with a secondary diagnosis code designated as a CC in MS–DRG 220 when compare an open surgical ablation procedure without a procedure code describing the performance of a cardiac catheterization, and with a secondary diagnosis code designated as a CC in MS–DRG 220 when compared to all the cases in MS–DRG 220. In MS–DRG 221, the 41 cases reporting an open valve procedure and an open surgical ablation procedure without a procedure code describing the performance of a cardiac catheterization, and without a secondary diagnosis code designated as a CC or MCC have an average length of stay that is longer than the average length of stay for all the cases in MS– DRG 221 (5.6 days versus 3.6 days) and higher average costs when compared to all the cases in MS–DRG 221 ($48,353 versus $46,900). The difference in average costs is $1,453 ($48,353¥$46,900=$1,453) for the cases reporting an open valve procedure and an open surgical ablation procedure without a procedure code describing the performance of a cardiac catheterization, and without a secondary diagnosis code designated as a CC or MCC in MS–DRG 221 when compared to all the cases in MS–DRG 221. As discussed in the proposed rule, we then examined the data for cases in MS– DRGs 216, 217, and 218, and our findings ar ted as a CC or MCC in MS–DRG 221 when compared to all the cases in MS–DRG 221. As discussed in the proposed rule, we then examined the data for cases in MS– DRGs 216, 217, and 218, and our findings are shown in the following table: 2 S E L U R h t i w D O R P 4 4 1 S 7 W 9 K S D n o d n o m m a h k VerDate Sep 2014 00:36 Aug 02, 2025 Jkt 265001 PO 00000 Frm 00051 Fmt 4701 Sfmt 4700 E:\FR\FM\04AUR2.SGM 04AUR2 / > H P G 2014 00:36 Aug 02, 2025 Jkt 265001 PO 00000 Frm 00052 Fmt 4701 Sfmt 4700 E:\FR\FM\04AUR2.SGM 04AUR2 2 S E L U R h t i w D O R P 4 4 1 S 7 W 9 K S D n o d n o m m a h k / > H P G 2014 00:36 Aug 02, 2025 Jkt 265001 PO 00000 Frm 00053 Fmt 4701 Sfmt 4700 E:\FR\FM\04AUR2.SGM 04AUR2 2 S E L U R h t i w D O R P 4 4 1 S 7 W 9 K S D n o d n o m m a h k 36588 Federal Register / Vol. 90, No. 147 / Monday, August 4, 2025 / Rules and Regulations procedure code 02RF38Z (Replacement of aortic valve with zooplastic tissue, percutaneous approach) and performed their own analysis of the FY 2023 Final MedPAR data. The requestor stated they found the cases reporting a diagnosis of aortic regurgitation in MS–DRG 266 and 267 have 20 percent higher average costs (AR = $54,425 versus AS = $4 2023 Final MedPAR data. The requestor stated they found the cases reporting a diagnosis of aortic regurgitation in MS–DRG 266 and 267 have 20 percent higher average costs (AR = $54,425 versus AS = $45,323), two times the length of stay (AR = 5 days versus AS = 2.5 days) and trigger outlier payments two times more often (AR = 11.43 percent versus AS = 5.82 percent) compared to the cases reporting a diagnosis of aortic stenosis in MS–DRGs 266 and 267. The requestor noted in order to perform their analysis, they excluded cases reporting procedure codes describing the insertion of a percutaneous short-term external heart assist device by removing cases that reported ICD–10–PCS procedure codes 02HA3RZ (Insertion of short-term external heart assist system into heart, percutaneous approach) and 5A0221D (Assistance with cardiac output using impeller pump, continuous) from their analyses, as the requestor asserted those procedure codes were reassigned to MS–DRGs 001 and 002 (Heart Transplant or Implant of Heart Assist System with MCC and without MCC, respectively) in FY 2024. As stated previously, the requestor identified TAVR procedures for AR with ICD–10–CM diagnosis code I35.1 (Nonrheum r Implant of Heart Assist System with MCC and without MCC, respectively) in FY 2024. As stated previously, the requestor identified TAVR procedures for AR with ICD–10–CM diagnosis code I35.1 (Nonrheumatic aortic (valve) insufficiency) and ICD–10–PCS procedure code 02RF38Z (Replacement of aortic valve with zooplastic tissue, percutaneous approach). As we discussed in the proposed rule, in reviewing this request, we identified five additional ICD–10–CM diagnosis codes that also describe aortic regurgitation and included these codes in our analysis. The five ICD–10–CM diagnosis codes we identified are listed in the following table. Also, we noted in the proposed rule we identified eight additional ICD–10– PCS procedure codes that describe TAVR procedures as well, and similarly included these codes in our analysis. The eight ICD–10–PCS procedure codes we identified are listed in the following table. To begin our analysis, we reviewed the GROUPER logic. We stated the requestor is correct that nine ICD–10– PCS codes that describe TAVR procedures mentioned previously are currently assigned to MS–DRGs 266 and 267. The requestor is also correct that in the FY 2024 IPPS/LTCH PPS final rule ( at nine ICD–10– PCS codes that describe TAVR procedures mentioned previously are currently assigned to MS–DRGs 266 and 267. The requestor is also correct that in the FY 2024 IPPS/LTCH PPS final rule (88 FR 58690 through 58696), we discussed a request we received to reassign certain cases reporting procedure codes describing the insertion of a short-term external heart assist device from MS–DRG 215 to MS– DRGs 001 and 002. We stated temporary heart assist devices are intended to support blood pressure and provide increased blood flow to critical organs in patients with cardiogenic shock, by drawing blood out of the heart and pumping it into the aorta, partially or fully bypassing the left ventricle to provide adequate circulation of blood (replace or supplement left ventricle pumping) while also allowing damaged heart muscle the opportunity to rest and recover in patients who need short-term support. In the FY 2024 IPPS/LTCH PPS final rule, we stated that we examined the claims data and the data suggested that overall, cases reporting a procedure code describing the open insertion of a short-term external heart assist device may be more appropriately aligned with the average costs o the data suggested that overall, cases reporting a procedure code describing the open insertion of a short-term external heart assist device may be more appropriately aligned with the average costs of the cases in MS– DRGs 001 and 002 in comparison to MS–DRG 215, even though the average length of stay is shorter. We also stated that we reviewed the clinical considerations along with this data analysis and agreed that cases reporting a procedure code that describes the open insertion of a short-term external heart assist device are generally more resource intensive and are clinically distinct from other cases reporting procedure codes describing the insertion of short-term external heart devices by other approaches currently assigned to MS–DRG 215. Therefore, for the reasons discussed and after consideration of the public comments we received, we finalized our proposal to reassign ICD–10–PCS code 02HA0RZ (Insertion of short-term external heart assist system into heart, open approach) from MS–DRG 215 in MDC 05 to Pre- MDC MS–DRGs 001 and 002 when reported as a standalone procedure for FY 2024. Under this finalization, procedure code 02HA0RZ no longer needs to be reported as part of rom MS–DRG 215 in MDC 05 to Pre- MDC MS–DRGs 001 and 002 when reported as a standalone procedure for FY 2024. Under this finalization, procedure code 02HA0RZ no longer needs to be reported as part of a procedure code combination or procedure code ‘‘cluster’’ to satisfy the logic for assignment to MS–DRGs 001 and 002. We refer the reader to the ICD– 10 MS–DRG Definitions Manual, Version 42.1 (available on the CMS website at: https://www.cms.gov/ medicare/payment/prospective- payment-systems/acute-inpatient-pps/ ms-drg-classifications-and-software) for complete documentation of the VerDate Sep 2014 00:36 Aug 02, 2025 Jkt 265001 PO 00000 Frm 00054 Fmt 4701 Sfmt 4700 E:\FR\FM\04AUR2.SGM 04AUR2 2 S E L U R h t i w D O R P 4 4 1 S 7 W 9 K S D n o d n o m m a h k / > H P G H P G 2014 00:36 Aug 02, 2025 Jkt 265001 PO 00000 Frm 00055 Fmt 4701 Sfmt 4700 E:\FR\FM\04AUR2.SGM 04AUR2 2 S E L U R h t i w D O R P 4 4 1 S 7 W 9 K S D n o d n o m m a h k / > H P G H P G 2014 00:36 Aug 02, 2025 Jkt 265001 PO 00000 Frm 00056 Fmt 4701 Sfmt 4700 E:\FR\FM\04AUR2.SGM 04AUR2 Federal Register / Vol. 90, No. 147 / Monday, August 4, 2025 / Rules and Regulations 36591 As shown in the table, in MS–DRG 266, we i 1 PO 00000 Frm 00056 Fmt 4701 Sfmt 4700 E:\FR\FM\04AUR2.SGM 04AUR2 Federal Register / Vol. 90, No. 147 / Monday, August 4, 2025 / Rules and Regulations 36591 As shown in the table, in MS–DRG 266, we identified a total of 22,083 cases with an average length of stay of 4.5 days and average costs of $55,402. Of those 22,083 cases, there were 2,019 cases reporting a procedure code describing TAVR with a principal or secondary diagnosis of aortic regurgitation, excluding cases reporting ICD–10–CM diagnosis code I35.2, with average costs higher than the average costs in the FY 2024 MedPAR file for MS–DRG 266 ($57,724 compared to $55,402) and a longer average length of stay (6.5 days compared to 4.5 days). Additionally, there were 264 cases reporting a procedure code describing TAVR with a principal or secondary diagnosis of aortic regurgitation by reporting ICD–10–CM diagnosis codes I06.1 or I31.1 only, with average costs higher than the average costs in the FY 2024 MedPAR file for MS–DRG 266 ($61,433 compared to $55,402) and a longer average length of stay (7.0 days compared to 4.5 days). In MS–DRG 267, we identified a total of 36,405 cases with an average length of stay of 1.5 days and 6 ($61,433 compared to $55,402) and a longer average length of stay (7.0 days compared to 4.5 days). In MS–DRG 267, we identified a total of 36,405 cases with an average length of stay of 1.5 days and average costs of $43,282. Of those 36,405 cases, there were 2,038 cases reporting a procedure code describing TAVR with a principal or secondary diagnosis of aortic regurgitation, excluding cases reporting ICD–10–CM diagnosis code I35.2, with average costs lower than the average costs in the FY 2024 MedPAR file for MS–DRG 267 ($40,153 compared to $43,282) and a longer average length of stay (1.7 days compared to 1.5 days). Additionally, there were 262 cases reporting a procedure code describing TAVR with a principal or secondary diagnosis of aortic regurgitation by reporting ICD–10–CM diagnosis codes I06.1 or I31.1 only, with average costs lower than the average costs in the FY 2024 MedPAR file for MS–DRG 267 ($40,937 compared to $43,282) and a longer average length of stay (1.6 days compared to 1.5 days). We reviewed these data and note that the original request was to reassign cases reporting TAVR procedures for aortic regurgitation from MS–DRGs 266 and 267 to what the requester des ared to 1.5 days). We reviewed these data and note that the original request was to reassign cases reporting TAVR procedures for aortic regurgitation from MS–DRGs 266 and 267 to what the requester described as a more clinically and cost cohesive MS–DRG such as MS–DRG 215 (Other Heart Assist System Implant). We continue to believe that patients with indications for heart assist devices tend to be more severely ill and these inpatient admissions are associated with greater resource utilization as evidenced by the higher average costs and longer lengths of stay compared to cases reporting codes describing TAVR for aortic regurgitation, even when excluding cases with a principal or secondary diagnosis of ICD–10–CM code I35.2 or when considering cases reporting a principal or secondary diagnosis of ICD–10–CM codes I06.1 or I35.1 only. We also note that the claims data reflect variance with regard to average length of stay and average costs for these cases when considering which principal or secondary ICD–10–CM diagnosis codes are reported to describe aortic regurgitation. The claims data also clearly show that the cases reporting secondary diagnoses designated as MCCs are more resource secondary ICD–10–CM diagnosis codes are reported to describe aortic regurgitation. The claims data also clearly show that the cases reporting secondary diagnoses designated as MCCs are more resource intensive compared to other cases reporting codes describing TAVR for aortic regurgitation. As such, we believe it is premature to propose changes to the MS–DRG assignment of cases reporting TAVR procedures for aortic regurgitation. Further analysis is needed, particularly focusing on the diagnosis codes reported, and also giving consideration as to whether other factors, such as the reporting of secondary MCC and CC diagnoses, may be contributing to the average costs prior to proposing any reassignment of these cases to ensure clinical coherence between these cases and the other cases with which they may potentially be grouped. Furthermore, it is also difficult to predict what the associated costs and resource utilization will be in the future for TAVR devices that remain under development or in clinical trials as research continues to refine TAVR techniques, evaluate long-term outcomes, develop new devices, and expand clinical indications. We expect in future years we will have addit t or in clinical trials as research continues to refine TAVR techniques, evaluate long-term outcomes, develop new devices, and expand clinical indications. We expect in future years we will have additional data that can be used to evaluate the potential reassignment of cases reporting TAVR procedures. We will continue to monitor the claims data in consideration of any future modifications to the MS–DRGs for which TAVR procedures may be reported. Therefore, after consideration of the public comments we received, we are finalizing our proposal to maintain the GROUPER logic for MS–DRGs 266 and 267 for FY 2026, without modification. We are also finalizing our proposal to maintain the title of MS–DRGs 215 as ‘‘Other Heart Assist System Implant’’ for FY 2026. d. Percutaneous Coronary Atherectomy In the FY 2024 IPPS/LTCH PPS final rule (88 FR 58704 through 58712), we discussed a request we received to VerDate Sep 2014 00:36 Aug 02, 2025 Jkt 265001 PO 00000 Frm 00057 Fmt 4701 Sfmt 4700 E:\FR\FM\04AUR2.SGM 04AUR2 2 S E L U R h t i w D O R P 4 4 1 S 7 W 9 K S D n o d n o m m a h k / > H P G 2014 00:36 Aug 02, 2025 Jkt 265001 PO 00000 Frm 00058 Fmt 4701 Sfmt 4700 E:\FR\FM\04AUR2.SGM 04AUR2 / M\04AUR2.SGM 04AUR2 2 S E L U R h t i w D O R P 4 4 1 S 7 W 9 K S D n o d n o m m a h k / > H P G 2014 00:36 Aug 02, 2025 Jkt 265001 PO 00000 Frm 00058 Fmt 4701 Sfmt 4700 E:\FR\FM\04AUR2.SGM 04AUR2 / > H P G 2014 00:36 Aug 02, 2025 Jkt 265001 PO 00000 Frm 00059 Fmt 4701 Sfmt 4700 E:\FR\FM\04AUR2.SGM 04AUR2 2 S E L U R h t i w D O R P 4 4 1 S 7 W 9 K S D n o d n o m m a h k / > H P G H P G H P G H P G 2014 00:36 Aug 02, 2025 Jkt 265001 PO 00000 Frm 00060 Fmt 4701 Sfmt 4725 E:\FR\FM\04AUR2.SGM 04AUR2 / > H P G 2014 00:36 Aug 02, 2025 Jkt 265001 PO 00000 Frm 00061 Fmt 4701 Sfmt 4700 E:\FR\FM\04AUR2.SGM 04AUR2 / > H P G H P G H P G H P G H P G 2014 00:36 Aug 02, 2025 Jkt 265001 PO 00000 Frm 00062 Fmt 4701 Sfmt 4700 E:\FR\FM\04AUR2.SGM 04AUR2 2 S E L U R h t i w D O R P 4 4 1 S 7 W 9 K S D n o d n o m m a h k Federal Register / Vol. 90, No. 147 / Monday, August 4, 2025 / Rules and Regulations 36597 these cases are 49% (+$32,326), 60% (+$27,727), and 38% (+$15,432) more costly compared to all cases in MS– DRGs 219, 220, and 221, respectively. While acknowledging that cases reporting endovascular restriction of the thoracic aorta with a branched or fenestrated intraluminal device typicall l cases in MS– DRGs 219, 220, and 221, respectively. While acknowledging that cases reporting endovascular restriction of the thoracic aorta with a branched or fenestrated intraluminal device typically do not require a cardiac catheterization procedure, the requestor asserted that this claims analysis demonstrates cases reporting endovascular restriction of the thoracic aorta with a branched or fenestrated intraluminal device require resources similar to cases in MS–DRG 216. As mentioned previously, the requestor stated we could also consider reassigning cases reporting procedure codes describing other complex aortic arch branch procedures to MS–DRG 216. The requestor stated to be considered a similar ‘‘complex aortic arch procedure’’ the case should report an ICD–10–PCS code describing the endovascular restriction of the thoracic aorta with a branched or fenestrated intraluminal device with an ICD–10– PCS code describing a Zone 0 or a Zone 1 Bypass procedure. Zone 0 is in the ascending aorta, proximal to the brachiocephalic artery and Zone 1 covers the portion of the aortic arch between the brachiocephalic artery and the left common carotid artery. The requestor identified cases r g aorta, proximal to the brachiocephalic artery and Zone 1 covers the portion of the aortic arch between the brachiocephalic artery and the left common carotid artery. The requestor identified cases reporting these ‘‘other complex aortic arch procedures’’ as cases reporting ICD–10– PCS codes as reflected in the following table. In analyzing this request, we noted in the proposed rule the requestor is correct that the following ICD–10–PCS codes specifically describe procedures involving the GORE® TAG® TBE: 02VX3EZ (Restriction of thoracic aorta, ascending/arch with branched or fenestrated intraluminal device, one or two arteries, percutaneous approach), in combination with 02VW3DZ (Restriction of thoracic aorta, descending with intraluminal device, percutaneous approach). The requestor is also correct that procedure codes 02VX3EZ and 02VW3DZ are assigned to MS–DRGs 216, 217, 218, 219, 220, and 221. Additionally, we stated we agree that the ICD–10–PCS codes as reflected in the previous table can describe other complex aortic arch procedures, and when reported, MS–DRGs 216, 217, 218, 219, 220, and 221 would be assigned. We refer the reader to the ICD–10 MS– DRG Definitions Manual Vers able can describe other complex aortic arch procedures, and when reported, MS–DRGs 216, 217, 218, 219, 220, and 221 would be assigned. We refer the reader to the ICD–10 MS– DRG Definitions Manual Version 42.1, which is available on the CMS website at: https://www.cms.gov/medicare/ payment/prospective-payment-systems/ acute-inpatient-pps/ms-drg- classifications-and-software, for complete documentation of the GROUPER logic for MS–DRGs 216, 217, 218, 219, 220, and 221. We noted in the proposed rule that the GORE® TAG® TBE was approved for new technology add-on payments for FY 2023 (87 FR 48966 through 48969), FY 2024 (88 FR 58800), and FY 2025 (89 FR 69124). We refer readers to section II.E.5 of the preamble of this FY 2026 IPPS/LTCH PPS final rule for a discussion regarding the FY 2026 status of technologies approved for FY 2025 new technology add-on payments, including the GORE® TAG® TBE. To explore mechanisms to address this request and to understand the resource use for the subset of cases reporting procedure codes 02VX3EZ and 02VW3DZ, and cases reporting ‘‘other complex aortic arch procedures’’, in the proposed rule we stated we began our analysis by examining claims data from th cases reporting procedure codes 02VX3EZ and 02VW3DZ, and cases reporting ‘‘other complex aortic arch procedures’’, in the proposed rule we stated we began our analysis by examining claims data from the September 2024 update of the FY 2024 MedPAR file for cases assigned to MS–DRGs 216, 217, 218, 219, 220, and 221. Our findings are shown in the following table: VerDate Sep 2014 00:36 Aug 02, 2025 Jkt 265001 PO 00000 Frm 00063 Fmt 4701 Sfmt 4700 E:\FR\FM\04AUR2.SGM 04AUR2 2 S E L U R h t i w D O R P 4 4 1 S 7 W 9 K S D n o d n o m m a h k / > H P G 2014 00:36 Aug 02, 2025 Jkt 265001 PO 00000 Frm 00064 Fmt 4701 Sfmt 4700 E:\FR\FM\04AUR2.SGM 04AUR2 2 S E L U R h t i w D O R P 4 4 1 S 7 W 9 K S D n o d n o m m a h k / > H P G 2014 00:36 Aug 02, 2025 Jkt 265001 PO 00000 Frm 00065 Fmt 4701 Sfmt 4700 E:\FR\FM\04AUR2.SGM 04AUR2 2 S E L U R h t i w D O R P 4 4 1 S 7 W 9 K S D n o d n o m m a h k 36600 Federal Register / Vol. 90, No. 147 / Monday, August 4, 2025 / Rules and Regulations As shown in the table, the data analysis performed indicates that the 20 cases in MS–DRG 216 reporting procedure codes X2RX0N7 and X2VW0N7 have an average length of stay that is longer than the average length of the table, the data analysis performed indicates that the 20 cases in MS–DRG 216 reporting procedure codes X2RX0N7 and X2VW0N7 have an average length of stay that is longer than the average length of stay for all the cases in MS– DRG 