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MS DRG Changes for 2022 [PODCAST]

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The Hospital Finance Podcast

In this episode, we welcome back Mary Devine, BESLER’s Senior Director of Revenue Cycle, to discuss the 2022 changes to the Inpatient Prospective Payment System and the impact to IPPS facilities.

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Highlights of this episode include:

  • The big changes to DRGs for 2022
  • The impact on payments to providers
  • New diagnosis and procedure codes
  • Updates due to COVID

Mike Passanante: Hi, it’s Mike Passanante and welcome back to the award-winning Hospital Finance podcast. Annually, CMS proposes changes to the inpatient prospective payment system that can impact how IPPS facilities are reimbursed for Medicare, either positively or negatively. The final IPPS rule provides updates to reimbursement, MS-DRGs, and ICD-10 coding. To update us on some of these changes is Mary Devine, Senior Director of Revenue Cycle Services here at Besler. Mary, welcome back to the show.

Mary Devine: Thanks for having me, Mike.

Mike: So, Mary, are there any big changes to DRGs for 2022?

Mary: It’s really strange to have to say this, but there are no real big changes for 2022. And because 2020 was such a strange year – and we all know why it was so strange – they typically rely on the past MedPAR data to make changes in the final rule and, unfortunately, they just did not want to use any of the MedPAR data from 2020, so they went back and used the MedPAR data from 2019 and all that claims data. So when you do that–and they used that 2019 to make the 2020, so if you re-use that data–although they did any updates to the claim, so if somebody reprocessed a claim for whatever reason, they would capture that in the 2019 data, but there are no changes to the DRGs for 2022. And I don’t know if that’s a good thing or a bad thing, but it just is what it is, unfortunately. So hopefully as we head into 2023, at some point later they’ll be able to use 2021 data, because certainly 2021 feels a little bit better than 2020.

Mike: Yeah, more fallout from a pandemic year–I know part of the IPPS final rule is to make updates to the accounts impacted by the transfer rule. Are there any changes coming up in 2022?

Mary: No, there are not, and for the exact same reason. They utilize, again, that claim data to determine the 50th percentile, if people are transferred or not. And if they use the data from 2019, then unfortunately there’s no real change. So if you remember in 2021, there’s 280 DRGs impacted by the rule and there were those two new DRGs that were added for the knee replacements. There’s nothing new for 2022. So as we head into 2022 then the claims that were impacted by the rule in 2021–they’re the same DRGs that are impacted heading into 2022.

Mike: Got it, so we’ll see where this next question goes here. So payments to providers are always impacted by the final rule. What is the impact for 2022?

Mary: And I guess this is the good news for providers. So they’re expecting there to be a $3.7 billion increase for 2022 and that’s a 2.6 percent increase over payments to providers over 2021, and if you can remember, back in 2021, it was $3.5 million. So there’s certainly a little bit more that’s being funded this year.

Mike: Okay, well, that’s a good change. Are there any new diagnosis codes or procedure codes we should be aware of?

Mary: Yup, so there are new codes for both of those, and it’s significantly less than there was in 2021, but there’s still some. There are 185 new diagnosis codes that were added, and there were 22 codes that were deleted. And when you look back at 2021, just to show the difference, there were 446 new diagnoses codes added, with 63 being deleted, so you can see that shift in the volume into 2022. And then for procedure codes, there are 569 added and 113 deleted. And again, when you look back at the changes for 2021, there were over 1000 codes that were added. So, again, there’s just not that new data to review and make changes.

Mike: Mary, are there any other updates for 2022 that you’d like to share?

Mary: Yeah, there are a couple that I would like to point out, and two of them have to do with COVID. I think all roads lead back to COVID, lately. So the first one is that in the 2022 IPPS final rule, they’re adding a new measure to the hospital inpatient quality reporting program, and this will require hospitals to report the percentage of healthcare personnel that receives and complete their vaccination course against COVID-19. And the first report will be due, already, October 1st, 2021, and that’s just three weeks away – hard to believe – through December 31. So that first report will be reported in 2022, but that’s the time that they’re beginning to measure, since the final rule goes into effect on October 1. And then, in addition to that, it will impact their payments for 2023, and it will be public information, so CMS will be reporting that percentage to anybody who wants to review that. They added in the new COVID treatment add-on payment. They added that back in 2020. And right now, they’re continuing to add that add-on payment, and it will continue through the end of the pandemic, through the next year. So just as an example, if they called the pandemic in October, that would be federal year 2022. They would continue that completely through that full year until we got into 2023. If they don’t call it until 2023, then it will continue until 2024, so it will continue through the federal year.

Mike: Okay, well, those are some important updates, Mary. And for anyone in our audience that wants to understand more about changes in the IPPS final rule, Josh Weissenborn on our reimbursement team recently delivered a very comprehensive webinar on this topic. So you can head up to, click on the Insights button, look for the Reimbursement tab, and you can get access to the slides as well as a recording of the webinar, so we welcome you to do that. Mary, thanks so much for coming back to the show and sharing your thoughts on the upcoming changes to the IPPS final rule.

Mary: Great, happy to share.

The Hospital Finance Podcast


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