October marks the passing of the MS-DRG deadline, and this blog

The passing of Oct. 1, 2008 marks the industry's official transition to MS-DRGs, and this blog's two-year anniversary of chronicling the development and implementation of the new reimbursement system. Ingenix is proud to have sponsored the SDRG Report blog during this time, and we'd like to thank our loyal readers who have frequently visited our site to stay up to date with the latest MS-DRG developments.

As the industry is well along in its journey to adopt MS-DRGs, Ingenix has made the decision to discontinue the SDRG Report so that it can focus on other issues that pose challenges for the industry. One of these new challenges is the industry’s transition to ICD-10. To address this issue, Ingenix has developed ICD-10 Prepared to provide the news, resources and tools that organizations will need in their adoption of the new reimbursement system. We hope that you will visit ICD-10 Prepared. As this will be the last post on the SDRG Report blog, we wanted to take the opportunity to highlight some of the issues that have taken place during the past two years.

In 2006, CMS issued its proposed rule announcing the transition to severity-adjusted reimbursement. The industry's strong response to the announcement is what prompted the development of this blog. What eventually evolved into MS-DRGs started off as the adaptation of a proprietary casemix system that lacked transparency in its logic. The industry quickly responded with its concerns and comment letters flooded CMS during the public comment period. Fortunately, CMS listened to the industry and independent analyses conducted by RAND Corporation and others. As a result, CMS decided to develop its own severity-adjusted reimbursement system, and MS-DRGs were born.

Besides announcing the creation of MS-DRGs, the final rule published by CMS detailed what became known within the industry as the "behavioral offset," which was met with much opposition by the industry. At one point, even the U.S. House of Representatives took action and passed legislation delaying MS-DRG implementation, as well as the behavioral offset. Ultimately, the bill was modified to delay the behavioral offset, and components of the final rule – with some modifications – were enacted.

In reviewing past posts on the blog, it's interesting to see how MS-DRGs eventually became "accepted" by the industry, yet other elements of the final rule caused – and continue to cause – much controversy. These elements include the Present on Admission (POA reporting requirement, and the no-pay policy adopted by CMS for hospital-acquired conditions (HACs). During the past year, numerous commercial payers have adopted no-pay policies as a way to improve care quality and reduce costs. Among all the elements covered in the 1,000-plus pages of the final rule, POA reporting requirements and the no-pay policy for HACs seem to have the biggest impact on industry trends.

During the past year, many of the blog's posts focused on a related issue that gripped the industry – that being the Recovery Audit Contractor (RAC) pilot program and the development of the nationwide permanent program. As the posts detail, the RAC program will be a force to reckon with for the years ahead.

The passing of the Oct. 1, 2008 MS-DRG implementation deadline marks a milestone for the industry, as it shifts coding, reimbursement and the monitoring of care quality into a new realm. So far, the industry seems to be adjusting well to the changes.

As that highlights the past two years of this blog, we want to once again thank all of our readers for making this blog successful. With this being our last post, we bid you goodbye with wishes of accurate coding and reimbursement for the years to come. In addition, please let us know if we can help you along the way, and don’t forget to visit us at www.icd10prepared.com.