216 (23 days versus 13.6 days) and higher average costs when compared to all the cases in MS–DRG 216 ($158,920 versus $88,193). The difference in average costs is $70,727 ($158,920¥$88,193 = $70,727) for the cases reporting procedure codes X2RX0N7 and X2VW0N7 in MS–DRG 216 when compared to all the cases in MS–DRG 216. In MS–DRG 217, the 2 cases reporting procedure codes X2RX0N7 and X2VW0N7 have an average length of stay that is longer than the average length of stay for all the cases in MS–DRG 217 (21.5 days versus 6.8 days) and higher average costs when compared to all the cases in MS–DRG 217 ($160,014 versus $59,943). The difference in average costs is $100,071 ($160,014¥$59,943 = $100,071) for the cases reporting procedure codes X2RX0N7 and X2VW0N7 in MS–DRG 217 when compared to all the cases in MS–DRG 217. In MS–DRG 218, there were zero cases reporting procedure codes X2RX0N7 and X2VW0N7. The 61 cases in MS–DRG 219 reporting procedure codes X2RX0N MS–DRG 217 when compared to all the cases in MS–DRG 217. In MS–DRG 218, there were zero cases reporting procedure codes X2RX0N7 and X2VW0N7. The 61 cases in MS–DRG 219 reporting procedure codes X2RX0N7 and X2VW0N7 have an average length of stay that is longer than the average length of stay for all the cases in MS– DRG 219 (16.9 days versus 10 days) and higher average costs when compared to all the cases in MS–DRG 219 ($154,134 versus $69,728). The difference in average costs is $84,406 ($154,134¥$69,728 = $84,406) for the cases reporting procedure codes X2RX0N7 and X2VW0N7 in MS–DRG 219 when compared to all the cases in MS–DRG 219. In MS–DRG 220, the 14 cases reporting procedure codes X2RX0N7 and X2VW0N7 have an average length of stay that is longer than the average length of stay for all the cases in MS–DRG 220 (8.9 days versus 6.2 days) and higher average costs when compared to all the cases in MS–DRG 220 ($84,004 versus $49,514). The difference in average costs is $34,490 ($84,004¥$49,514 = $34,490) for the cases reporting procedure codes X2RX0N7 and X2VW0N7 in MS–DRG 220 when compared to all the cases in MS–DRG 220. In MS–DRG 221, the one case reporting procedure codes X2RX0N7 $49,514 = $34,490) for the cases reporting procedure codes X2RX0N7 and X2VW0N7 in MS–DRG 220 when compared to all the cases in MS–DRG 220. In MS–DRG 221, the one case reporting procedure codes X2RX0N7 and X2VW0N7 has a length of stay that is shorter than the average length of stay for all the cases in MS– DRG 221 (3 days versus 3.6 days) and higher average costs when compared to all the cases in MS–DRG 221 ($97,825 versus $46,900). The difference in average costs is $50,925 ($97,825¥$46,900 = $50,925) for the cases reporting procedure codes X2RX0N7 and X2VW0N7 in MS–DRG 221 when compared to all the cases in MS–DRG 221. In the proposed rule, we stated we reviewed these data and noted the average costs of the 98 cases reporting the procedure code combination describing thoracic aortic arch replacement combined with restriction of the descending thoracic aorta are higher when compared to the average costs of all cases in MS–DRGs 216, 217, 218, 219, 220, and 221. The difference in average costs of the 98 cases reporting the procedure code combination describing thoracic aortic arch replacement combined with restriction of the descending thoracic aorta is $56,445 ($144,638¥$88,193 = $56 costs of the 98 cases reporting the procedure code combination describing thoracic aortic arch replacement combined with restriction of the descending thoracic aorta is $56,445 ($144,638¥$88,193 = $56,445) for the cases reporting procedure codes X2RX0N7 and X2VW0N7 when compared to all the cases in MS–DRG 216, which is the highest severity level ‘‘with MCC’’ MS–DRG. We reviewed these data and stated we do not believe that proposing to reassign all cases reporting the procedure code combination describing thoracic aortic arch replacement combined with restriction of the descending thoracic aorta to MS–DRGs 216, 217, and 218, even if there is no cardiac catheterization procedure reported and no secondary diagnosis designated as an MCC reported, would fully address the difference in resource utilization in these cases as the average costs of the cases reporting procedure codes X2RX0N7 and X2VW0N7 are much higher when compared to all the cases in MS–DRG 216. Accordingly, we stated we do not believe the data adequately supports a potential reassignment of these cases to MS–DRGs 216, 217, and 218, respectively. We also stated we do not believe that the small subset cases that report the t believe the data adequately supports a potential reassignment of these cases to MS–DRGs 216, 217, and 218, respectively. We also stated we do not believe that the small subset cases that report the procedure code combination describing thoracic aortic arch replacement combined with restriction of the descending thoracic aorta warrants the creation of a new MS–DRG at this time. As stated in prior rulemaking, the MS– DRGs are a classification system intended to group together diagnoses and procedures with similar clinical characteristics and utilization of resources. We generally seek to identify sufficiently large sets of claims data with a resource/cost similarity and clinical similarity in developing diagnosis related groups rather than smaller subsets. Moreover, as stated in prior rulemaking (85 FR 58472), we have concerns regarding making proposed MS–DRG changes based on a specific, single technology (the ThoraflexTM Hybrid device) identified by only one unique procedure code combination versus considering proposed changes based on a group of related procedure codes that can be reported to describe the same type or class of technology, which is more consistent with the intent ination versus considering proposed changes based on a group of related procedure codes that can be reported to describe the same type or class of technology, which is more consistent with the intent of the MS– DRGs. VerDate Sep 2014 00:36 Aug 02, 2025 Jkt 265001 PO 00000 Frm 00066 Fmt 4701 Sfmt 4700 E:\FR\FM\04AUR2.SGM 04AUR2 2 S E L U R h t i w D O R P 4 4 1 S 7 W 9 K S D n o d n o m m a h k / > H P G 2014 00:36 Aug 02, 2025 Jkt 265001 PO 00000 Frm 00067 Fmt 4701 Sfmt 4700 E:\FR\FM\04AUR2.SGM 04AUR2 2 S E L U R h t i w D O R P 4 4 1 S 7 W 9 K S D n o d n o m m a h k / > H P G 2014 00:36 Aug 02, 2025 Jkt 265001 PO 00000 Frm 00068 Fmt 4701 Sfmt 4700 E:\FR\FM\04AUR2.SGM 04AUR2 / > H P G 2014 00:36 Aug 02, 2025 Jkt 265001 PO 00000 Frm 00069 Fmt 4701 Sfmt 4700 E:\FR\FM\04AUR2.SGM 04AUR2 2 S E L U R h t i w D O R P 4 4 1 S 7 W 9 K S D n o d n o m m a h k / > H P G H P G 2014 00:36 Aug 02, 2025 Jkt 265001 PO 00000 Frm 00070 Fmt 4701 Sfmt 4700 E:\FR\FM\04AUR2.SGM 04AUR2 / > H P G 2014 00:36 Aug 02, 2025 Jkt 265001 PO 00000 Frm 00071 Fmt 4701 Sfmt 4700 E:\FR\FM\04AUR2.SGM 04AUR2 2 S E L U R h t i w D O R P 4 4 1 S 7 W 9 K S D n o d n o m m a h k / > H P G H P G H P G H P G 2014 00:36 Aug Aug 02, 2025 Jkt 265001 PO 00000 Frm 00071 Fmt 4701 Sfmt 4700 E:\FR\FM\04AUR2.SGM 04AUR2 2 S E L U R h t i w D O R P 4 4 1 S 7 W 9 K S D n o d n o m m a h k / > H P G H P G H P G H P G 2014 00:36 Aug 02, 2025 Jkt 265001 PO 00000 Frm 00072 Fmt 4701 Sfmt 4700 E:\FR\FM\04AUR2.SGM 04AUR2 2 S E L U R h t i w D O R P 4 4 1 S 7 W 9 K S D n o d n o m m a h k / > H P G 2014 00:36 Aug 02, 2025 Jkt 265001 PO 00000 Frm 00073 Fmt 4701 Sfmt 4700 E:\FR\FM\04AUR2.SGM 04AUR2 2 S E L U R h t i w D O R P 4 4 1 S 7 W 9 K S D n o d n o m m a h k / > H P G H P G 2014 00:36 Aug 02, 2025 Jkt 265001 PO 00000 Frm 00074 Fmt 4701 Sfmt 4700 E:\FR\FM\04AUR2.SGM 04AUR2 2 S E L U R h t i w D O R P 4 4 1 S 7 W 9 K S D n o d n o m m a h k / > H P G H P G H P G 2014 00:36 Aug 02, 2025 Jkt 265001 PO 00000 Frm 00075 Fmt 4701 Sfmt 4700 E:\FR\FM\04AUR2.SGM 04AUR2 2 S E L U R h t i w D O R P 4 4 1 S 7 W 9 K S D n o d n o m m a h k 36610 Federal Register / Vol. 90, No. 147 / Monday, August 4, 2025 / Rules and Regulations GROUPER software program some collections of ICD–10–PCS procedure codes have a different set of attributes, independent of those of the codes that make them up (that is, their ‘‘components’’). These colle PER software program some collections of ICD–10–PCS procedure codes have a different set of attributes, independent of those of the codes that make them up (that is, their ‘‘components’’). These collections of ICD–10–PCS procedure codes are called clusters. A routine program in the GROUPER, upstream of the MS–DRG assignment logic, searches the claim for clusters. When a cluster is found, it is added to the list of procedures found on the claim. Clusters may be ‘‘restricted’’ by Major Diagnostic Category (MDC) and a restricted cluster inhibits the use of its procedure code component attributes for the MDC’s MS–DRG assignment logic. For example, procedure code cluster 0SPC0JZ (Removal of synthetic substitute from right knee joint, open approach) and 0SRT0JZ (Replacement of right knee joint, femoral surface with synthetic substitute, open approach) may be recognized on a claim if both codes appear (in any order). The reporting of these codes creates a new procedure code cluster ‘‘@0045’’. The cluster @ 0045 has a different set of attributes than either code 0SPC0JZ or 0SRT0JZ by itself and is further ‘‘restricted’’ for MDC 08. When the GROUPER logic determines that the MDC is 08, it i The cluster @ 0045 has a different set of attributes than either code 0SPC0JZ or 0SRT0JZ by itself and is further ‘‘restricted’’ for MDC 08. When the GROUPER logic determines that the MDC is 08, it ignores the attributes of procedure codes 0SPC0JZ and 0SRT0JZ individually, only using those of @0045. This logic results in assignment of the claim to MS–DRGs 466, 467, and 468 (Revision of Hip or Knee Replacement with MCC, with CC, and without CC/MCC, respectively) rather than MS–DRGs 463, 464, and 465 (Wound Debridement and Skin Graft Except Hand for Musculoskeletal and Connective Tissue Disorders with MCC, with CC, and without CC/MCC, respectively). If the principal diagnosis reported is not assigned under MDC 08, the cluster would not restrict the interpretation of the component codes and their individual attributes could be relevant as well as those of @0045. Following publication of the proposed rule, we identified that the intended grouping of cases to the proposed new MS–DRGs was impacted because of these cluster restrictions under MDC 08, therefore we removed the restrictions and performed additional analysis. As a result of removing the restrictions, and due to the existing o mpacted because of these cluster restrictions under MDC 08, therefore we removed the restrictions and performed additional analysis. As a result of removing the restrictions, and due to the existing overlapping procedure code logic among a subset of the MDC 08 MS–DRGs, our analysis showed that further redistribution of the cases under MDC 08 occurs, impacting the remaining number of cases in MS– DRGs 466, 467, and 468 and MS–DRGs 485, 486, and 487, such that, those MS– DRGs no longer satisfy the criteria for a 3-way split. Under our established process for applying the criteria to create subgroups within a base MS– DRG, existing MS–DRGs 466, 467, and 468 would be deleted and a new base MS–DRG for Revision of Hip or Knee Replacement would be established. Additionally, under this established process, existing MS–DRGs 485, 486, and 487 would be deleted and new MS– DRGs (2-way split) for Knee Procedures with Principal Diagnosis of Infection with and without MCC, respectively, would be established. Because these findings were not identified until after publication of the proposed rule, we believe it is appropriate to further consider the creation of proposed new MS–DRGs 403 and 404, alo blished. Because these findings were not identified until after publication of the proposed rule, we believe it is appropriate to further consider the creation of proposed new MS–DRGs 403 and 404, along with the removal of the MDC 08 restrictions on the procedure code clusters and the potential implications for existing MS– DRGs 466, 467, and 468 and MS–DRGs 485, 486, and 487, as well as the creation of new MS–DRGs, in addition to having an updated test Grouper that reflects these potential changes. We also note that any future proposed MS–DRG changes may also impact the surgical hierarchy. After consideration of the public comments we received, and for the reasons described, we are not finalizing our proposal to create new MS–DRGs 403 and 404 (Hip or Knee Procedures with Principal Diagnosis of Periprosthetic Joint Infection with MCC and without MCC, respectively) for FY 2026. As noted, we may further consider these potential MS–DRG changes for future rulemaking. b. Arthroscopy In the FY 2026 IPPS/LTCH PPS proposed rule (90 FR 18052 through 18054), we stated that consistent with our annual review of the MS–DRGs, we consider changes in resource consumption, treatment patterns, techn FY 2026 IPPS/LTCH PPS proposed rule (90 FR 18052 through 18054), we stated that consistent with our annual review of the MS–DRGs, we consider changes in resource consumption, treatment patterns, technology, and any other factors that may change the relative use of hospital resources. We noted that in our review of the claims data from the September 2024 update of the FY 2024 MedPAR file, we identified an extremely low volume of cases for MS–DRG 509 (Arthroscopy). Specifically, we found 16 cases with an average length of stay of 5.2 days and average costs of $18,239. An arthroscopy is a surgical procedure that allows orthopedic surgeons to see the inside of a joint through a small incision and with specialized instruments (for example, arthroscope). The ICD–10–PCS codes describing arthroscopy and currently assigned to MS–DRG 509 are shown in the following table. BILLING CODE 4120–01–P 2 S E L U R h t i w D O R P 4 4 1 S 7 W 9 K S D n o d n o m m a h k VerDate Sep 2014 00:36 Aug 02, 2025 Jkt 265001 PO 00000 Frm 00076 Fmt 4701 Sfmt 4700 E:\FR\FM\04AUR2.SGM 04AUR2 Federal Register / Vol. 90, No. 147 / Monday, August 4, 2025 / Rules and Regulations 36611 BILLING CODE 4120–01–C In light Jkt 265001 PO 00000 Frm 00076 Fmt 4701 Sfmt 4700 E:\FR\FM\04AUR2.SGM 04AUR2 Federal Register / Vol. 90, No. 147 / Monday, August 4, 2025 / Rules and Regulations 36611 BILLING CODE 4120–01–C In light of our initial findings of 16 cases for MS–DRG 509, we further reviewed the MedPAR claims data for cases assigned to MS–DRG 509 for the past 5 fiscal years. As reflected in the following table, the data indicate that the number of cases grouping to MS– DRG 509 has steadily declined. 2 S E L U R h t i w D O R P 4 4 1 S 7 W 9 K S D n o d n o m m a h k VerDate Sep 2014 00:36 Aug 02, 2025 Jkt 265001 PO 00000 Frm 00077 Fmt 4701 Sfmt 4725 E:\FR\FM\04AUR2.SGM 04AUR2 / > H P G H P G 2014 00:36 Aug 02, 2025 Jkt 265001 PO 00000 Frm 00078 Fmt 4701 Sfmt 4700 E:\FR\FM\04AUR2.SGM 04AUR2 2 S E L U R h t i w D O R P 4 4 1 S 7 W 9 K S D n o d n o m m a h k / > H P G H P G 2014 00:36 Aug 02, 2025 Jkt 265001 PO 00000 Frm 00079 Fmt 4701 Sfmt 4700 E:\FR\FM\04AUR2.SGM 04AUR2 36614 Federal Register / Vol. 90, No. 147 / Monday, August 4, 2025 / Rules and Regulations BILLING CODE 4120–01–C Therefore, for clinical consistency and because these codes describe spinal infections that could reasonably require a spi . 147 / Monday, August 4, 2025 / Rules and Regulations BILLING CODE 4120–01–C Therefore, for clinical consistency and because these codes describe spinal infections that could reasonably require a spinal fusion procedure, we proposed to add the previously listed diagnosis codes to the logic list titled ‘‘Spinal Curvature/Malignancy/Infection’’ in MS–DRGs 456, 457, and 458, effective October 1, 2025 for FY 2026. We also identified eight diagnosis codes currently listed in the second logic list titled ‘‘Spinal Curvature/ Malignancy/Infection’’ for case assignment to MS–DRGs 456, 457, and 458 that we believe are not clinically appropriate to maintain in the list. Specifically, we identified the following diagnoses. 2 S E L U R h t i w D O R P 4 4 1 S 7 W 9 K S D n o d n o m m a h k VerDate Sep 2014 00:36 Aug 02, 2025 Jkt 265001 PO 00000 Frm 00080 Fmt 4701 Sfmt 4700 E:\FR\FM\04AUR2.SGM 04AUR2 / > H P G 2014 00:36 Aug 02, 2025 Jkt 265001 PO 00000 Frm 00081 Fmt 4701 Sfmt 4700 E:\FR\FM\04AUR2.SGM 04AUR2 / > H P G H P G 2014 00:36 Aug 02, 2025 Jkt 265001 PO 00000 Frm 00082 Fmt 4701 Sfmt 4700 E:\FR\FM\04AUR2.SGM 04AUR2 2 S E L U R h t i w D O R P 4 4 1 S 7 W 9 K S D n o d n o m m a h k / > .SGM 04AUR2 / > H P G H P G 2014 00:36 Aug 02, 2025 Jkt 265001 PO 00000 Frm 00082 Fmt 4701 Sfmt 4700 E:\FR\FM\04AUR2.SGM 04AUR2 2 S E L U R h t i w D O R P 4 4 1 S 7 W 9 K S D n o d n o m m a h k / > H P G H P G 2014 00:36 Aug 02, 2025 Jkt 265001 PO 00000 Frm 00083 Fmt 4701 Sfmt 4700 E:\FR\FM\04AUR2.SGM 04AUR2 / > H P G H P G 2014 00:36 Aug 02, 2025 Jkt 265001 PO 00000 Frm 00084 Fmt 4701 Sfmt 4700 E:\FR\FM\04AUR2.SGM 04AUR2 2 S E L U R h t i w D O R P 4 4 1 S 7 W 9 K S D n o d n o m m a h k / > H P G H P G 2014 00:36 Aug 02, 2025 Jkt 265001 PO 00000 Frm 00085 Fmt 4701 Sfmt 4700 E:\FR\FM\04AUR2.SGM 04AUR2 2 S E L U R h t i w D O R P 4 4 1 S 7 W 9 K S D n o d n o m m a h k 36620 Federal Register / Vol. 90, No. 147 / Monday, August 4, 2025 / Rules and Regulations because both of these factor into the process of refining the ICD–10 MS– DRGs to better recognize complexity of service and resource utilization. In the FY 2021 IPPS/LTCH PPS final rule (85 FR 58540 through 58541), we provided a summary of the comments we had received in response to our request for feedback on what factors or criteria to consider in determining whether a procedure is designated as an O.R. procedure in the ICD summary of the comments we had received in response to our request for feedback on what factors or criteria to consider in determining whether a procedure is designated as an O.R. procedure in the ICD–10–PCS classification system for future consideration. We also stated that in consideration of the PHE, we believed it may be appropriate to allow additional time for the claims data to stabilize prior to selecting the timeframe to analyze for this review. As discussed in the FY 2026 IPPS/ LTCH PPS proposed rule (90 FR 18059 through 18060), we stated we continue to believe additional time is necessary as we continue to develop our process and methodology. As discussed in the FY 2024 IPPS/LTCH PPS final rule (88 FR 58749), we have signaled in prior rulemaking that the designation of an O.R. procedure encompasses more than the physical location of the hospital room in which the procedure may be performed; in other words, the performance of a procedure in an operating room is not the sole determining factor we will consider as we examine the designation of a procedure in the ICD–10–PCS classification system. We stated we are exploring alternatives on how we may restructure the current O. termining factor we will consider as we examine the designation of a procedure in the ICD–10–PCS classification system. We stated we are exploring alternatives on how we may restructure the current O.R. and non- O.R. designations for procedures by leveraging the detail that is available in the ICD–10 claims data. We are considering the feedback received on what factors and/or criteria to consider in determining whether a procedure is designated as an O.R. procedure in the ICD–10–PCS classification system as we continue to develop our process and methodology and will provide more detail on this analysis and the methodology for conducting this comprehensive review in future rulemaking. We encourage the public to continue to submit feedback and comments on any other factors in consideration of our refinement efforts to recognize and differentiate consumption of resources under the ICD–10 MS–DRGs. Comment: Commenters supported CMS’ plan to continue to conduct the comprehensive, systematic review of the ICD–10–PCS codes and to evaluate their current O.R. and non-O.R. designations. These commenters expressed that they were supportive of CMS’ decision to continue to develop our process an review of the ICD–10–PCS codes and to evaluate their current O.R. and non-O.R. designations. These commenters expressed that they were supportive of CMS’ decision to continue to develop our process and methodology. A commenter stated they agreed that the revolution in medical procedures in recent years may render the performance of a procedure in an O.R. a less critical distinction in driving payment policy and stated that because of technological advances, sophisticated, resource-intensive procedures are no longer confined to the O.R. setting