Know the risk, evaluate your exposure.
The FY 2019 Inpatient Prospective Payment System (IPPS), which includes the Medicare Severity Diagnosis Related Groups (MS-DRGs), went into effect Oct. 1, 2018. There is one area that did not get much attention regarding the changes that were included in this year’s update: spinal fusions.
During the Coordination and Maintenance Committee meeting held in September 2017, the topic of invalid spinal fusion codes was raised. There were spinal fusion codes, which included the character “Z” for no device. According to the ICD-10-PCS Official Coding and Reporting Guidelines, B3.10a-B3.10c, spinal fusions, require a device. In response to this observation, 87 ICD-10-PCS codes were deleted because they contained the no-device character. These codes did not meet the ICD-10-PCS definitions.
The next step in exploring this topic is understanding why this issue does not stop with the code deletions. If there was no device, then spinal fusion was not the correct procedure. What procedure codes should have been used to code these cases? When spinal fusion is assigned, the most frequent MS-DRG is 460, with a relative weight (RW) of 4.0375. If the procedure was actually a release of the spinal cord, then the MS-DRG would be 520, with a relative weight 1.3141. If the procedure was a reposition of the spinal cord or insertion of internal fixation device without reposition, then the MS-DRG is 517, with a relative weight of 1.3809. The relative weights do not sound impactful, but when converted to dollars, the impact is astounding.
The average payment for spinal fusion (MS-DRG 460) is $28,882.77, with the average Medicare payment $24,458.68. According to the National Summary of Inpatient Charge Data by Medicare Severity Diagnosis Related Groups for FY 16, the frequency was 79,495. The total Medicare payment for this MS-DRG is $1,944,342,766.60. Compare this to the average payment for MS-DRG 520, which is $9,208.77, with the average Medicare payment $6,944.51. If 10 percent of these cases were incorrectly assigned, then there would be a payback of $139,160,426.84, which is a significant chunk of change. This number is arrived at by taking 10 percent of 79,495, which is 7,945.50, and multiplying it by the difference between $24,458.88 and $6,944.51.
It is important to understand this risk and evaluate your exposure.
The first step to identifying your risk is identifying if you have submitted on a claim any of the ICD-10-PCS codes that included no device. You might want to narrow your population by reviewing all claims in the spinal fusion MS-DRGs (453-460, 471-473).
The second step is to complete a second review of these cases to determine what the correct ICD-10-PCS code would be for each identified case.
The third step is to understand your level of exposure. Identify the total number of cases as well as the MS-DRG shift. When you complete that analysis, it is time to contact the compliance officer to determine the best course of action for your facility. In my opinion, it is best to be proactive regarding identified issues.
In summary, determine if you are at risk regarding this latest change to ICD-10-PCS. Educate your coders regarding the correct code assignment for spinal fusion cases — not every documented spinal fusion is actually a spinal fusion, in ICD-10-PCS World.
Be proactive with any findings by involving the compliance officer. Spinal fusion could be the next big target for the Recovery Auditors and payers!
Program Note
Register to attend Laurie Johnson’s webcast on spinal fusion coding today at 1:30 p.m. ET.
I am sure by now that many of you have heard the news that there is an ongoing criminal investigation into UnitedHealthcare’s Medicare Advantage (MA)
A new wave of Recovery Audit Contractors (RACs) and Unified Program Integrity Contractors (UPICs) have swept across the nation, empowered to root out fraud in
Please log in to your account to comment on this article.
Stop revenue leakage and boost hospital performance by mastering risk adjustment and HCCs. This essential webcast with expert Cheryl Ericson, RN, MS, CCDS, CDIP, will reveal how inaccurate patient acuity documentation leads to lost reimbursements through penalties from poor quality scores. Learn the critical differences between HCCs and traditional CCs/MCCs, adapt your CDI workflows, and ensure accurate payments in Medicare Advantage and value-based care models. Perfect for HIM leaders, coders, and CDI professionals. Don’t miss this chance to protect your hospital’s revenue and reputation!
Struggling with ICD-10-CM coding for diabetes and complications? This expert-led webcast clarifies complex combination codes, documentation gaps, and sequencing rules to reduce denials and ensure compliance. Dr. Angela Comfort will provide actionable strategies to accurately link diabetes to complications, improve provider documentation, and optimize reimbursement—helping coders, CDI specialists, and HIM leaders minimize audit risks and strengthen revenue integrity. Don’t miss this chance to master diabetes coding with real-world case studies, key takeaways, and live Q&A!
Uncover critical guidance. HIM coding expert, Kay Piper, RHIA, CDIP, CCS, provides an interactive review on important information in each of the AHA’s 2025 ICD-10-CM/PCS Quarterly Coding Clinics in easy-to-access on-demand webcasts, available shortly after each official publication.
Uncover critical guidance. Kay Piper provides an interactive review on coding guidelines and more in the AHA’s fourth quarter 2025 ICD-10-CM/PCS Coding Clinic in an easy to access on-demand webcast.
RACmonitor is proud to welcome back Dr. Ronald Hirsch, one of his most requested webcasts. In this highly anticipated session, Dr. Hirsch will break down the complex Two Midnight Rule Medicare regulations, translating them into clear, actionable guidance. He’ll walk you through the basics of the rule, offer expert interpretation, and apply the rule to real-world clinical scenarios—so you leave with greater clarity, confidence, and the tools to ensure compliance.
Bring your questions and join the conversation during this open forum series, live every Wednesday at 10 a.m. EST from June 11–July 30. Hosted by Chuck Buck, these fast-paced 30-minute sessions connect you directly with top healthcare experts tackling today’s most urgent compliance and policy issues.
Fraud convictions don’t just punish a few bad claims; they can wipe out years of reimbursements. Don’t wait for an audit to learn the rules. Join Frank Cohen, MPA, for a live Q&A on spotting red flags, avoiding liability, and protecting your practice. Register now and bring your questions!
Substance abuse is everywhere. It’s a complicated diagnosis with wide-ranging implications well beyond acute care. The face of addiction continues to change so it’s important to remember not just the addict but the spectrum of extended victims and the other social determinants and legal ramifications. Join John K. Hall, MD, JD, MBA, FCLM, FRCPC, for a critical Q&A on navigating substance abuse in 2025. Register today and be a part of the conversation!
Copyright © 2025 RACmonitor. Powered by MedLearn Media.
Happy National Doctor’s Day! Learn how to get a complimentary webcast on ‘Decoding Social Admissions’ as a token of our heartfelt appreciation! Click here to learn more →
CYBER WEEK IS HERE! Don’t miss your chance to get 20% off now until Dec. 2 with code CYBER24