and noted that in their observation, bi-plane radiology interventional suites and cardiac catheterization labs used for procedures such as mechanical thrombectomy or endovascular coiling for aneurysms can utilize more advanced equipment and supplies than a basic operating room with minimal installed equipment. This commenter recommended that CMS provide detailed impact files prior to the adoption of changes to the designation of procedure codes in the ICD–10–PCS classification and stated that they look forward to commenting on CMS’ data analysis and methodology in the future. As part of the broader and continuing conversation about the design n the ICD–10–PCS classification and stated that they look forward to commenting on CMS’ data analysis and methodology in the future. As part of the broader and continuing conversation about the designations of procedures in the ICD–10–PCS classification system, a commenter recommended that CMS work closely with physician specialty societies and industry stakeholders to identify the most important drivers of complexity and resource use in the hospital setting. Another commenter specifically recommended that CMS include nurse representatives when reviewing methodologies for determining the designation of procedure codes in the ICD–10–PCS classification system and noted that nurses are an integral part of the healthcare team, work closely with physicians in the operating room and have firsthand knowledge and experience to know what hospital resources are needed for procedures. This commenter further stated that omitting nurses only serves to discount their perspectives and could result in decision making that does not fully capture the hospital resources needed. Response: We thank the commenters for their support. We also thank commenters for sharing their views and their willingness decision making that does not fully capture the hospital resources needed. Response: We thank the commenters for their support. We also thank commenters for sharing their views and their willingness to provide feedback and recommendations as to what factors to consider in evaluating O.R. versus non-O.R. designations. We agree with commenters and believe that there may be other factors to consider with regard to resource utilization, particularly with the implementation of ICD–10. While CMS has already convened an internal team comprised of clinicians, consultants, coding specialists and other policy analysts, as well as provided the opportunity for interested parties to provide feedback as to what factors to consider in evaluating O.R. versus non- O.R. designations, we look forward to further input and feedback from interested parties, including nurses. As discussed in the proposed rule, we are considering the feedback received to date on what factors and/or criteria to consider in determining whether a procedure is designated as an O.R. procedure in the ICD–10–PCS classification system as we continue to develop our process and methodology and will provide more detail on this anal termining whether a procedure is designated as an O.R. procedure in the ICD–10–PCS classification system as we continue to develop our process and methodology and will provide more detail on this analysis and the methodology for conducting this comprehensive review in future rulemaking. As part of this comprehensive review of the procedure codes, we are also considering renaming the designations that determine whether and in what way the presence of that procedure on a claim impacts the MS– DRG assignment (that is, ‘‘O.R. procedures’’, ‘‘non-O.R. procedures’’, or ‘‘non O.R. affecting the MS–DRG’’) for consistency. As discussed in prior rulemaking and earlier in this section of the preamble of this final rule, we have signaled that the performance of a procedure in an operating room is not the sole determining factor we will consider as we examine the designation of a procedure in the ICD–10–PCS classification system. We encourage the public to continue to submit comments and feedback on any other factors to consider in our refinement efforts to recognize and differentiate consumption of resources for procedures within the ICD–10 MS–DRGs under the IPPS. As discussed in the FY 2026 I n any other factors to consider in our refinement efforts to recognize and differentiate consumption of resources for procedures within the ICD–10 MS–DRGs under the IPPS. As discussed in the FY 2026 IPPS/ LTCH PPS proposed rule, we received requests regarding changing the designation of specific ICD–10–PCS procedure codes from non-O.R. to O.R. procedures. In this section of the preamble of this FY 2026 IPPS/LTCH PPS final rule, as we did in the proposed rule, we summarize and respond to those requests. In this section of the preamble of this final rule, we also discuss the proposal we made based on our internal review and analysis and the process that was utilized for evaluating each procedure code. For each procedure, we considered— • Whether the procedure would typically require the resources of an operating room; • Whether it is an extensive or a non- extensive procedure; and • To which MS–DRGs the procedure should be assigned. We note that many MS–DRGs require the presence of any O.R. procedure. As a result, cases with a principal diagnosis associated with a particular MS–DRG would, by default, be grouped to that MS–DRG. Therefore, we do not list these MS–DRGs in our discussion .R. procedure. As a result, cases with a principal diagnosis associated with a particular MS–DRG would, by default, be grouped to that MS–DRG. Therefore, we do not list these MS–DRGs in our discussion in this section of the preamble of this FY VerDate Sep 2014 00:36 Aug 02, 2025 Jkt 265001 PO 00000 Frm 00086 Fmt 4701 Sfmt 4700 E:\FR\FM\04AUR2.SGM 04AUR2 2 S E L U R h t i w D O R P 4 4 1 S 7 W 9 K S D n o d n o m m a h k Federal Register / Vol. 90, No. 147 / Monday, August 4, 2025 / Rules and Regulations 36621 2026 IPPS/LTCH PPS final rule. Instead, we only discuss MS–DRGs that require explicitly adding the relevant procedure codes to the GROUPER logic in order for those procedure codes to affect the MS– DRG assignment as intended. For procedures that would not typically require the resources of an operating room, we determined if the procedure should affect the MS–DRG assignment. In cases where we proposed to change the designation of procedure codes from non-O.R. procedures to O.R. procedures, we also proposed one or more MS–DRGs with which these procedures are clinically aligned and to which the procedure code would be assigned. In addition, cases that contain O.R. procedures wil ocedures, we also proposed one or more MS–DRGs with which these procedures are clinically aligned and to which the procedure code would be assigned. In addition, cases that contain O.R. procedures will map to MS–DRGs 981, 982, or 983 (Extensive O.R. Procedure Unrelated to Principal Diagnosis with MCC, with CC, and without CC/MCC, respectively) or MS–DRGs 987, 988, or 989 (Non-Extensive O.R. Procedure Unrelated to Principal Diagnosis with MCC, with CC, and without CC/MCC, respectively) when they do not contain a principal diagnosis that corresponds to one of the MDCs to which that procedure is assigned. These procedures need not be assigned to MS–DRGs 981 through 989 in order for this to occur. Therefore, we did not specifically address that aspect in summarizing the request and our response to that request or the proposal we made based on our internal review and analysis in the proposed rule and in this section of the preamble of this FY 2026 IPPS/LTCH PPS final rule. b. Non-O.R. Procedures to O.R. Procedures (1) Open Drainage of the Mandible In the FY 2022 IPPS/LTCH PPS final rule (86 FR 44895 through 44896), we discussed a request we received to change the designation of procedur dures to O.R. Procedures (1) Open Drainage of the Mandible In the FY 2022 IPPS/LTCH PPS final rule (86 FR 44895 through 44896), we discussed a request we received to change the designation of procedure codes 0N9R0ZZ (Drainage of maxilla, open approach), 0N9T0ZZ (Drainage of right mandible, open approach), and 0N9V0ZZ (Drainage of left mandible, open approach), from non-O.R. to O.R. procedures. In the FY 2022 final rule, we stated that we disagreed that the procedures describing the open drainage of the maxilla or mandible typically require the resources of an operating room. We stated that if admission is required for the treatment of a jaw infection, the admission is quite likely due to the need for IV antibiotics as opposed to the need for operating room resources in an inpatient setting. After consideration of the public comments we received, we finalized our proposal to maintain the non-O.R. designation of ICD–10–PCS procedure codes 0N9R0ZZ, 0N9T0ZZ, and 0N9V0ZZ, without modification, for FY 2022. As discussed in the FY 2026 IPPS/ LTCH PPS proposed rule (90 FR 18060 through 18061), we again received a request to change the designation of ICD–10–PCS codes 0N9T0ZZ (Drainage of ri on, for FY 2022. As discussed in the FY 2026 IPPS/ LTCH PPS proposed rule (90 FR 18060 through 18061), we again received a request to change the designation of ICD–10–PCS codes 0N9T0ZZ (Drainage of right mandible, open approach), and 0N9V0ZZ (Drainage of left mandible, open approach), from non-O.R. to O.R. The requestor identified procedure code 0W950ZZ (Drainage of lower jaw, open approach) that is currently designated as an O.R. procedure and stated that the body part value of mandible is more specific than the body part value of lower jaw. The requestor also stated that in the ICD–10–PCS classification, other procedure codes that describe drainage procedures performed on body parts deeper than subcutaneous tissue, such as muscles, tendons, and bone, are designated as O.R. procedures. Therefore, the requestor stated that procedure codes 0N9T0ZZ and 0N9V0ZZ should also be recognized as O.R. procedures for purposes of MS– DRG assignment. The requestor did not provide a specific list of the procedure codes that describe drainage procedures performed on body parts deeper than subcutaneous tissue, such as muscles, tendons, and bone, that are currently designated as O.R. procedures for the procedure codes that describe drainage procedures performed on body parts deeper than subcutaneous tissue, such as muscles, tendons, and bone, that are currently designated as O.R. procedures for CMS to review. In the ICD–10 MS–DRGs Definitions Manual Version 42.1, procedure codes 0N9T0ZZ and 0N9V0ZZ are currently designated as non-O.R. procedures for purposes of MS–DRG assignment. We reviewed this issue and in the proposed rule, we stated we continue to disagree that the procedures describing the open drainage of the mandible are typically performed in the operating room under general anesthesia. As discussed in the FY 2022 IPPS/LTCH PPS final rule (86 FR 44896), these procedures can be done in an oral surgeon’s office, or an outpatient setting and are rarely performed in the inpatient setting. Therefore, we proposed to maintain the current non-O.R. designation of ICD– 10–PCS procedure codes 0N9T0ZZ and 0N9V0ZZ. Comment: A commenter opposed CMS’ proposal to maintain the current non-O.R. designation of ICD–10–PCS procedure codes 0N9T0ZZ (Drainage of right mandible, open approach), and 0N9V0ZZ (Drainage of left mandible, open approach) and stated when performed in the inpatient on-O.R. designation of ICD–10–PCS procedure codes 0N9T0ZZ (Drainage of right mandible, open approach), and 0N9V0ZZ (Drainage of left mandible, open approach) and stated when performed in the inpatient setting, these procedures often involve complex infectious disease cases requiring significant resources. This commenter stated that their analysis and clinical experience suggest that these procedures, when performed on hospitalized patients, are substantially different and more complex when compared to routine outpatient drainage procedures and more closely align with other O.R.-designated procedures in terms of resource utilization. The commenter further stated that the infectious nature of these cases specifically requires additional resources beyond the procedure itself, including extended antimicrobial therapy, infectious diseases consultation and potential management of sepsis or other systemic complications. Response: We thank the commenter for their feedback. We reviewed the commenter’s concerns and continue to support maintaining the current non-O.R. designation of the procedure codes describing open drainage of the mandible and disagree that the procedures describing the op enter’s concerns and continue to support maintaining the current non-O.R. designation of the procedure codes describing open drainage of the mandible and disagree that the procedures describing the open drainage of the mandible typically require the resources of an operating room. We continue to believe if admission is required for the treatment of a jaw infection, the admission is quite likely due to the need for IV antibiotics as opposed to the need for operating room resources in an inpatient setting. In response to the issues raised by this commenter, we examined claims data from the September 2024 update of the FY 2024 MedPAR file for cases reporting 0N9T0ZZ or 0N9V0ZZ. Our findings are shown in the following table. BILLING CODE 4120–01–P VerDate Sep 2014 00:36 Aug 02, 2025 Jkt 265001 PO 00000 Frm 00087 Fmt 4701 Sfmt 4700 E:\FR\FM\04AUR2.SGM 04AUR2 2 S E L U R h t i w D O R P 4 4 1 S 7 W 9 K S D n o d n o m m a h k 36622 Federal Register / Vol. 90, No. 147 / Monday, August 4, 2025 / Rules and Regulations BILLING CODE 4120–01–C As shown in the table, we found a total of 29 cases reporting procedure codes 0N9T0ZZ or 0N9V0ZZ across the MS–DRGs, demonstrating that procedures that / Rules and Regulations BILLING CODE 4120–01–C As shown in the table, we found a total of 29 cases reporting procedure codes 0N9T0ZZ or 0N9V0ZZ across the MS–DRGs, demonstrating that procedures that describe open drainage of the mandible are infrequently performed in the inpatient setting. Our data findings also demonstrate, generally, the cases reporting procedures describing the open drainage of the mandible have average costs that are lower than the average costs of all cases in their respective MS–DRGs, while the average lengths of stay are shorter. Therefore, after consideration of the public comments we received, for the reasons stated, we are finalizing our proposal to maintain the current non- O.R. designation of ICD–10–PCS procedure codes 0N9T0ZZ and 0N9V0ZZ, without modification, for FY 2026. In our review of this issue, in the proposed rule, we stated we agree with the requestor that in the ICD–10 MS– DRGs Definitions Manual Version 42.1, procedure code 0W950ZZ (Drainage of lower jaw, open approach) is currently designated as an O.R. procedure for purposes of MS–DRG assignment. While we have stated in prior rulemaking that a correlation cannot be made between procedures lower jaw, open approach) is currently designated as an O.R. procedure for purposes of MS–DRG assignment. While we have stated in prior rulemaking that a correlation cannot be made between procedures performed in general anatomic regions and procedures performed in specific body parts because these procedures coded with the general anatomic regions body part represent a broader range of procedures that cannot be coded to a specific body part, we stated we continue to believe if admission is required for the treatment of a jaw infection, the admission is quite likely due to the need for IV antibiotics as opposed to the need for operating room resources in an inpatient setting. Like procedures that describe open drainage of the mandible, procedures to drain the lower jaw can also be done in an oral surgeon’s office or an outpatient setting and are rarely performed in the inpatient setting. In the proposed rule we stated we agree that procedures that describe open drainage of the mandible consume resources comparable to the related ICD–10–PCS procedure code that describes the open drainage of the jaw. These procedures do not typically require the resources of an operating room and ar e consume resources comparable to the related ICD–10–PCS procedure code that describes the open drainage of the jaw. These procedures do not typically require the resources of an operating room and are not surgical in nature. Therefore, for clinical consistency, we proposed to remove procedure code 0W950ZZ (Drainage of lower jaw, open approach) from the FY 2026 ICD–10 MS–DRGs Version 43 Definitions Manual in Appendix E—Operating Room Procedures and Procedure Code/ MS–DRG Index as an O.R. procedure. Under this proposal, this procedure VerDate Sep 2014 00:36 Aug 02, 2025 Jkt 265001 PO 00000 Frm 00088 Fmt 4701 Sfmt 4700 E:\FR\FM\04AUR2.SGM 04AUR2 2 S E L U R h t i w D O R P 4 4 1 S 7 W 9 K S D n o d n o m m a h k / > H P G 2014 00:36 Aug 02, 2025 Jkt 265001 PO 00000 Frm 00089 Fmt 4701 Sfmt 4700 E:\FR\FM\04AUR2.SGM 04AUR2 2 S E L U R h t i w D O R P 4 4 1 S 7 W 9 K S D n o d n o m m a h k / > H P G 2014 00:36 Aug 02, 2025 Jkt 265001 PO 00000 Frm 00090 Fmt 4701 Sfmt 4700 E:\FR\FM\04AUR2.SGM 04AUR2 2 S E L U R h t i w D O R P 4 4 1 S 7 W 9 K S D n o d n o m m a h k Federal Register / Vol. 90, No. 147 / Monday, August 4, 2025 / Rules and Regulations 36625 The commenter provided a table co 04AUR2 2 S E L U R h t i w D O R P 4 4 1 S 7 W 9 K S D n o d n o m m a h k Federal Register / Vol. 90, No. 147 / Monday, August 4, 2025 / Rules and Regulations 36625 The commenter provided a table comparing clinical functions associated with percutaneous coronary interventions as follows: The commenter also stated that the primary role of the AGENTTM implant is supported by ICD–10–PCS Guidelines which instruct to sequence the procedure performed for definitive treatment most related to the principal diagnosis as principal procedure. The commenter included the FDA labeling language that was referenced in the preamble of the proposed rule (90 FR 18062) and stated that because patients who are admitted for a procedure to deliver the AGENTTM implant have a principal diagnosis of ISR, the AGENTTM implant is the principal procedure from a coding perspective and is the primary procedure that represents the therapeutic intent of the intervention. The commenter asserted that the AGENTTM DCB therapy is consistent with drug-eluting stent (DES) therapy in terms of diagnostic methods, intra- operative procedure steps, complexity and risk, therefore, consistent with DES and other procedure code erapy is consistent with drug-eluting stent (DES) therapy in terms of diagnostic methods, intra- operative procedure steps, complexity and risk, therefore, consistent with DES and other procedure codes for percutaneous coronary interventions (PCI), the codes for the AGENTTM DCB should be designated as O.R. codes. The commenter stated that the procedure involving the AGENTTM implant is most clinically similar to a DES procedure because both are PCI procedures, performed only by physicians experienced in PCI, involve a surgical implant within the coronary artery, involve the transfer of therapeutic substances to a lesion and are targeted localized therapies as opposed to systemic treatments. The commenter added that the procedural steps to prepare a vessel for the AGENTTM implant is consistent with that required for a DES including obtaining percutaneous arterial access, positioning a guide catheter in the heart, advancing a guide wire across the coronary artery stenosis, preparing the vessel for the AGENTTM implant using specialized catheters and devices as needed (for example, angioplasty balloon, cutting balloon, lithotripsy, atherectomy), and using angiographic imaging to visuali essel for the AGENTTM implant using specialized catheters and devices as needed (for example, angioplasty balloon, cutting balloon, lithotripsy, atherectomy), and using angiographic imaging to visualize the heart and IVUS or OCT to guide the procedure. The commenter stated that in addition to the clinical similarities between the AGENTTM DCB and a DES, the procedure codes describing use of the AGENTTM Paclitaxel-Coated Balloon Catheter technology in ICD–10–PCS Table XW0 (Introduction, Anatomical Regions) closely mirror the procedure codes describing use of a DES, in ICD– 10–PCS Table 027, Dilation of Heart and Great Vessels because both sets of codes account for treatment of multiple coronary arteries and the use of multiple devices. The commenter asserted that since the procedure codes describing a DES and all other PCI procedure codes are classified as surgical, the AGENTTM Paclitaxel-Coated Balloon Catheter technology should be similarly classified as surgical. The commenter stated that the 16 procedure codes describing use of the AGENTTM Paclitaxel-Coated Balloon Catheter technology should be designated as O.R. procedures regardless of whether there is immediate impact to the M that the 16 procedure codes describing use of the AGENTTM Paclitaxel-Coated Balloon Catheter technology should be designated as O.R. procedures regardless of whether there is immediate impact to the MS–DRG assignment. Other commenters expressed appreciation that CMS reviewed the request to reconsider the MS–DRG assignment of the sixteen procedure codes describing use of the AGENTTM Paclitaxel-Coated Balloon Catheter technology from non-O.R. to O.R. however, the commenters disagreed with the proposal to maintain the DCB placement as a non-O.R. procedure. According to the commenters, because the vessel preparation techniques discussed to allow placement of the AGENTTM Paclitaxel-Coated Balloon Catheter are O.R. services, it would only be consistent for the AGENTTM Paclitaxel-Coated Balloon Catheter service itself to also be designated as an O.R. service. The commenters stated that, from a similar perspective, just as drug-eluting intraluminal device procedures (drug-eluting stents) are considered alongside non-drug-eluting intraluminal devices (stents); the AGENTTM Paclitaxel-Coated Balloon Catheter service should be categorized in the same manner as other dilation of coronary artery onsidered alongside non-drug-eluting intraluminal devices (stents); the AGENTTM Paclitaxel-Coated Balloon Catheter service should be categorized in the same manner as other dilation of coronary artery procedures (that is, angioplasty). Response: We appreciate the commenters’ feedback. We disagree with the commenter’s (the manufacturer) statement that the vessel preparation technique(s) are secondary to delivery of the AGENTTM implant (that is, paclitaxel). While the delivery of paclitaxel via the AGENTTM Paclitaxel-Coated Balloon Catheter is the intended therapeutic intervention to treat ISR, it cannot occur in the absence of the initial vessel preparation procedure (for example, angioplasty for vessel dilation, and atherectomy, lithotripsy, and/or cutting balloon for plaque modification). In response to the commenter’s statement that the primary role of the AGENTTM implant is supported by ICD–10–PCS sequencing guidelines for the principal procedure, we note that the ICD–10–PCS Guidelines regarding sequencing of the principal procedure have no direct correlation on MS–DRG assignment or whether a procedure code is designated as O.R. or non-O.R. We also note that the sequencing of th nes regarding sequencing of the principal procedure have no direct correlation on MS–DRG assignment or whether a procedure code is designated as O.R. or non-O.R. We also note that the sequencing of the procedure on the claim does not have an effect on MS– DRG assignment. Rather, the MS–DRG assignment is based on the O.R. or non- O.R. designation of the procedure code. While we agree that there are some procedural similarities between delivery of the AGENTTM implant and the insertion of a DES, we note that a major distinction is that the objective of the AGENTTM Paclitaxel-Coated Balloon Catheter is to deliver a targeted anti- proliferative drug dose, without introducing an extra layer of metal that is intended to remain permanently. We disagree with the commenter that the procedure involving the AGENTTM implant should be designated as an O.R. procedure. Although the FDA VerDate Sep 2014 00:36 Aug 02, 2025 Jkt 265001 PO 00000 Frm 00091 Fmt 4701 Sfmt 4700 E:\FR\FM\04AUR2.SGM 04AUR2 2 S E L U R h t i w D O R P 4 4 1 S 7 W 9 K S D n o d n o m m a h k / > H P G 2014 00:36 Aug 02, 2025 Jkt 265001 PO 00000 Frm 00092 Fmt 4701 Sfmt 4700 E:\FR\FM\04AUR2.SGM 04AUR2 2 S E L U R h t i w D O R P L U R h t i w D O R P 4 4 1 S 7 W 9 K S D n o d n o m m a h k / > H P G 2014 00:36 Aug 02, 2025 Jkt 265001 PO 00000 Frm 00092 Fmt 4701 Sfmt 4700 E:\FR\FM\04AUR2.SGM 04AUR2 2 S E L U R h t i w D O R P 4 4 1 S 7 W 9 K S D n o d n o m m a h k / > H P G 2014 00:36 Aug 02, 2025 Jkt 265001 PO 00000 Frm 00093 Fmt 4701 Sfmt 4700 E:\FR\FM\04AUR2.SGM 04AUR2 2 S E L U R h t i w D O R P 4 4 1 S 7 W 9 K S D n o d n o m m a h k 36628 Federal Register / Vol. 90, No. 147 / Monday, August 4, 2025 / Rules and Regulations FY 2022. We refer readers to the FY 2022 IPPS/LTCH PPS final rule (86 FR 44916 through 44926) for a complete discussion of our response to public comments regarding the potential severity level designation changes. Instead, for FY 2022, we finalized a new Medicare Code Editor (MCE) code edit for ‘‘unspecified’’ codes, effective with discharges on and after April 1, 2022. We stated we believed finalizing this new edit would provide additional time for providers to be educated while not affecting the payment the provider is eligible to receive. We refer the reader to section II.D.14.e. of the preamble of the FY 2022 IPPS/LTCH PPS final rule (86 FR 44940 through 44943) for the complet affecting the payment the provider is eligible to receive. We refer the reader to section II.D.14.e. of the preamble of the FY 2022 IPPS/LTCH PPS final rule (86 FR 44940 through 44943) for the complete discussion. As discussed in the FY 2023 IPPS/ LTCH PPS final rule (87 FR 48866), we stated that as the new unspecified edit became effective beginning with discharges on and after April 1, 2022, we believed it was appropriate to not propose to change the designation of any ICD–10–CM diagnosis codes, including the unspecified codes that are subject to the ‘‘Unspecified Code’’ edit, as we continue our comprehensive CC/ MCC analysis to allow interested parties the time needed to become acclimated to the new edit. In the FY 2023 IPPS/LTCH proposed rule (87 FR 28177 through 28181), we also requested public comments on how the reporting of diagnosis codes in categories Z55–Z65 might improve our ability to recognize severity of illness, complexity of illness, and/or utilization of resources under the MS–DRGs. We stated we were also interested in receiving feedback on how we might otherwise foster the documentation and reporting of the diagnosis codes describing social and economic circumsta er the MS–DRGs. We stated we were also interested in receiving feedback on how we might otherwise foster the documentation and reporting of the diagnosis codes describing social and economic circumstances to more accurately reflect each health care encounter and improve the reliability and validity of the coded data. In the FY 2024 IPPS/LTCH PPS final rule (88 FR 58755 through 58759), based on our analysis of the impact on resource use for the ICD–10–CM Z codes that describe homelessness and after consideration of public comments, we finalized changes to the severity levels for diagnosis codes Z59.00 (Homelessness, unspecified), Z59.01 (Sheltered homelessness), and Z59.02 (Unsheltered homelessness), from NonCC to CC. In the FY 2025 proposed rule (89 FR 35995), we noted that since the FY 2021 IPPS/LTCH PPS final rule we have continued to solicit feedback regarding the nine guiding principles, as well as other possible ways we can incorporate meaningful indicators of clinical severity. We stated we had encouraged the public to provide a detailed explanation of how applying a suggested concept or principle would ensure that the severity designation appropriately reflects resource use e stated we had encouraged the public to provide a detailed explanation of how applying a suggested concept or principle would ensure that the severity designation appropriately reflects resource use for any diagnosis code when providing feedback or comments. We also noted in the FY 2024 IPPS/LTCH PPS proposed rule (88 FR 26748 through 26750) we illustrated how the nine guiding principles might be applied in evaluating changes to the severity designations of diagnosis codes in our discussion of our proposed changes to the severity level designation for certain diagnosis codes that describe homelessness. After consideration of the ongoing feedback and comments we had received, we proposed to finalize the nine guiding principles. After consideration of the public comments received, and for the reasons discussed, we finalized the nine guiding principles as listed previously in the FY 2025 IPPS/LTCH PPS final rule (89 FR 69076 through 69078). Accordingly, we stated that our evaluations to determine the extent to which the presence of a diagnosis code as a secondary diagnosis results in increased hospital resource use will include a combination of mathematical analysis of claims data as determine the extent to which the presence of a diagnosis code as a secondary diagnosis results in increased hospital resource use will include a combination of mathematical analysis of claims data as discussed in the FY 2020 IPPS/LTCH PPS proposed rule (84 FR 19235) and the application of the nine guiding principles. Comment: A commenter stated that they applaud the inclusion of the guiding principles that recognize organ system instability or failure, chronic illness with susceptibility to exacerbations, conditions requiring higher levels of care, and systemic impact. This commenter stated that these principles appropriately capture the resource intensity associated with managing complex infectious diseases. This commenter also urged CMS to expedite the comprehensive CC/MCC analysis, paying particular attention to diagnoses that describe infectious conditions, and recommended that CMS consider additional factors specific to infectious disease management such as antimicrobial resistances, factors related to immunocompromised hosts and the role of antimicrobial stewardship when reviewing these conditions. Response: We thank the commenter for their support and appreciate their feedb ces, factors related to immunocompromised hosts and the role of antimicrobial stewardship when reviewing these conditions. Response: We thank the commenter for their support and appreciate their feedback. We continue to welcome feedback regarding the guiding principles, as well as other possible ways we can incorporate meaningful indicators of clinical severity. We will examine these suggestions as we continue the comprehensive CC/MCC analysis and will provide more detail in future rulemaking. Additionally, in the FY 2025 IPPS/ LTCH PPS final rule (89 FR 69079 through 69084), based on our analysis of the impact on resource use for the ICD– 10–CM diagnosis codes that describe inadequate housing and housing instability, and after consideration of public comments, we finalized changes to the severity levels for seven diagnosis codes for FY 2025. As discussed in the FY 2026 IPPS/ LTCH PPS proposed rule (90 FR 18064), we did not receive any requests to change the severity level designations of specific ICD–10–CM diagnosis codes. We stated at this time, we believe it is appropriate to continue to formulate future next steps in our comprehensive review of the severity designations of ICD– of specific ICD–10–CM diagnosis codes. We stated at this time, we believe it is appropriate to continue to formulate future next steps in our comprehensive review of the severity designations of ICD–10–CM diagnosis codes, rather than proposing to change the designation of individual ICD–10–CM diagnosis codes. Therefore, we did not propose any severity designation changes for FY 2026. Comment: Commenters supported the decision to not propose any severity designation changes for FY 2026. A commenter stated that they appreciate CMS’ commitment to refining the MS– DRG system to better reflect hospital resource use. Response: We appreciate the commenters’ support. Comment: Several commenters stated that they appreciate that CMS finalized changes to the severity level designations for the diagnosis codes in category Z16 (Resistance to antimicrobial drugs) from a NonCC to a CC in the FY 2020 IPPS/LTCH PPS final rule. These commenters stated that they continue to support these designations and encouraged CMS to clarify that all current and future ICD–10–CM diagnosis codes describing antimicrobial resistance will be appropriately designated as CCs. Other commenters encouraged CMS to examin d encouraged CMS to clarify that all current and future ICD–10–CM diagnosis codes describing antimicrobial resistance will be appropriately designated as CCs. Other commenters encouraged CMS to examine the ICD–10–CM diagnosis codes that describe longstanding persistent and permanent atrial fibrillation to determine the hospital resource utilization related to addressing these diagnoses and to analyze whether these codes should be considered for severity designation changes. These commenters stated that from a resource perspective, patients with longstanding persistent atrial fibrillation or permanent atrial fibrillation require markedly more intensive management and typically face longer operative times, higher complication rates, prolonged hospital stays, and increased readmission risk. VerDate Sep 2014 00:36 Aug 02, 2025 Jkt 265001 PO 00000 Frm 00094 Fmt 4701 Sfmt 4700 E:\FR\FM\04AUR2.SGM 04AUR2 2 S E L U R h t i w D O R P 4 4 1 S 7 W 9 K S D n o d n o m m a h k Federal Register / Vol. 90, No. 147 / Monday, August 4, 2025 / Rules and Regulations 36629 Response: We appreciate the feedback. In response to the request that CMS clarify that all future ICD–10–CM diagnosis codes descri l. 90, No. 147 / Monday, August 4, 2025 / Rules and Regulations 36629 Response: We appreciate the feedback. In response to the request that CMS clarify that all future ICD–10–CM diagnosis codes describing antimicrobial resistance will be designated as CCs, as discussed in prior rulemaking and in section II.C.9 of this final rule, consistent with our established process for assigning new diagnosis or new procedure codes to MDCs, MS–DRGs, and the associated attributes (severity level and O.R. status), we examine the MDCs, MS–DRG assignment and severity level designation of the predecessor diagnosis codes to inform our assignments and designations. We review the predecessor code and MS–DRG assignment most closely associated with the new diagnosis or procedure code, and in the absence of claims data, we consider other factors that may be relevant to the MS–DRG assignment, including the severity of illness, treatment difficulty, complexity of service and the resources utilized in the diagnosis and/or treatment of the condition. As we have previously noted, this process does not automatically result in the new diagnosis or procedure code being assigned to the same MS–DRG or to have the s sis and/or treatment of the condition. As we have previously noted, this process does not automatically result in the new diagnosis or procedure code being assigned to the same MS–DRG or to have the same designation as the predecessor code. As we continue our comprehensive CC/MCC analysis, we may consider proposing changes for other diagnosis codes in the future based on our analysis of the impact on resource use, per our methodology, as previously described, and consideration of the guiding principles consistent with our annual process and will provide more detail in future rulemaking. We have updated the Impact on Resource Use Files on the CMS website so that the public can review the mathematical data for the impact on resource use generated using claims from the FY 2019 through the FY 2024 MedPAR files. These files are posted on the CMS website at https://www.cms.gov/medicare/ payment/prospective-payment-systems/ acute-inpatient-pps/ms-drg- classifications-and-software. We encourage individuals with comments about the severity level designations of ICD–10–CM diagnosis codes to submit these comments no later than October 20th of each year, via the Medicare Electronic Application e individuals with comments about the severity level designations of ICD–10–CM diagnosis codes to submit these comments no later than October 20th of each year, via the Medicare Electronic Application Request Information SystemTM (MEARISTM) at: https://mearis.cms.gov/ public/home, so that they can be considered for possible inclusion in the annual proposed rule. When submitting requests to change the severity level designation of an ICD–10–CM diagnosis code when reported as a secondary diagnosis, we encourage the public to review the mathematical data for the impact on resource use generated using claims from the FY 2019 through the FY 2024 MedPAR files as well as to provide a detailed explanation of how applying a suggested guiding principle would ensure that the severity designation appropriately reflects resource use for any diagnosis code. For new diagnosis codes approved for FY 2026, consistent with our annual process for designating a severity level (MCC, CC, or NonCC) for new diagnosis codes, we first review the predecessor code designation, followed by review and consideration of other factors that may be relevant to the severity level designation, including the severity of agnosis codes, we first review the predecessor code designation, followed by review and consideration of other factors that may be relevant to the severity level designation, including the severity of illness, treatment difficulty, complexity of service and the resources utilized in the diagnosis or treatment of the condition. We note that this process does not automatically result in the new diagnosis code having the same designation as the predecessor code. We refer the reader to section II.C.9 of the preamble of this FY 2026 IPPS/LTCH PPS final rule for the discussion of the finalized changes to the ICD–10–CM and ICD–10–PCS coding systems for FY 2026. c. Additions and Deletions to the Diagnosis Code Severity Levels for FY 2026 In the FY 2026 IPPS/LTCH PPS proposed rule (90 FR 18065), we stated that the following tables identify the proposed additions and deletions to the diagnosis code MCC and CC severity levels list for FY 2026 and are available on the CMS website at: https:// www.cms.gov/Medicare/Medicare-Fee- for-Service-Payment/ AcuteInpatientPPS/index.html Table 6I.1—Proposed Additions to the MCC List—FY 2026; Table 6I.2—Proposed Deletions to the MCC List—FY 2026; Table 6J. cms.gov/Medicare/Medicare-Fee- for-Service-Payment/ AcuteInpatientPPS/index.html Table 6I.1—Proposed Additions to the MCC List—FY 2026; Table 6I.2—Proposed Deletions to the MCC List—FY 2026; Table 6J.1—Proposed Additions to the CC List—FY 2026; and Table 6J.2—Proposed Deletions to the CC List—FY 2026. We note that there was an inadvertent error in the listing of Table 6I.2 in the preamble of the proposed rule as there were no proposed deletions to the MCC list for FY 2026 and Table 6I.2 was not developed in association with the proposed rule. Comment: Commenters agreed with the proposed additions and deletions to the MCC and CC lists as shown in tables 6I.1, 6J.1, and 6J.2 associated with the proposed rule. Response: We appreciate the commenters’ support. The following tables associated with this final rule reflect the finalized severity levels under Version 43 of the ICD–10 MS–DRGs for FY 2026 and are available on the CMS website at: https:// www.cms.gov/medicare/payment/ prospective-payment-systems/acute- inpatient-pps; Table 6I.—Complete MCC List—FY 2026; Table 6I.1— Additions to the MCC List—FY 2026; Table 6J.—Complete CC List—FY 2026; Table 6J.1—Additions to the CC List— FY 20 payment-systems/acute- inpatient-pps; Table 6I.—Complete MCC List—FY 2026; Table 6I.1— Additions to the MCC List—FY 2026; Table 6J.—Complete CC List—FY 2026; Table 6J.1—Additions to the CC List— FY 2026; and Table 6J.2—Deletions to the CC List—FY 2026. d. CC Exclusions List for FY 2026 In the September 1, 1987 final notice (52 FR 33143) concerning changes to the DRG classification system, we modified the GROUPER logic so that certain diagnoses included on the standard list of CCs would not be considered valid CCs in combination with a particular principal diagnosis. We created the CC Exclusions List for the following reasons: (1) to preclude coding of CCs for closely related conditions; (2) to preclude duplicative or inconsistent coding from being treated as CCs; and (3) to ensure that cases are appropriately classified between the complicated and uncomplicated DRGs in a pair. In the May 19, 1987 proposed notice (52 FR 18886) and the September 1, 1987 final notice (52 FR 33154), we explained that the excluded secondary diagnoses were established using the following five principles: • Chronic and acute manifestations of the same condition should not be considered CCs for one another lained that the excluded secondary diagnoses were established using the following five principles: • Chronic and acute manifestations of the same condition should not be considered CCs for one another; • Specific and nonspecific (that is, not otherwise specified (NOS)) diagnosis codes for the same condition should not be considered CCs for one another; • Codes for the same condition that cannot coexist, such as partial/total, unilateral/bilateral, obstructed/ unobstructed, and benign/malignant, should not be considered CCs for one another; • Codes for the same condition in anatomically proximal sites should not be considered CCs for one another; and • Closely related conditions should not be considered CCs for one another. The creation of the CC Exclusions List was a major project involving hundreds of codes. We have continued to review the remaining CCs to identify additional exclusions and to remove diagnoses from the master list that have been shown not to meet the definition of a CC. We refer readers to the FY 2014 IPPS/LTCH PPS final rule (78 FR 50541 through 50544) for detailed information regarding revisions that were made to VerDate Sep 2014 00:36 Aug 02, 2025 Jkt 265001 PO C. We refer readers to the FY 2014 IPPS/LTCH PPS final rule (78 FR 50541 through 50544) for detailed information regarding revisions that were made to VerDate Sep 2014 00:36 Aug 02, 2025 Jkt 265001 PO 00000 Frm 00095 Fmt 4701 Sfmt 4700 E:\FR\FM\04AUR2.SGM 04AUR2 2 S E L U R h t i w D O R P 4 4 1 S 7 W 9 K S D n o d n o m m a h k 36630 Federal Register / Vol. 90, No. 147 / Monday, August 4, 2025 / Rules and Regulations the CC and CC Exclusion Lists under the ICD–9–CM MS–DRGs. The ICD–10 MS–DRGs Version 42.1 CC Exclusion List is included as Appendix C in the ICD–10 MS–DRG Definitions Manual (available on the CMS website at: https://www.cms.gov/ medicare/payment/prospective- payment-systems/acute-inpatient-pps/ ms-drg-classifications-and-software) and includes three lists identified as Part 1, Part 2 and Part 3. Part 1 is the list of all diagnosis codes that are defined as a CC or MCC when reported as a secondary diagnosis. For all diagnosis codes on the list, a link is provided to a collection of diagnosis codes which, when reported as the principal diagnosis, would cause the CC or MCC diagnosis to be considered as a NonCC. Part 2 is the list of diagnosis codes designated as an MCC o ection of diagnosis codes which, when reported as the principal diagnosis, would cause the CC or MCC diagnosis to be considered as a NonCC. Part 2 is the list of diagnosis codes designated as an MCC only for patients discharged alive; otherwise, they are assigned as a NonCC. Part 3 is the list of diagnosis codes that are designated as a CC or MCC and included in the definition of the logic for the listed MS–DRGs. When reported as a secondary diagnosis and grouped to one of the listed MS–DRGs, the diagnosis is excluded from acting as a CC/MCC for severity in DRG assignment (that is, suppression logic). In the FY 2025 IPPS/LTCH PPS final rule (89 FR 69093), we stated that, because commenters had raised concerns regarding the principal diagnoses listed under Part 1 of Appendix C–CC Exclusions List in Principal Diagnosis Collection Lists 1379 and 1380 that exclude diagnosis codes N18.5 (Chronic kidney disease, stage 5) and N18.6 (End stage renal disease) from acting as a CC or MCC under the CC exclusion logic in accordance with the list of five principles established in 1987, we intended to perform a broad review of the conditions in these lists to determine if any modifications are wa e CC exclusion logic in accordance with the list of five principles established in 1987, we intended to perform a broad review of the conditions in these lists to determine if any modifications are warranted and to ensure they continue to be clinically appropriate. In the FY 2026 IPPS/LTCH PPS proposed rule (90 FR 18065), we noted that the Principal Diagnosis Collection List numbers may change because of updates that are made to the list annually through rulemaking. Therefore, while under Version 41.1 the principal diagnoses listed in Principal Diagnosis Collection List numbers 1379 and 1380 exclude diagnosis codes N18.5 and N18.6 from acting as a CC or MCC, under Version 42.1, the principal diagnoses listed in Principal Diagnosis Collection List numbers 1330 and 1331 exclude diagnosis codes N18.5 and N18.6 from acting as a CC or MCC. Accordingly, we reviewed the list of principal diagnosis codes listed in Principal Diagnosis Collection List numbers 1330 and 1331 that exclude diagnosis codes N18.5 and N18.6 from acting as a CC or MCC to assess clinical appropriateness. As discussed in the preamble of the FY 2026 IPPS/LTCH PPS proposed rule, the findings from our review indicated se codes N18.5 and N18.6 from acting as a CC or MCC to assess clinical appropriateness. As discussed in the preamble of the FY 2026 IPPS/LTCH PPS proposed rule, the findings from our review indicated several of the listed conditions, when reported as a principal diagnosis, are not applicable to exclude the designated N18.5 or N18.6 secondary CC/MCC diagnosis code under application of our five established principles finalized in the September 1, 1987 final notice (52 FR 33154) previously discussed. For example, diagnosis codes describing diabetes with other specified complications such as arthropathy, periodontal disease, or a foot ulcer, and diagnosis codes describing endometriosis, are not chronic and acute manifestations of, or closely related conditions to, chronic kidney disease, stage 5 (code N18.5) or end stage renal disease (code N18.6), nor are they describing codes for the same condition that cannot coexist. As previously described, the Principal Diagnosis Collection List numbers may change because of updates that are made to the list annually through rulemaking. We noted that, under proposed Version 43, the proposed Principal Diagnosis Collection List number to exclude diag s may change because of updates that are made to the list annually through rulemaking. We noted that, under proposed Version 43, the proposed Principal Diagnosis Collection List number to exclude diagnosis codes N18.5 and N18.6 from acting as a CC or MCC is 1335. We therefore proposed to remove the diagnosis codes listed in Table 6P.8a associated with the FY 2026 IPPS/LTCH PPS proposed rule and available via the CMS website at https://www.cms.gov/ medicare/payment/prospective- payment-systems/acute-inpatient-pps from Principal Diagnosis Collection List number 1335 under proposed Version 43. In the proposed rule (90 FR 18065), we stated that findings from our internal review also indicated that diagnosis code I12.9 (Hypertensive chronic kidney disease with stage 1 through stage 4 chronic kidney disease, or unspecified chronic kidney disease) is currently listed in Principal Diagnosis Collection List number 1331 and excludes diagnosis code N18.6 from acting as an MCC; however, diagnosis code I12.9 is not currently listed in the Principal Diagnosis Collection List number 1330 to exclude diagnosis code N18.5. We stated we believe it is clinically appropriate to add diagnosis code I12.9 code I12.9 is not currently listed in the Principal Diagnosis Collection List number 1330 to exclude diagnosis code N18.5. We stated we believe it is clinically appropriate to add diagnosis code I12.9 to Principal Diagnosis Collection List number 1335 under Version 43 because it would not be expected that a secondary diagnosis of N18.5 would be reported with a principal diagnosis of I12.9. As also discussed in the proposed rule, during our internal review we identified diagnosis code I13.0 (Hypertensive heart and chronic kidney disease with heart failure and stage 1 through stage 4 chronic kidney disease, or unspecified chronic kidney disease) and diagnosis code I13.10 (Hypertensive heart and chronic kidney disease without heart failure, with stage 1 through stage 4 chronic kidney disease, or unspecified chronic kidney disease) that we believe are appropriate to add to Principal Diagnosis Collection List number 1335 to exclude diagnosis codes N18.5 and N18.6 from acting as a CC/ MCC when reported because the conditions describe chronic kidney disease, stage 5 and end stage renal disease (ESRD) and it would not be clinically appropriate to have a principal diagnosis describing stage en reported because the conditions describe chronic kidney disease, stage 5 and end stage renal disease (ESRD) and it would not be clinically appropriate to have a principal diagnosis describing stage 1 through stage 4 chronic kidney disease reported with chronic kidney disease, stage 5 or ESRD. In summary, we proposed to add diagnosis code I12.9 to Principal Diagnosis Collection List number 1335 to exclude diagnosis code N18.5 from acting as a CC, proposed to remove the diagnosis codes listed in Table 6P.8a associated with the FY 2026 IPPS/LTCH PPS proposed rule and available via the CMS website at https://www.cms.gov/ medicare/payment/prospective- payment-systems/acute-inpatient-pps from Principal Diagnosis Collection List number 1335, and proposed to add diagnosis codes I13.0 and I13.10 to Principal Diagnosis Collection List number 1335 to exclude diagnosis codes N18.5 and N18.6 from acting as a CC/ MCC. Comment: Several commenters agreed with our proposals to add diagnosis code I12.9 to Principal Diagnosis Collection List number 1335 to exclude diagnosis code N18.5 from acting as a CC, remove the diagnosis codes listed in Table 6P.8a associated with the FY 2026 IPPS/LTCH PPS pr .9 to Principal Diagnosis Collection List number 1335 to exclude diagnosis code N18.5 from acting as a CC, remove the diagnosis codes listed in Table 6P.8a associated with the FY 2026 IPPS/LTCH PPS proposed rule and available via the CMS website at https:// www.cms.gov/medicare/payment/ prospective-payment-systems/acute- inpatient-pps from Principal Diagnosis Collection List number 1335, and to add diagnosis codes I13.0 and I13.10 to Principal Diagnosis Collection List number 1335 to exclude diagnosis codes N18.5 and N18.6 from acting as a CC/ MCC. However, a commenter disagreed with the proposed addition of diagnosis codes I13.0 and I13.10 to principal diagnosis collection list number 1335 to exclude diagnosis codes N18.5 and N18.6 from acting as a CC/MCC. According to the commenter, diagnosis codes I13.0 and I13.10 are combination codes and do not differentiate between a patient that is being admitted for congestive heart failure (CHF) or VerDate Sep 2014 00:36 Aug 02, 2025 Jkt 265001 PO 00000 Frm 00096 Fmt 4701 Sfmt 4700 E:\FR\FM\04AUR2.SGM 04AUR2 2 S E L U R h t i w D O R P 4 4 1 S 7 W 9 K S D n o d n o m m a h k Federal Register / Vol. 90, No. 147 / Monday, August 4, 2025 / Ru 1 PO 00000 Frm 00096 Fmt 4701 Sfmt 4700 E:\FR\FM\04AUR2.SGM 04AUR2 2 S E L U R h t i w D O R P 4 4 1 S 7 W 9 K S D n o d n o m m a h k Federal Register / Vol. 90, No. 147 / Monday, August 4, 2025 / Rules and Regulations 36631 chronic kidney disease (CKD). The commenter stated that the exclusion of codes N18.5 and N18.6 eliminates the complexity of these patients and the additional resources in management of their renal function when admitted for cardiogenic related conditions. Response: We appreciate the commenters’ support and feedback. In response to the commenter who disagreed with the proposal to exclude diagnosis codes N18.5 and N18.6 from acting as a CC/MCC when diagnosis code I13.0 or I13.10 is assigned as the principal diagnosis, we note that, as discussed in the FY 2026 IPPS/LTCH PPS proposed rule, the conditions described by diagnosis codes N18.5 and N18.6 describe chronic kidney disease, stage 5 and end stage renal disease (ESRD), respectively, and it would not be clinically appropriate to have a principal diagnosis describing stage 1 through stage 4 chronic kidney disease reported with chronic kidney disease, stage 5 or ESRD. We also note that in the ICD–10–CM Tabular L appropriate to have a principal diagnosis describing stage 1 through stage 4 chronic kidney disease reported with chronic kidney disease, stage 5 or ESRD. We also note that in the ICD–10–CM Tabular List of Diseases, there are instructional notes at diagnosis codes I13.0 and I13.10 that specifically direct the user to ‘‘Use additional code to identify the stage of chronic kidney disease (N18.1–N18.4, N18.9)’’. The instructional note does not list diagnosis codes N18.5 or N18.6 because they are not clinically applicable, as previously described. There is also another instructional note in the ICD–10–CM Tabular List of Diseases at diagnosis code I13.0 that specifically directs the user to ‘‘Use additional code to identify the type of heart failure (I50.-)’’ because diagnosis code I13.0 describes ‘‘with heart failure’’ (while diagnosis code I13.10 describes ‘‘without heart failure’’). With respect to the commenter’s statement that the combination codes (I13.0 and I13.10) do not differentiate between a patient that is being admitted for CHF or CKD, we note that because these codes are classified as combination codes, they include both a CHF and CKD component. Therefore, the appropriate ate between a patient that is being admitted for CHF or CKD, we note that because these codes are classified as combination codes, they include both a CHF and CKD component. Therefore, the appropriate combination code (I13.0 or I13.10) is assigned on a claim to accurately reflect the conditions documented, and any additional codes would be assigned based on the Tabular instructions. After consideration of the public comments we received, we are finalizing our proposals to add diagnosis code I12.9 to Principal Diagnosis Collection List number 1335 to exclude diagnosis code N18.5 from acting as a CC, remove the diagnosis codes listed in Table 6P.8a associated with this FY 2026 IPPS/LTCH PPS final rule and available via the CMS website at https://www.cms.gov/medicare/ payment/prospective-payment-systems/ acute-inpatient-pps from Principal Diagnosis Collection List number 1335, and to add diagnosis codes I13.0 and I13.10 to Principal Diagnosis Collection List number 1335 to exclude diagnosis codes N18.5 and N18.6 from acting as a CC/MCC, effective October 1, 2025 for FY 2026. We intend to continue this type of internal review to ensure all the other Principal Diagnosis Collection lists is codes N18.5 and N18.6 from acting as a CC/MCC, effective October 1, 2025 for FY 2026. We intend to continue this type of internal review to ensure all the other Principal Diagnosis Collection lists reflect the appropriate codes in connection with the CC/MCC secondary diagnosis code that is excluded from acting as a CC/MCC. Any proposed changes to the lists will be discussed in future rulemaking. To inform future rulemaking, feedback and other suggestions may be submitted by October 20, 2025, and directed to MEARISTM at: https://mearis.cms.gov/ public/home. As discussed in the proposed rule (90 FR 18066 through 18067), we also performed an internal review of the diagnoses listed in Appendix C—Part 2: Codes That are Major CC Only if Patient Discharged Alive. The diagnoses listed in Part 2 of Appendix C are assigned as an MCC only for patients discharged alive, otherwise the codes are assigned as a NonCC. The diagnoses listed in Part 2 in Version 42.1 are shown in the following table. In developing Appendix C—Part 2: Codes That are Major CC Only if Patient Discharged Alive (72 FR 47161 through 47168), the claims data were evaluated to determine if there was a difference in resource In developing Appendix C—Part 2: Codes That are Major CC Only if Patient Discharged Alive (72 FR 47161 through 47168), the claims data were evaluated to determine if there was a difference in resource use between cases in which the patient was discharged alive or died during the hospital stay. For most secondary diagnoses, the charges were similar for the two groups. However, there were a few diagnoses where the difference in charges and clinical considerations supported a different CC designation for patients who died before discharge. For these diagnoses, the patients who were discharged alive required significantly more hospital resources than the patients who died. Therefore, when reported as a secondary diagnosis, each of the diagnoses is designated as an MCC in cases where the patient is discharged alive and as a NonCC in cases where the patient died. As discussed in the preamble of the FY 2026 IPPS/LTCH PPS proposed rule, we analyzed claims data from the September 2024 update of the FY 2024 MedPAR file for the diagnoses currently listed in Appendix C—Part 2. Our findings are reflected in the following table: 2 S E L U R h t i w D O R P 4 4 1 S 7 W 9 K S D n o d n o m m a h k the FY 2024 MedPAR file for the diagnoses currently listed in Appendix C—Part 2. Our findings are reflected in the following table: 2 S E L U R h t i w D O R P 4 4 1 S 7 W 9 K S D n o d n o m m a h k VerDate Sep 2014 00:36 Aug 02, 2025 Jkt 265001 PO 00000 Frm 00097 Fmt 4701 Sfmt 4700 E:\FR\FM\04AUR2.SGM 04AUR2 / > H P G 2014 00:36 Aug 02, 2025 Jkt 265001 PO 00000 Frm 00098 Fmt 4701 Sfmt 4700 E:\FR\FM\04AUR2.SGM 04AUR2 2 S E L U R h t i w D O R P 4 4 1 S 7 W 9 K S D n o d n o m m a h k / > H P G H P G 2014 00:36 Aug 02, 2025 Jkt 265001 PO 00000 Frm 00099 Fmt 4701 Sfmt 4700 E:\FR\FM\04AUR2.SGM 04AUR2 2 S E L U R h t i w D O R P 4 4 1 S 7 W 9 K S D n o d n o m m a h k 36634 Federal Register / Vol. 90, No. 147 / Monday, August 4, 2025 / Rules and Regulations will now be better equipped to more specifically document and report, which will be very useful for tracking patients diagnosed with these rare conditions and help to improve patient outcomes. Response: We appreciate the commenters’ support and feedback. Comment: A commenter (the manufacturer) requested that CMS assign procedure code X2H13XB (Insertion of temporary phrenic nerve/ diaphragm stimulation electrodes into superior vena upport and feedback. Comment: A commenter (the manufacturer) requested that CMS assign procedure code X2H13XB (Insertion of temporary phrenic nerve/ diaphragm stimulation electrodes into superior vena cava, percutaneous approach, new technology group 11) that can be reported to describe use of the AeroPace® System, to MS–DRG 003 (ECMO or Tracheostomy with MV >96 Hours or Principal Diagnosis Except Face, Mouth and Neck with Major O.R. Procedures), MS–DRG 004 (Tracheostomy with MV >96 Hours or Principal Diagnosis Except Face, Mouth and Neck without Major O.R. Procedures), MS–DRG 207 (Respiratory System Diagnosis with Ventilator Support >96 Hours), and MS–DRG 870 (Septicemia or Severe Sepsis with MV >96 Hours). The commenter stated that based on the predecessor code, CMS assigned this new procedure code to MS–DRG 264 (Other Circulatory System O.R. Procedures) under MDC 05 (Diseases and Disorders of the Circulatory System) and to MS–DRGs 981, 982, and 983 (Extensive O.R. Procedures Unrelated to Principal Diagnosis with MCC, with CC, and without CC/MCC, respectively) as reflected in Table 6B.—New Procedure Codes. The commenter also stated that it understands these are preliminary MS–DRG ed to Principal Diagnosis with MCC, with CC, and without CC/MCC, respectively) as reflected in Table 6B.—New Procedure Codes. The commenter also stated that it understands these are preliminary MS–DRG assignments and do not limit the MS–DRGs to which a case may group. According to the commenter, because the Food and Drug Administration (FDA) indication for use of the technology is in patients ages 18 years or older on mechanical ventilation > 96 hours and who have not weaned, procedure code X2H13XB will be reported on claims that also report procedure code 5A1955Z (Respiratory ventilation, greater than 96 consecutive hours). The commenter stated that the data described in the new technology add-on payment application demonstrate that over 60 percent of beneficiaries who have received greater than 96 hours of mechanical ventilation are assigned to MS–DRGs 003, 004, 207, and 870. Response: We thank the commenter for their feedback. We note that procedure code X2H13XB may be reported to describe the use of the AeroPace® System and was finalized following the September 10–11, 2024 ICD–10 Coordination and Maintenance Committee meeting. The materials for the discussion related to this to escribe the use of the AeroPace® System and was finalized following the September 10–11, 2024 ICD–10 Coordination and Maintenance Committee meeting. The materials for the discussion related to this topic are located on the CMS website at: https:// www.cms.gov/medicare/coding-billing/ icd-10-codes/icd-10-coordination- maintenance-committee-materials. Under our established process, we reviewed the predecessor code and MS– DRG assignment most closely associated with the new procedure code. We note that because the procedure code that identifies use of the AeroPace® System is describing temporary transvenous diaphragm activation via stimulation of the phrenic nerve(s), the predecessor code is 02HV3YZ (Insertion of other device into superior vena cava, percutaneous approach), which is designated as an O.R. procedure and assigned to MS–DRG 264 under MDC 05. The logic for case assignment to Pre- MDC MS–DRG 003 (ECMO or Tracheostomy with MV >96 Hours or Principal Diagnosis Except Face, Mouth and Neck with Major O.R. Procedures) requires that either a procedure code describing extracorporeal membrane oxygenation (ECMO) or a procedure code describing a tracheostomy procedure with procedure c nd Neck with Major O.R. Procedures) requires that either a procedure code describing extracorporeal membrane oxygenation (ECMO) or a procedure code describing a tracheostomy procedure with procedure code 5A1955Z is reported with any principal diagnosis that is not assigned to MS– DRGs 011, 012, or 013 (Tracheostomy for Face, Mouth and Neck Diagnoses or Laryngectomy with MCC, with CC, and without CC/MCC, respectively) and with a procedure code that is designated as a major operating room (O.R.) procedure. Accordingly, the appropriate MS–DRG assignment to Pre-MDC MS– DRG 003 or to Pre-MDC MS–DRG 004 would be determined when procedure code X2H13XB is reported on a claim with procedure codes that satisfy the logic for case assignment to the respective Pre-MDC MS–DRG. We note that when procedure code X2H13XB is reported on a claim with procedure code 5A1955Z and a principal diagnosis from MDC 04 (Diseases and Disorders of the Respiratory System), the MS–DRG assignment will result in MS–DRG 207 (Respiratory System Diagnosis with Ventilator Support >96 Hours). Specifically, the logic for case assignment to MS–DRG 207 requires any principal diagnosis from MDC 04 with procedure code 5A1955Z 207 (Respiratory System Diagnosis with Ventilator Support >96 Hours). Specifically, the logic for case assignment to MS–DRG 207 requires any principal diagnosis from MDC 04 with procedure code 5A1955Z. When procedure code X2H13XB is reported on a claim with procedure code 5A1955Z and a principal diagnosis describing septicemia, the MS–DRG assignment will result in MS–DRG 870 (Septicemia or Severe Sepsis with MV >96 Hours). In those scenarios, it is the respiratory ventilation procedure code and the principal diagnosis that will determine the MS–DRG assignment. We refer the reader to the ICD–10 MS–DRG Definitions Manual, Version 43 available in association with this final rule on the CMS website at: https:// www.cms.gov/medicare/payment/ prospective-payment-systems/acute- inpatient-pps/ms-drg-classifications- and-software for complete documentation of the GROUPER logic. Comment: Commenters expressed support for the seven new diagnosis codes describing various types of hyperoxaluria and the proposed CC severity level designation for three of the new codes as reflected in Table 6A.—New Diagnosis Codes that was made publicly available in association with the proposed rule. However, the the proposed CC severity level designation for three of the new codes as reflected in Table 6A.—New Diagnosis Codes that was made publicly available in association with the proposed rule. However, the commenters stated that the remaining four new codes were not proposed to be designated as CCs and recommended that CMS reconsider the proposed designations. A commenter stated that each hyperoxaluria type involves the excessive excretion of oxalate in urine that can lead to kidney stones and therefore, all seven codes should be considered for a CC designation. Response: We appreciate the commenters’ feedback. The seven new diagnosis codes describing various types of hyperoxaluria and their proposed severity level designation are shown in the following table: 2 S E L U R h t i w D O R P 4 4 1 S 7 W 9 K S D n o d n o m m a h k VerDate Sep 2014 00:36 Aug 02, 2025 Jkt 265001 PO 00000 Frm 00100 Fmt 4701 Sfmt 4700 E:\FR\FM\04AUR2.SGM 04AUR2 Federal Register / Vol. 90, No. 147 / Monday, August 4, 2025 / Rules and Regulations 36635 Consistent with our established process, we identified diagnosis code E72.53 (Primary hyperoxaluria) which is designated as a CC, as the predecessor code for the t , 2025 / Rules and Regulations 36635 Consistent with our established process, we identified diagnosis code E72.53 (Primary hyperoxaluria) which is designated as a CC, as the predecessor code for the three diagnosis codes describing a specified type of primary hyperoxaluria (E72.530, E72.538, and E72.539). We identified diagnosis code R82.992 (Hyperoxaluria) which is designated as a NonCC, as the predecessor code for the four diagnosis codes proposed to be designated as NonCC (E72.540, E72.541, E72.548, and E72.549). We also reviewed the FY 2024 Impact on Resource Use file available via the CMS website at: https:// www.cms.gov/medicare/payment/ prospective-payment-systems/acute- inpatient-pps/ms-drg-classifications- and-software for the predecessor codes and the C1, C2, and C3 counts reflected in the following table. We refer readers to the FY 2008 IPPS/LTCH PPS final rule (72 FR 47159) for a complete discussion of our historical approach to mathematically evaluate the extent to which the presence of an ICD–10–CM code as a secondary diagnosis resulted in increased hospital resource use, and a more detailed explanation of the columns in the table. The table shows that for diagnosis c he presence of an ICD–10–CM code as a secondary diagnosis resulted in increased hospital resource use, and a more detailed explanation of the columns in the table. The table shows that for diagnosis code E72.53 the C1 finding is 1.19 and the C2 finding is 2.90, and for diagnosis code R82.992, the C1 finding is 1.06 and the C2 finding is 2.10. A higher value in the C1 (or C2 and C3) field suggests more resource usage is associated with the diagnosis and an increased likelihood that it is more like a CC or MCC than a NonCC. Thus, a value close to 2.0 suggests the condition is more like a CC than a NonCC but not as significant in resource usage as an MCC. A value close to 3.0 suggests the condition is expected to consume resources more similar to an MCC than a CC or NonCC. The data suggest that when diagnosis code E72.53 is reported as a secondary diagnosis the resources involved in caring for a patient diagnosed with primary hyperoxaluria are aligned with a CC and may also consume resources more similar to an MCC. The data suggest that when diagnosis code R82.992 is reported as a secondary diagnosis that the resources involved in caring for a patient diagnosed with hyperoxaluria are ces more similar to an MCC. The data suggest that when diagnosis code R82.992 is reported as a secondary diagnosis that the resources involved in caring for a patient diagnosed with hyperoxaluria are more aligned with a NonCC. Comment: Several commenters indicated their support for the initiative to refine ICD–10 coding for immune complex membranoproliferative glomerulonephritis (IC–MPGN), though they also expressed concerns regarding the finalized new diagnosis codes. Specifically, a commenter stated that historically, IC–MPGN and C3 glomerulonephritis (C3G) (code N00.A, acute nephritic syndrome with C3 glomerulonephritis) were two distinct but related conditions, and based on that understanding, the proposed codes make sense. However, the commenter reported that new evidence has emerged suggesting that IC–MPGN and C3G may actually be a spectrum of the same condition and some patients can present with IC–MPGN initially and a repeat kidney biopsy might show C3G or the opposite (that is, some patients can present with C3G initially and a repeat kidney biopsy might show IC–MPGN). According to the commenter, the true distinction between these two diagnoses is currently uncertain. The , some patients can present with C3G initially and a repeat kidney biopsy might show IC–MPGN). According to the commenter, the true distinction between these two diagnoses is currently uncertain. The commenter suggested that new codes be developed to address circumstances where the distinction between IC–MPGN and C3G cannot be determined. Other commenters stated similar concerns and suggested that reconsideration be given to the implementation of these new codes, including postponement, until treatment pathways for these conditions become more distinctly defined. Response: We appreciate the commenters’ feedback. We note that the Centers for Disease Control and Prevention’s National Center for Health Statistics (CDC/NCHS) has lead responsibility for updates and maintenance to the ICD–10–CM diagnosis code set and the code proposal for Immune Complex-mediated Membranoproliferative Glomerulonephritis (IC–MPGN) was discussed at the September 10–11, 2024 ICD–10 Coordination and Maintenance Committee meeting. The materials for the discussion relating to this topic are located on the CDC website at: https:// www.cdc.gov/nchs/icd/icd-10- maintenance/meetings.html. The finalized diagnosis co ommittee meeting. The materials for the discussion relating to this topic are located on the CDC website at: https:// www.cdc.gov/nchs/icd/icd-10- maintenance/meetings.html. The finalized diagnosis codes describing IC–MPGN are: / > H P G 2014 00:36 Aug 02, 2025 Jkt 265001 PO 00000 Frm 00101 Fmt 4701 Sfmt 4700 E:\FR\FM\04AUR2.SGM 04AUR2 / > H P G 2014 00:36 Aug 02, 2025 Jkt 265001 PO 00000 Frm 00102 Fmt 4701 Sfmt 4700 E:\FR\FM\04AUR2.SGM 04AUR2 2 S E L U R h t i w D O R P 4 4 1 S 7 W 9 K S D n o d n o m m a h k / > H P G 2014 00:36 Aug 02, 2025 Jkt 265001 PO 00000 Frm 00103 Fmt 4701 Sfmt 4700 E:\FR\FM\04AUR2.SGM 04AUR2 2 S E L U R h t i w D O R P 4 4 1 S 7 W 9 K S D n o d n o m m a h k 36638 Federal Register / Vol. 90, No. 147 / Monday, August 4, 2025 / Rules and Regulations A second example occurs when the difference between the average costs for two surgical classes is very small. We have found that small differences generally do not warrant reordering of the hierarchy because, as a result of reassigning cases on the basis of the hierarchy change, the average costs are likely to shift such that the higher- ordered surgical class has lower average costs than the class ordered below esult of reassigning cases on the basis of the hierarchy change, the average costs are likely to shift such that the higher- ordered surgical class has lower average costs than the class ordered below it. In the FY 2025 IPPS/LTCH PPS final rule (89 FR 69100), we stated our intent to consider if the development of evaluation criteria would be useful for future proposed modifications to the surgical hierarchy for MS–DRGs that have meaningful changes to the clinical logic. We are continuing to examine what factors should be taken into account as we consider any future proposals. We welcome feedback and other suggestions to be submitted via MEARISTM at https://mearis.cms.gov/ public/home by October 20, 2025. Based on the changes that we proposed to make for FY 2026, as discussed in section II.C. of the preamble of the FY 2026 IPPS/LTCH PPS proposed rule and this final rule, we proposed to modify the existing surgical hierarchy for FY 2026 as illustrated in the following tables. We noted in the proposed rule that because the current methodology involves weighing the average costs of each MS– DRG in the surgical class by frequency (that is, by the number of cases in the MS–DRG) to determ the proposed rule that because the current methodology involves weighing the average costs of each MS– DRG in the surgical class by frequency (that is, by the number of cases in the MS–DRG) to determine average resource consumption for the surgical class, that the surgical hierarchy of other MS– DRGs in the MDC may need to be adjusted based on the MS–DRG classification changes that are proposed to ensure that the average weighted cost for each base MS–DRG in each MDC are monotonically decreasing. We further noted that the proposed Version 43 surgical hierarchy as illustrated in the following tables may be subject to further modifications based on the finalized changes to the MS–DRG classifications for FY 2026. BILLING CODE 4120–01–P 2 S E L U R h t i w D O R P 4 4 1 S 7 W 9 K S D n o d n o m m a h k VerDate Sep 2014 00:36 Aug 02, 2025 Jkt 265001 PO 00000 Frm 00104 Fmt 4701 Sfmt 4725 E:\FR\FM\04AUR2.SGM 04AUR2 / > H P G 2014 00:36 Aug 02, 2025 Jkt 265001 PO 00000 Frm 00105 Fmt 4701 Sfmt 4700 E:\FR\FM\04AUR2.SGM 04AUR2 / > H P G 2014 00:36 Aug 02, 2025 Jkt 265001 PO 00000 Frm 00106 Fmt 4701 Sfmt 4725 E:\FR\FM\04AUR2.SGM 04AUR2 / > H P G 2014 00:36 Aug 02, 2025 Jkt 265001 PO 00000 Fr t 4700 E:\FR\FM\04AUR2.SGM 04AUR2 / > H P G 2014 00:36 Aug 02, 2025 Jkt 265001 PO 00000 Frm 00106 Fmt 4701 Sfmt 4725 E:\FR\FM\04AUR2.SGM 04AUR2 / > H P G 2014 00:36 Aug 02, 2025 Jkt 265001 PO 00000 Frm 00107 Fmt 4701 Sfmt 4700 E:\FR\FM\04AUR2.SGM 04AUR2 2 S E L U R h t i w D O R P 4 4 1 S 7 W 9 K S D n o d n o m m a h k / > H P G 2014 00:36 Aug 02, 2025 Jkt 265001 PO 00000 Frm 00108 Fmt 4701 Sfmt 4700 E:\FR\FM\04AUR2.SGM 04AUR2 Federal Register / Vol. 90, No. 147 / Monday, August 4, 2025 / Rules and Regulations 36643 2 S E L U R h t i w D O R P 4 4 1 S 7 W 9 K S D n o d n o m m a h k VerDate Sep 2014 00:36 Aug 02, 2025 Jkt 265001 PO 00000 Frm 00109 Fmt 4701 Sfmt 4725 E:\FR\FM\04AUR2.SGM 04AUR2 / > H P G 2014 00:36 Aug 02, 2025 Jkt 265001 PO 00000 Frm 00110 Fmt 4701 Sfmt 4725 E:\FR\FM\04AUR2.SGM 04AUR2 / > H P G 2014 00:36 Aug 02, 2025 Jkt 265001 PO 00000 Frm 00111 Fmt 4701 Sfmt 4700 E:\FR\FM\04AUR2.SGM 04AUR2 2 S E L U R h t i w D O R P 4 4 1 S 7 W 9 K S D n o d n o m m a h k / > H P G 2014 00:36 Aug 02, 2025 Jkt 265001 PO 00000 Frm 00112 Fmt 4701 Sfmt 4700 E:\FR\FM\04AUR2.SGM 04AUR2 2 S E L U R h t i w D O R P 4 4 1 S 7 W 9 K S D n o d n o m m a h k Federal Register / Vol. 90, No. 2014 00:36 Aug 02, 2025 Jkt 265001 PO 00000 Frm 00112 Fmt 4701 Sfmt 4700 E:\FR\FM\04AUR2.SGM 04AUR2 2 S E L U R h t i w D O R P 4 4 1 S 7 W 9 K S D n o d n o m m a h k Federal Register / Vol. 90, No. 147 / Monday, August 4, 2025 / Rules and Regulations 36647 Codes, there were procedure codes proposed for the Spring 2025 ICD–10 Coordination and Maintenance Committee Update that were not finalized in time to include in the proposed rule and are identified with an asterisk. We refer the reader to Table 6B.—New Procedure Codes associated with this final rule and available on the CMS website at: https://www.cms.gov/ medicare/payment/prospective- payment-systems/acute-inpatient-pps for the detailed list of these 142 new procedure codes finalized for FY 2026. We also note, as reflected in Table 6C.—Invalid Diagnosis Codes and in Table 6D.—Invalid Procedure Codes, there are a total of 28 diagnosis codes and 27 procedure codes that will become invalid effective October 1, 2025. Based on these code updates, effective October 1, 2025, there are a total of 74,719 ICD–10–CM diagnosis codes and 79,115 ICD–10–PCS procedure codes for FY 2026 as shown in the following table. As stated previously, code updates, effective October 1, 2025, there are a total of 74,719 ICD–10–CM diagnosis codes and 79,115 ICD–10–PCS procedure codes for FY 2026 as shown in the following table. As stated previously, the public is provided the opportunity to comment on any requests for new diagnosis or procedure codes discussed during the ICD–10 Coordination and Maintenance Committee meeting. The code titles are adopted as part of the ICD–10 Coordination and Maintenance Committee process. Thus, although we publish the code titles in the IPPS proposed and final rules, they are not subject to comment in the proposed or final rules. 12. Replaced Devices Offered Without Cost or With a Credit a. Background In the FY 2008 IPPS final rule with comment period (72 FR 47246 through 47251), we discussed the topic of Medicare payment for devices that are replaced without cost or where credit for a replaced device is furnished to the hospital. We implemented a policy to reduce a hospital’s IPPS payment for certain MS–DRGs where the implantation of a device that subsequently failed or was recalled determined the base MS–DRG assignment. At that time, we specified that we will reduce a hospital’s IPPS payment for MS–DRGs where the implantation of a device that subsequently failed or was recalled determined the base MS–DRG assignment. At that time, we specified that we will reduce a hospital’s IPPS payment for those MS–DRGs where the hospital received a credit for a replaced device equal to 50 percent or more of the cost of the device. In the FY 2012 IPPS/LTCH PPS final rule (76 FR 51556 through 51557), we clarified this policy to state that the policy applies if the hospital received a credit equal to 50 percent or more of the cost of the replacement device and issued instructions to hospitals accordingly. b. Changes for FY 2026 As discussed in section II.C.3a. of the preamble of the FY 2026 IPPS/LTCH PPS proposed rule and this final rule, for FY 2026, under MDC 01, we proposed to add procedure code combinations that describe the insertion of multiple or single array generators and the insertion of neurostimulator lead into the brain or cerebral ventricle and the procedure code combinations that describe the insertion of a neurostimulator generator into the skull and the insertion of a neurostimulator lead into the brain to a new ‘‘intracranial neurostimulator implant’’ logic list in MS–DRG t describe the insertion of a neurostimulator generator into the skull and the insertion of a neurostimulator lead into the brain to a new ‘‘intracranial neurostimulator implant’’ logic list in MS–DRGs 020, 021, and 022. A subset of the procedures currently assigned to MS–DRGs 023 and 024 were proposed for reassignment to MS–DRGs 020, 021, and 022. We also proposed to revise the title of MS–DRG 020 from ‘‘Intracranial Vascular Procedures with Principal Diagnosis Hemorrhage with MCC’’ to ‘‘Intracranial Vascular Procedures with Principal Diagnosis Hemorrhage or Intracranial Neurostimulator Implant with MCC’’; revise the title of MS–DRG 021 from ‘‘Intracranial Vascular Procedures with Principal Diagnosis Hemorrhage with CC’’ to ‘‘Intracranial Vascular Procedures with Principal Diagnosis Hemorrhage or Intracranial Neurostimulator Implant with CC’’; revise the title of MS–DRG 022 from ‘‘Intracranial Vascular Procedures with Principal Diagnosis Hemorrhage without CC/MCC’’ to ‘‘Intracranial Vascular Procedures with Principal Diagnosis Hemorrhage or Intracranial Neurostimulator Implant without CC/ MCC’’; revise the title of MS–DRG 023 from ‘‘Craniotomy with Major Device Implant or Acute Co ascular Procedures with Principal Diagnosis Hemorrhage or Intracranial Neurostimulator Implant without CC/ MCC’’; revise the title of MS–DRG 023 from ‘‘Craniotomy with Major Device Implant or Acute Complex CNS Principal Diagnosis with MCC or Chemotherapy Implant or Epilepsy with Neurostimulator’’ to ‘‘Craniotomy with Acute Complex CNS Principal Diagnosis with MCC or Antineoplastic Implant’’; and revise the title of MS–DRG 024 from ‘‘Craniotomy with Major Device Implant or Acute Complex CNS Principal Diagnosis without MCC’’ to ‘‘Craniotomy with Acute Complex CNS Principal Diagnosis without MCC’’. Additionally, as discussed in section II.C.4. of the preamble of the FY 2026 IPPS/LTCH PPS proposed rule and this final rule, for FY 2026, under MDC 05, we proposed new MS–DRG 209 (Complex Aortic Arch Procedures) and new MS–DRG 213 (Endovascular Abdominal Aorta with Iliac Branch Procedures). A subset of the procedures currently assigned to MS–DRGs 216, 217, 218, 219, 220, and 221 were proposed for assignment to proposed new MS–DRG 209 and a subset of the procedures currently assigned to MS– DRGs 268, 269, 270, 271, and 272 were proposed for assignment to proposed new MS–DRG 213. As stated i for assignment to proposed new MS–DRG 209 and a subset of the procedures currently assigned to MS– DRGs 268, 269, 270, 271, and 272 were proposed for assignment to proposed new MS–DRG 213. As stated in the FY 2016 IPPS/LTCH PPS proposed rule (80 FR 24409), we generally map new MS–DRGs onto the list when they are formed from procedures previously assigned to MS– DRGs that are already on the list. Currently, MS–DRGs 023, 024, 216, 217, 218, 219, 220, 221, 268, 269, 270, 271, and 272 are on the list of MS–DRGs subject to the policy for payment under the IPPS for replaced devices offered without cost or with a credit as shown in the following table. Therefore, we proposed that if the applicable proposed MS–DRG changes are finalized, we also would add MS–DRGs 020, 021, and 022 and proposed new MS–DRGs 209 and 213 to the list of MS–DRGs subject to the policy for payment under the IPPS for replaced devices offered without cost or with a credit and make conforming changes to the titles of MS– DRGs 023 and 024 in the list of MS– DRGs subject to the policy as reflected in the following table. We also proposed to continue to include the existing MS– DRGs currently subject to the policy. As di DRGs 023 and 024 in the list of MS– DRGs subject to the policy as reflected in the following table. We also proposed to continue to include the existing MS– DRGs currently subject to the policy. As discussed in section II.C.3a of the preamble of this FY 2026 IPPS/LTCH PPS final rule, we are not finalizing our proposal to add procedure code combinations that describe the insertion of multiple or single array generators and the insertion of neurostimulator lead into the brain or cerebral ventricle and the procedure code combinations VerDate Sep 2014 00:36 Aug 02, 2025 Jkt 265001 PO 00000 Frm 00113 Fmt 4701 Sfmt 4700 E:\FR\FM\04AUR2.SGM 04AUR2 2 S E L U R h t i w D O R P 4 4 1 S 7 W 9 K S D n o d n o m m a h k / > H P G 2014 00:36 Aug 02, 2025 Jkt 265001 PO 00000 Frm 00114 Fmt 4701 Sfmt 4700 E:\FR\FM\04AUR2.SGM 04AUR2 Federal Register / Vol. 90, No. 147 / Monday, August 4, 2025 / Rules and Regulations 36649 BILLING CODE 4120–01–C The final list of MS–DRGs subject to the IPPS policy for replaced devices offered without cost or with a credit will be issued to providers in the form of a Change Request (CR). 13. Out of Scope Public Comments Received We received public comments on MS–DRG r placed devices offered without cost or with a credit will be issued to providers in the form of a Change Request (CR). 13. Out of Scope Public Comments Received We received public comments on MS–DRG related issues that were outside the scope of the proposals included in the FY 2026 IPPS/LTCH PPS proposed rule. Because we consider these public comments to be outside the scope of the proposed rule, we are not addressing them in this final rule. As stated in section II.C.1.b. of the preamble of this final rule, we encourage individuals with comments about MS–DRG classifications to submit these comments no later than October 20, 2025, via MEARISTM at: https:// mearis.cms.gov/public/home, so that they can be considered for possible inclusion in the annual proposed rule. We will consider these public comments for possible proposals in future rulemaking as part of our annual review process. VerDate Sep 2014 00:36 Aug 02, 2025 Jkt 265001 PO 00000 Frm 00115 Fmt 4701 Sfmt 4700 E:\FR\FM\04AUR2.SGM 04AUR2 / > H P G 2014 00:36 Aug 02, 2025 Jkt 265001 PO 00000 Frm 00116 Fmt 4701 Sfmt 4700 E:\FR\FM\04AUR2.SGM 04AUR2 2 S E L U R h t i w D O R P 4 4 1 S 7 W 9 K S D n o d n o m m a h k Federal Regis M 04AUR2 / > H P G 2014 00:36 Aug 02, 2025 Jkt 265001 PO 00000 Frm 00116 Fmt 4701 Sfmt 4700 E:\FR\FM\04AUR2.SGM 04AUR2 2 S E L U R h t i w D O R P 4 4 1 S 7 W 9 K S D n o d n o m m a h k Federal Register / Vol. 90, No. 147 / Monday, August 4, 2025 / Rules and Regulations 36651 at the time of inpatient admission) in the POA field. Under current payment policy, the presence of specific HAC codes, as indicated by the POA field values, can generate a lower payment for the claim. Specifically, if the particular condition is present on admission (that is, a ‘‘Y’’ indicator is associated with the diagnosis on the claim), it is not a HAC, and the hospital is paid for the higher severity (and, therefore, the higher weighted MS–DRG). If the particular condition is not present on admission (that is, an ‘‘N’’ indicator is associated with the diagnosis on the claim) and there are no other complicating conditions, the DRG GROUPER assigns the claim to a lower severity (and, therefore, the lower weighted MS–DRG) as a penalty for allowing a Medicare inpatient to contract a HAC. While the POA reporting meets policy goals of encouraging quality care and generates program savings, it presents an issue ted MS–DRG) as a penalty for allowing a Medicare inpatient to contract a HAC. While the POA reporting meets policy goals of encouraging quality care and generates program savings, it presents an issue for the relative weight-setting process. Because cases identified as HACs are likely to be more complex than similar cases that are not identified as HACs, the charges associated with HAC cases are likely to be higher as well. Therefore, if the higher charges of these HAC claims are grouped into lower severity MS–DRGs prior to the relative weight-setting process, the relative weights of these particular MS–DRGs would become artificially inflated, potentially skewing the relative weights. In addition, we want to protect the integrity of the budget neutrality process by ensuring that, in estimating payments, no increase to the standardized amount occurs as a result of lower overall payments in a previous year that stem from using weights and case-mix that are based on lower severity MS–DRG assignments. If this would occur, the anticipated cost savings from the HAC policy would be lost. To avoid these problems, we reset the POA indicator field to ‘‘Y’’ only for relative weight-setting pu assignments. If this would occur, the anticipated cost savings from the HAC policy would be lost. To avoid these problems, we reset the POA indicator field to ‘‘Y’’ only for relative weight-setting purposes for all claims that otherwise have an ‘‘N’’ or a ‘‘U’’ in the POA field. This resetting ‘‘forced’’ the more costly HAC claims into the higher severity MS–DRGs as appropriate, and the relative weights calculated for each MS–DRG more closely reflect the true costs of those cases. In addition, in the FY 2013 IPPS/ LTCH PPS final rule, for FY 2013 and subsequent fiscal years, we finalized a policy to treat hospitals that participate in the Bundled Payments for Care Improvement (BPCI) initiative the same as prior fiscal years for the IPPS payment modeling and ratesetting process without regard to hospitals’ participation within these bundled payment models (77 FR 53341 through 53343). Specifically, because acute care hospitals participating in the BPCI Initiative still receive IPPS payments under section 1886(d) of the Act, we include all applicable data from these subsection (d) hospitals in our IPPS payment modeling and ratesetting calculations as if the hospitals were not particip nts under section 1886(d) of the Act, we include all applicable data from these subsection (d) hospitals in our IPPS payment modeling and ratesetting calculations as if the hospitals were not participating in those models under the BPCI initiative. We refer readers to the FY 2013 IPPS/LTCH PPS final rule for a complete discussion on our final policy for the treatment of hospitals participating in the BPCI initiative in our ratesetting process. For additional information on the BPCI initiative, we refer readers to the CMS’ Center for Medicare and Medicaid Innovation’s website at https://innovation.cms.gov/ initiatives/Bundled-Payments/ index.html and to section IV.H.4. of the preamble of the FY 2013 IPPS/LTCH PPS final rule (77 FR 53341 through 53343). The participation of hospitals in the BPCI initiative concluded on September 30, 2018. The participation of hospitals in the BPCI Advanced model started on October 1, 2018. The BPCI Advanced model, tested under the authority of section 1115A of the Act, is comprised of a single payment and risk track, which bundles payments for multiple services that beneficiaries receive during a Clinical Episode. Acute care hospitals may participate 15A of the Act, is comprised of a single payment and risk track, which bundles payments for multiple services that beneficiaries receive during a Clinical Episode. Acute care hospitals may participate in BPCI Advanced in one of two capacities: as a model Participant or as a downstream Episode Initiator. Regardless of the capacity in which they participate in the BPCI Advanced model, participating acute care hospitals will continue to receive IPPS payments under section 1886(d) of the Act. Acute care hospitals that are Participants also assume financial and quality performance accountability for Clinical Episodes in the form of a reconciliation payment. For additional information on the BPCI Advanced model, we refer readers to the BPCI Advanced web page on the CMS Center for Medicare and Medicaid Innovation’s website at https:// innovation.cms.gov/initiatives/bpci- advanced. Consistent with our policy for FY 2025, and consistent with how we have treated hospitals that participated in the BPCI Initiative, for FY 2026, we continue to believe it is appropriate to include all applicable data from the subsection (d) hospitals participating in the BPCI Advanced model in our IPPS payment m e BPCI Initiative, for FY 2026, we continue to believe it is appropriate to include all applicable data from the subsection (d) hospitals participating in the BPCI Advanced model in our IPPS payment modeling and ratesetting calculations because, as noted previously, these hospitals are still receiving IPPS payments under section 1886(d) of the Act. Consistent with the FY 2025 IPPS/LTCH PPS final rule, we also proposed to include all applicable data from subsection (d) hospitals participating in the Comprehensive Care for Joint Replacement (CJR) Model in our IPPS payment modeling and ratesetting calculations. The charges for each of the 19 cost groups for each claim were standardized to remove the effects of differences in area wage levels, IME and DSH payments, and for hospitals located in Alaska and Hawaii, the applicable cost- of-living adjustment. Because hospital charges include charges for both operating and capital costs, we standardized total charges to remove the effects of differences in geographic adjustment factors, cost-of-living adjustments, and DSH payments under the capital IPPS as well. Charges were then summed by MS–DRG for each of the 19 cost groups so that each M ferences in geographic adjustment factors, cost-of-living adjustments, and DSH payments under the capital IPPS as well. Charges were then summed by MS–DRG for each of the 19 cost groups so that each MS–DRG had 19 standardized charge totals. Statistical outliers were then removed. These charges were then adjusted to cost by applying the national average CCRs developed from the FY 2023 cost report data. The 19 cost centers that we used in the relative weight calculation are shown in a supplemental data file, Cost Center HCRIS Lines Supplemental Data File, posted via the internet on the CMS website for this final rule and available at https://www.cms.gov/Medicare/ Medicare-Fee-for-Service-Payment/ AcuteInpatientPPS. The supplemental data file shows the lines on the cost report and the corresponding revenue codes that we used to create the 19 national cost center CCRs. In the proposed rule, we stated that if we receive comments about the groupings in this supplemental data file, we may consider these comments as we finalize our policy. We did not receive any comments on the groupings in this table and are finalizing the groupings as proposed. Consistent with historical practice, we acc sider these comments as we finalize our policy. We did not receive any comments on the groupings in this table and are finalizing the groupings as proposed. Consistent with historical practice, we account for rare situations of non- monotonicity in a base MS–DRG and its severity levels, where the mean cost in the higher severity level is less than the mean cost in the lower severity level, in determining the relative weights for the different severity levels. If there are initially non-monotonic relative weights in the same base DRG and its severity levels, then we combine the cases that group to the specific non-monotonic MS–DRGs for purposes of relative weight calculations. For example, if there are two non-monotonic MS–DRGs, combining the cases across those two VerDate Sep 2014 00:36 Aug 02, 2025 Jkt 265001 PO 00000 Frm 00117 Fmt 4701 Sfmt 4700 E:\FR\FM\04AUR2.SGM 04AUR2 2 S E L U R h t i w D O R P 4 4 1 S 7 W 9 K S D n o d n o m m a h k 36652 Federal Register / Vol. 90, No. 147 / Monday, August 4, 2025 / Rules and Regulations MS–DRGs results in the same relative weight for both MS–DRGs. The relative weight calculated using the combined cases for those severity levels is monoton onday, August 4, 2025 / Rules and Regulations MS–DRGs results in the same relative weight for both MS–DRGs. The relative weight calculated using the combined cases for those severity levels is monotonic, effectively removing any non-monotonicity with the base DRG and its severity levels. In the FY 2026 proposed rule, we stated that this calculation was applied to address non- monotonicity for cases that grouped to the following: MS–DRG 016 and MS– DRG 017, MS–DRG 095 and MS–DRG 096, MS–DRG 504 and MS–DRG 505, MS–DRG 797 and MS–DRG 798. In the supplemental file titled AOR/BOR File, we include statistics for the affected MS–DRGs both separately and with cases combined. We invited public comments on our proposals related to recalibration of the proposed FY 2026 relative weights and the changes in relative weights from FY 2025. Comment: A commenter requested that CMS clarify whether MS–DRGs 016 and 017 were non-monotonic. Response: The proposed rule inadvertently included an incorrect list of MS–DRGs where a calculation was applied to address non-monotonicity. This list should have been MS–DRG 095 and MS–DRG 096, MS–DRG 217 and MS–DRG 218. After consideration of the comments received, of MS–DRGs where a calculation was applied to address non-monotonicity. This list should have been MS–DRG 095 and MS–DRG 096, MS–DRG 217 and MS–DRG 218. After consideration of the comments received, we are finalizing our proposals without modifications related to the recalibration of the FY 2026 relative weights. We summarize and respond to comments relating to the methodology for calculating the relative weight for MS–DRG 018 in the next section of this final rule. b. Relative Weight Calculation for MS– DRG 018 In the FY 2021 IPPS/LTCH PPS final rule (85 FR 58451 through 58453), we created MS–DRG 018 for cases that include procedures describing CAR T- cell therapies. We also finalized our proposal to modify our existing relative weight methodology to ensure that the relative weight for MS–DRG 018 appropriately reflects the relative resources required for providing CAR T- cell therapy outside of a clinical trial, while still accounting for the clinical trial cases in the overall average cost for all MS–DRGs (85 FR 58599 through 58600). Specifically, we stated that clinical trial claims that group to new MS–DRG 018 would not be included when calculating the average cost for MS–DRG ge cost for all MS–DRGs (85 FR 58599 through 58600). Specifically, we stated that clinical trial claims that group to new MS–DRG 018 would not be included when calculating the average cost for MS–DRG 018 that is used to calculate the relative weight for this MS–DRG, so that the relative weight reflects the costs of the CAR T-cell therapy drug. We stated that we identified clinical trial claims as claims that contain ICD–10– CM diagnosis code Z00.6 or contain standardized drug charges of less than $373,000, which was the average sales price of KYMRIAH and YESCARTA, the two CAR T-cell biological products licensed to treat relapsed/refractory large B-cell lymphoma as of the time of the development of the FY 2021 final rule. In addition, we stated that (a) when the CAR T-cell therapy product is purchased in the usual manner, but the case involves a clinical trial of a different product, the claim will be included when calculating the average cost for new MS–DRG 018 to the extent such cases can be identified in the historical data, and (b) when there is expanded access use of immunotherapy, these cases will not be included when calculating the average cost for new MS–DRG 018 to the exte can be identified in the historical data, and (b) when there is expanded access use of immunotherapy, these cases will not be included when calculating the average cost for new MS–DRG 018 to the extent such cases can be identified in the historical data. We also finalized our proposal to calculate an adjustment to account for the CAR T-cell therapy cases identified as clinical trial cases in calculating the national average standardized cost per case that is used to calculate the relative weights for all MS–DRGs and for purposes of budget neutrality and outlier simulations. We calculate this adjustor by dividing the average cost for cases that we identify as clinical trial cases by the average cost for cases that we identify as non-clinical trial cases, with the additional refinements that (a) when the CAR T-cell therapy product is purchased in the usual manner, but the case involves a clinical trial of a different product, the claim will be included when calculating the average cost for cases not determined to be clinical trial cases to the extent such cases can be identified in the historical data, and (b) when there is expanded access use of immunotherapy, these cases will be i for cases not determined to be clinical trial cases to the extent such cases can be identified in the historical data, and (b) when there is expanded access use of immunotherapy, these cases will be included when calculating the average cost for cases determined to be clinical trial cases to the extent such cases can be identified in the historical data. We stated that to the best of our knowledge, there were no claims in the historical data used in the calculation of this adjustment for cases involving a clinical trial of a different product, and to the extent the historical data contain claims for cases involving expanded access use of immunotherapy we believe those claims would have drug charges less than $373,000. In the FY 2021 IPPS/LTCH PPS final rule (85 FR 58842), we also finalized an adjustment to the payment amount for applicable clinical trial and expanded access use immunotherapy cases that group to MS–DRG 018, and indicated that we would provide instructions for identifying these claims in separate guidance. Following the issuance of the FY 2021 IPPS/LTCH PPS final rule, we issued guidance 11 stating that providers may enter a Billing Note NTE02 ‘‘Expand Acc Use’’ on t g these claims in separate guidance. Following the issuance of the FY 2021 IPPS/LTCH PPS final rule, we issued guidance 11 stating that providers may enter a Billing Note NTE02 ‘‘Expand Acc Use’’ on the electronic claim 837I or a remark ‘‘Expand Acc Use’’ on a paper claim to notify the MAC of expanded access use of CAR T- cell therapy. In this case, the MAC would add payer-only condition code ‘‘ZB’’ so that Pricer will apply the payment adjustment in calculating payment for the case. In cases when the CAR T-cell therapy product is purchased in the usual manner, but the case involves a clinical trial of a different product, the provider may enter a Billing Note NTE02 ‘‘Diff Prod Clin Trial’’ on the electronic claim 837I or a remark ‘‘Diff Prod Clin Trial’’ on a paper claim. In this case, the MAC would add payer-only condition code ‘‘ZC’’ so that the Pricer will not apply the payment adjustment in calculating payment for the case. In the FY 2022 IPPS/LTCH PPS final rule, we revised MS–DRG 018 to include cases that report the procedure codes for CAR T-cell and non-CAR T- cell therapies and other immunotherapies (86 FR 44798 through 44806). We also finalized our proposal to continue to G 018 to include cases that report the procedure codes for CAR T-cell and non-CAR T- cell therapies and other immunotherapies (86 FR 44798 through 44806). We also finalized our proposal to continue to use the proxy of standardized drug charges of less than $373,000 (86 FR 44965) to identify clinical trial claims. We also finalized use of this same proxy for the FY 2023 IPPS/LTCH PPS final rule (87 FR 48894). Following the issuance of the FY 2023 IPPS/LTCH PPS final rule, we issued guidance 12 stating where there is expanded access use of immunotherapy, the provider may submit condition code ‘‘90’’ on the claim so that Pricer will apply the payment adjustment in calculating payment for the case. We stated that MACs would no longer append Condition Code ‘ZB’ to inpatient claims reporting Billing Note NTE02 ‘‘Expand Acc Use’’ on the electronic claim 837I or a remark ‘‘Expand Acc Use’’ on a paper claim, effective for claims for discharges that occur on or after October 1, 2022. In the FY 2024 IPPS/LTCH PPS final rule, we explained that the MedPAR claims data now includes a field that identifies whether or not the claim includes expanded access use of immunotherapy. We stated that for t 024 IPPS/LTCH PPS final rule, we explained that the MedPAR claims data now includes a field that identifies whether or not the claim includes expanded access use of immunotherapy. We stated that for the FY 2022 MedPAR claims data, this field identifies whether or not the claim includes condition code ZB, and for the FY 2023 MedPAR data and subsequent 11 https://www.cms.gov/files/document/ r10571cp.pdf. 12 https://www.cms.gov/files/document/ r11727cp.pdf. VerDate Sep 2014 00:36 Aug 02, 2025 Jkt 265001 PO 00000 Frm 00118 Fmt 4701 Sfmt 4700 E:\FR\FM\04AUR2.SGM 04AUR2 2 S E L U R h t i w D O R P 4 4 1 S 7 W 9 K S D n o d n o m m a h k Federal Register / Vol. 90, No. 147 / Monday, August 4, 2025 / Rules and Regulations 36653 years, this field will identify whether or not the claim includes condition code 90. We further noted that the MedPAR files now also include a variable that indicates whether the claim includes the payer-only condition code ‘‘ZC’’, which identifies a case involving the clinical trial of a different product where the CAR T-cell, non-CAR T-cell, or other immunotherapy product is purchased in the usual manner. Accordingly, and as discussed further in the FY 2024 IPPS/L clinical trial of a different product where the CAR T-cell, non-CAR T-cell, or other immunotherapy product is purchased in the usual manner. Accordingly, and as discussed further in the FY 2024 IPPS/LTCH PPS final rule, we finalized two modifications to our methodology for identifying clinical trial claims and expanded access use claims in MS–DRG 018 (88 FR 58791). First, we finalized to exclude claims with the presence of condition code ‘‘90’’ (or, for FY 2024 ratesetting, which was based on the FY 2022 MedPAR data, the presence of condition code ‘‘ZB’’) and claims that contain ICD–10– CM diagnosis code Z00.6 without payer- only code ‘‘ZC’’ to MS–DRG 018 when calculating the average cost for MS–DRG 018. Second, we finalized to no longer use the proxy of standardized drug charges of less than $373,000 to identify clinical trial claims and expanded access use cases when calculating the average cost for MS–DRG 018. Accordingly, we finalized that in calculating the relative weight for MS– DRG 018 for FY 2024, only those claims that group to MS–DRG 018 that (1) contain ICD–10–CM diagnosis code Z00.6 and do not include payer-only code ‘‘ZC’’ or (2) contain condition code ‘‘ZB’’ (or, for DRG 018 for FY 2024, only those claims that group to MS–DRG 018 that (1) contain ICD–10–CM diagnosis code Z00.6 and do not include payer-only code ‘‘ZC’’ or (2) contain condition code ‘‘ZB’’ (or, for subsequent fiscal years, condition code ‘‘90’’) would be excluded from the calculation of the average cost for MS–DRG 018. Consistent with this, we also finalized modifications to our calculation of the adjustment to account for the CAR T- cell therapy cases identified as clinical trial cases in calculating the national average standardized cost per case that is used to calculate the relative weights for all MS–DRGs. We refer readers to the FY 2024 IPPS/LTCH PPS final rule for further discussion of these modifications (88 FR 58791). Consistent with the FY 2025 IPPS/ LTCH PPS final rule, in the proposed rule, for FY 2026 we proposed to continue to use our methodology as modified in the FY 2024 IPPS/LTCH PPS final rule for identifying clinical trial claims and expanded access use claims in MS–DRG 018, with an additional modification as discussed in this section. First, we exclude claims with the presence of condition code ‘‘90’’ and claims that contain ICD–10– CM diagnosis code Z00.6 wi MS–DRG 018, with an additional modification as discussed in this section. First, we exclude claims with the presence of condition code ‘‘90’’ and claims that contain ICD–10– CM diagnosis code Z00.6 without payer- only code ‘‘ZC’’ that group to MS–DRG 018 when calculating the average cost for MS–DRG 018. Second, we no longer use the proxy of standardized drug charges of less than $373,000 to identify clinical trial claims and expanded access use cases when calculating the average cost for MS–DRG 018. In section VI.H. of this final rule, we discuss our proposal to apply the payment adjustment for clinical trial and expanded access use immunotherapy cases to other cases where the immunotherapy product is not purchased in the usual manner, such as obtained at no cost. To mirror this proposed change within our relative weight methodology, we proposed to also exclude claims with standardized drug charges below the median standardized drug charge of claims identified as clinical trials in MS–DRG 018 when we calculate the average cost for MS–DRG 018. For the proposed rule, based on the December 2024 update of the FY 2024 MedPAR file, we estimated that the median standardized drug charge of DRG 018 when we calculate the average cost for MS–DRG 018. For the proposed rule, based on the December 2024 update of the FY 2024 MedPAR file, we estimated that the median standardized drug charge of claims identified as clinical trials in MS–DRG 018 is $29,819. We proposed to apply this policy for 2 years (that is, in our relative weight methodology for MS–DRG 018 for FYs 2026 and 2027), until the claims data reflects the addition of the condition code indicating that the immunotherapy product is not purchased in the usual manner, such as obtained at no cost, which then would be able to be used to identify these cases such that they can be identified for exclusion from the calculation of the average cost of MS– DRG 018. We also proposed, for the purpose of performing this trim, to update the median standardized drug charge of claims identified as clinical trials in MS–DRG 018 based on more recent data for the final rule. Accordingly, we proposed that in calculating the relative weight for MS– DRG 018 for FY 2026, in identifying clinical trial claims and expanded access use claims and other cases where the immunotherapy product is not purchased in the usual manner, such as obtaine t for MS– DRG 018 for FY 2026, in identifying clinical trial claims and expanded access use claims and other cases where the immunotherapy product is not purchased in the usual manner, such as obtained at no cost, only those claims that group to MS–DRG 018 that (1) contain ICD–10–CM diagnosis code Z00.6 and do not include payer-only code ‘‘ZC’’, (2) contain condition code ‘‘90’’, or (3) contain standardized drug charges below the median standardized drug charge of clinical trial cases in MS–DRG 018 would be excluded from the calculation of the average cost for MS–DRG 018. With respect to claims that group to MS–DRG 018 and are identified as clinical trials or involve expanded access use of the CAR T-cell therapy or other immunotherapy, we noted in the proposed rule that there are some cases that appear to include drug charges similar to cases not identified as clinical trials or involving expanded access use. These charges are generally in revenue center 0891, Cell Therapy Drug Charges. We stated that we are seeking comments on potential reasons for why claims identified as clinical trials or involving expanded access use, in which the provider would typically receive the product a . We stated that we are seeking comments on potential reasons for why claims identified as clinical trials or involving expanded access use, in which the provider would typically receive the product at no cost, would have charges in revenue center 0891, Cell Therapy Drug Charges. We also proposed to continue to use the methodology as modified in the FY 2024 IPPS/LTCH PPS final rule to calculate the adjustment to account for the CAR T-cell therapy cases identified as clinical trial cases in calculating the national average standardized cost per case that is used to calculate the relative weights for all MS–DRGs, with the same proposed modification as described previously to identify other cases where the immunotherapy product is not purchased in the usual manner, such as obtained at no cost: • Calculate the average cost for cases assigned to MS–DRG 018 that (a) contain ICD–10–CM diagnosis code Z00.6 and do not contain condition code ‘‘ZC’’, (b) contain condition code ‘‘90’’, or (c) contain standardized drug charges below the median standardized drug charge of clinical trial cases in MS–DRG 018. • Calculate the average cost for all other cases assigned to MS–DRG 018. • Calculate an a ain standardized drug charges below the median standardized drug charge of clinical trial cases in MS–DRG 018. • Calculate the average cost for all other cases assigned to MS–DRG 018. • Calculate an adjustor by dividing the average cost calculated in step 1 by the average cost calculated in step 2. • Apply the adjustor calculated in step 3 to the cases identified in step 1 as applicable clinical trial or expanded access use cases, and other cases where the immunotherapy product is not purchased in the usual manner, such as obtained at no cost, then add this adjusted case count to the non-clinical trial case count prior to calculating the average cost across all MS–DRGs. Under our proposal to continue to apply this methodology, with the proposed modification as described, based on the December 2024 update of the FY 2024 MedPAR file used for the proposed rule, we estimated that the average costs of cases assigned to MS– DRG 018 that are identified as clinical trial cases ($88,484) were 23 percent of the average costs of the cases assigned to MS–DRG 018 that are identified as non-clinical trial cases ($385,147). Accordingly, as we did for FY 2025, we proposed to adjust the transfer-ad 3 percent of the average costs of the cases assigned to MS–DRG 018 that are identified as non-clinical trial cases ($385,147). Accordingly, as we did for FY 2025, we proposed to adjust the transfer-adjusted case count for MS–DRG 018 by applying the proposed adjustor of 0.23 to the applicable clinical trial and expanded access use immunotherapy cases, and VerDate Sep 2014 00:36 Aug 02, 2025 Jkt 265001 PO 00000 Frm 00119 Fmt 4701 Sfmt 4700 E:\FR\FM\04AUR2.SGM 04AUR2 2 S E L U R h t i w D O R P 4 4 1 S 7 W 9 K S D n o d n o m m a h k 36654 Federal Register / Vol. 90, No. 147 / Monday, August 4, 2025 / Rules and Regulations other cases where the immunotherapy product is not purchased in the usual manner, such as obtained at no cost, and to use this adjusted case count for MS– DRG 018 in calculating the national average cost per case, which is used in the calculation of the relative weights. Therefore, in calculating the national average cost per case for purposes of the proposed rule, each case identified as an applicable clinical trial or expanded access use immunotherapy case, and other cases where the immunotherapy product is not purchased in the usual manner, such as obtained at no case identified as an applicable clinical trial or expanded access use immunotherapy case, and other cases where the immunotherapy product is not purchased in the usual manner, such as obtained at no cost, was adjusted by 0.23. As we did for FY 2025, we applied the same adjustor for the applicable cases that group to MS– DRG 018 for purposes of budget neutrality and outlier simulations. We also proposed to update the value of the adjustor based on more recent data for the final rule. Comment: Commenters supported our proposal to exclude claims in MS–DRG 018 with standardized drug charges below the median standardized drug charges of cases identified as clinical trials in MS–DRG 018. Commenters stated that this proposal ensures that clinical trial and no-cost cases do not distort payment rates across the IPPS. We note a commenter mistakenly referred to our existing policy as still excluding cases that have a standardized drug charge of less than $373,000. Commenters requested clarification about whether the median standardized drug charges includes all drug revenue lines and all clinical trial claims, including expanded access claims. Some commenters expressed support for the ident tion about whether the median standardized drug charges includes all drug revenue lines and all clinical trial claims, including expanded access claims. Some commenters expressed support for the identification of cases involving patient assistance programs, where no cost is incurred, but expressed confusion regarding the language ‘‘product not purchased in the usual manner’’, stating that is subjective, which can lead to confusion and undue administrative burden for providers and varying interpretations by the MACs. A commenter requested that CMS modify the language to reflect the request in the comment summarized in the FY 2025 IPPS/LTCH PPS final rule, which referred to cases where the immunotherapy is ‘‘obtained at no cost’’. Response: We appreciate commenters support for our proposal. While we indicated in the proposed rule that we calculate the median standardized drug charges for cases identified as clinical trial claims including cases that contain ICD–10–CM diagnosis code Z00.6 and do not include payer only code ZC, we note that in calculating the median standardized drug charges for cases identified as clinical trial claims, we included claims that (a) contain ICD– 10–CM d and do not include payer only code ZC, we note that in calculating the median standardized drug charges for cases identified as clinical trial claims, we included claims that (a) contain ICD– 10–CM diagnosis code Z00.6 and do not contain condition code ‘‘ZC’’ or (b) contain condition code ‘‘90’’. Just as we treat cases identified as clinical trial cases and expanded access use cases in the same manner for payment purposes and in the calculation of the relative weights, we are also including both claims identified as clinical trial cases and claims identified as expanded access use cases in calculating the median drug charges. Since the provider does not incur the cost of the drug in cases identified as clinical trial cases or expanded access use cases, but still incurs costs for other drugs during the inpatient stay, we believe that using the median standardized drug charge for clinical trial and expanded access use cases would appropriately identify other cases involving products not purchased in the usual manner. The drug revenue lines are the same as those used in the relative weight calculations, which are shown in the Cost Center HCRIS Lines Supplemental Data File referenced purchased in the usual manner. The drug revenue lines are the same as those used in the relative weight calculations, which are shown in the Cost Center HCRIS Lines Supplemental Data File referenced earlier in this section. With respect to the commenters who expressed concerns about the language ‘‘product not purchased in the usual manner’’, we note that this phrasing is not new; we have used the language ‘‘product is purchased in the usual manner’’ in prior rules with respect to MS–DRG 018. Furthermore, we believe that this language is appropriately phrased to include the broad range of scenarios that may fall under it. For example, as described later in this section, commenters raised the possibility of immunotherapy products administered over multiple encounters. Given that we cannot predict all possible scenarios where the product is not purchased in the usual manner, use of a condition code that reflects a broad array of circumstances will facilitate more accurate payment and ratesetting. We further note that the ‘‘usual manner’’ in which a product is purchased may differ for products administered in one dose versus split doses. Comment: Commenters noted that some immunothera esetting. We further note that the ‘‘usual manner’’ in which a product is purchased may differ for products administered in one dose versus split doses. Comment: Commenters noted that some immunotherapy products may be administered over multiple encounters (including in an outpatient setting). A commenter requested that CMS confirm that a reduced payment for MS–DRG 018 does not apply when a hospital purchases an immunotherapy product (that is, incurs a cost), irrespective of whether it is administered in multiple encounters. This commenter requested that if CMS has specific requirements for how providers should handle these situations, it should clarify them or state that it is up to the individual provider to determine how to develop charges for multiple administrations of a single product obtained from a manufacturer. A commenter stated that unless manufacturers change their processes for products administered over multiple encounters, hospitals will continue to receive a single invoice and require guidance about how to report the charges. Response: CMS does not dictate a provider’s charge structure or how they itemize their charges. As stated in Chapter 22, Section 2203 of the P ice and require guidance about how to report the charges. Response: CMS does not dictate a provider’s charge structure or how they itemize their charges. As stated in Chapter 22, Section 2203 of the Provider Reimbursement Manual (https:// www.cms.gov/regulations-and- guidance/guidance/manuals/paper- based-manuals-items/cms021929), providers ‘‘should have an established charge structure which is applied uniformly to each patient as services are furnished to the patient and which is reasonably and consistently related to the cost of providing the services’’. Providers should bill in the manner that they customarily bill for split-dose administration and the charges should be reasonably and consistently related to the cost of providing the service in a split-dose administration circumstance. A split-dose administration should not result in twice the amount of payment just by virtue of the fact it is a split-dose administration. For example, we remind hospitals that Chapter 3, Inpatient Hospital Billing, section 40.2.5 of the Medicare Claims Processing Manual (https://www.cms.gov/regulations-and- guidance/guidance/manuals/ downloads/clm104c03.pdf) states that hospitals may place a pati spital Billing, section 40.2.5 of the Medicare Claims Processing Manual (https://www.cms.gov/regulations-and- guidance/guidance/manuals/ downloads/clm104c03.pdf) states that hospitals may place a patient on a leave of absence when readmission is expected and the patient does not require a hospital level of care during the interim period. Placing a patient on a leave of absence will not generate two payments. Only one bill and one DRG payment are made. Comment: A commenter stated that a potential reason why claims identified as clinical trials or involving expanded access use, in which the provider would typically receive the product at no cost, would have charges in revenue center 0891, is that the case involves a clinical trial of another product. The commenter stated that given the two-step and manual process in flagging these claims, (that is, the provider includes ‘‘Diff Prod Clin Trial’’ in the Remarks field and the MAC adds a payer-only condition code of ‘‘ZC’’), there is likely a percentage of cases where the condition code was not applied as it should be. The commenter noted that CMS’ recent billing instructions that automate the application of ‘‘ZC’’ should reduce the numb a percentage of cases where the condition code was not applied as it should be. The commenter noted that CMS’ recent billing instructions that automate the application of ‘‘ZC’’ should reduce the number of claims with this profile. VerDate Sep 2014 00:36 Aug 02, 2025 Jkt 265001 PO 00000 Frm 00120 Fmt 4701 Sfmt 4700 E:\FR\FM\04AUR2.SGM 04AUR2 2 S E L U R h t i w D O R P 4 4 1 S 7 W 9 K S D n o d n o m m a h k Federal Register / Vol. 90, No. 147 / Monday, August 4, 2025 / Rules and Regulations 36655 Response: We appreciate the feedback on our comment solicitation and will continue to monitor CAR T-cell therapy claims for such potential anomalies. Comment: Some commenters expressed concern that CMS no longer uses the $373,000 threshold to identify clinical trial cases and requested that CMS continue to refine its methodology to also consider standardized drug charges to correctly identify clinical trial cases. Commenters expressed concern that due to incorrect coding or incorrect application of condition codes, cases below the $373,000 threshold may be identified as clinical trials when the provider incurs the cost of the drug. The commenter stated that as a result, these cases would