Follow the steps to determine the MS-DRG

By Cheryl Ericson, MS, RN, CCDS, CDIP

Many clinical documentation improvement (CDI) specialists with clinical backgrounds are encoder dependent, trained to “code” using an encoder and taught to create a working MS-DRG based on grouper software. Many coders also rely on the encoder.

However, CDI specialists and coders should understand how to manually assign a MS-DRG, too. The basics steps for assigning a MS-DRG are:

1. Identify all the reportable diagnoses in the health record and assign their applicable ICD code (we currently use ICD-9-CM, but will transition to ICD-10-CM October 1).
2. Identify the principal diagnosis (the condition after study determined to be chiefly responsible for occasioning the admission). The remaining diagnoses are secondary diagnoses, some of which may be classified by CMS as a CC or MCC.
3. Use the Alphabetic Index of diagnoses in the DRG Expert to identify the base/medical MS-DRG, noting its Major Diagnostic Category (MDC)/body system by scanning the MS-DRGs associated with the listed pages to see which applies to the particular scenario. The MDC is necessary to assign the surgical MS-DRG when applicable.
4. Identify all reportable procedures and their associated procedure code (ICD-9-CM Volume 3 until we transition to ICD-10-PCS).

The Uniform Hospital Discharge Data Set (UHDDS) defines reportable diagnoses and procedures. Most coders and CDI specialists are familiar with the definitions associated with diagnoses, but less familiar with those associated with procedures. You should only report significant procedures. According to UHDDS, a significant procedure is one that is either:

• Surgical in nature
• Carries a procedural risk
• Carries an anesthetic risk
• Requires specialized training

In addition, UHDDS defines the principal procedure as:

• One that was performed for definitive treatment, rather than one performed for diagnostic or exploratory purposes, or was necessary to take care of a complication
• If two procedures could be principal, then select the one most related to the principal diagnosis

The UHDDS definitions of significant procedures is helpful because not all procedures will affect the MS-DRG. Some procedures won’t have any impact on the MS-DRG, some procedures will change the base medical MS-DRG, and some procedures will move the case to a surgical MS-DRG.

Procedures that are diagnostic in nature are less likely to impact the MS-DRG assignment because they are typically performed in the outpatient setting, which is why they are less likely to be the principal procedure. Also, the principal procedure is usually related to the principal diagnosis, meaning they usually can be found in the same MDC/body system. ICD-10-PCS has specific guidelines regarding the assignment of the principal procedure.

If a procedure was performed, determine if it is significant:

• If there are multiple significant procedures determine the principal procedure
• Assign the procedure code(s) and use the numeric index in the DRG Expert to see if the code is listed. If the code isn’t in the DRG Expert index of procedures, is it because of one of the two following reasons:
  • It is not a “reimbursable” procedure (i.e., one that will not affect the MS-DRG assignment)
  • It is a major operating room procedure

Non-reimbursable procedures

Let’s explore the first situation, when the procedure doesn’t affect MS-DRG assignment. In this situation, finalize the base medical MS-DRG by checking the impact of secondary diagnoses. Are any classified as CCs or MCCs? Are there any query opportunities to add a diagnosis that can affect the MS-DRG?

Once you address the secondary diagnoses, you can establish the working MS-DRG, which you can revise as additional secondary diagnoses and/or procedures occur during the admission.

More often than not, the procedure code will be in the numeric index of procedures. The index lists possible associated MS-DRGs. If more than one page is listed, check each of the possible associated MS-DRGs to see if any are located in the same MDC as the principal diagnosis. This is why it was important to note the MDC when assigning the base medical MS-DRG.

As long as the procedure maps to an MS-DRG that is in the same MDC as the principal diagnosis, you can assign the applicable MS-DRG. Finalize the working MS-DRG by assessing the impact of all relevant secondary diagnoses.

Unrelated principal procedures

The MS-DRG system assumes that the medical intervention/procedure will remain in the same MDC/body system as the principal diagnosis. However, sometimes the principal procedure is not related to the principal diagnoses because it is associated with a different MDC/body system, which requires the following additional steps to determine the applicable MS-DRG:

1. Turn to the DRGs Associated with All MDCs chapter in the DRG Expert
2. Scan the procedure codes listed under DRG 984 (prostatic OR procedure unrelated to PDX) for the procedure code associated with your case. These are codes from 60.0 to 60.99 in ICD-9-CM Volume 3.
3. If you find the applicable code under DRG 984 then the case will fall within a DRG referred to as a triplet, where either a CC or a MCC can “move” the DRG.
4. Check the remaining diagnosis codes to see if any are classified as a CC or MCC and finalize the DRG based on the value of the applicable secondary diagnoses, resulting in a DRG between 984 and 986.

For example, a principal diagnosis of pneumonia would lead to a base medical MS-DRG in the respiratory system MDC. A transurethral resection of the prostate procedure is found within the numeric index to procedures, but none of its associated MS-DRGs are located within the respiratory body system.

There is a mismatch between the body system of the principal diagnosis and those associated with the procedure.

You can find the applicable procedure code by scanning the procedure codes listed under MS-DRG 984. The final MS-DRG assignment depends on secondary diagnoses classified as a CC or MCC.

If the procedure code is not found under DRG 984, scan the list under DRG 987 (nonextensive OR procedure unrelated to PDX) for the applicable procedure code. These codes span several pages within the DRG Expert. If you find the code, determine the impact of the secondary diagnoses to assign the working MS-DRG.

When the procedure code isn’t listed in the procedure indexes or the MDC didn’t match that of the principal diagnosis and was not listed under DRG 984 or DRG 987—then the assumption is the case belongs in DRGs 981-983. Assess the impact of secondary diagnoses to assign the working MS-DRG.

This final step requires a leap of faith, since it is based on a process of elimination where this is the last resort for DRG assignment. Auditors closely scrutinize these DRGs because assignment within these DRGs can erroneously inflate reimbursement if the case is improperly assigned. Although some organizations try to avoid reporting DRGs 981-983, it can be an accurate MS-DRG assignment as long as the documentation supports the assignment of the principal diagnosis.

Editor’s note: Cheryl Ericson, MS, RN, CCDS, CDIP, AHIMA-approved ICD-10-CM/PCS trainer, is CDI education director for HCPro, a division of BLR, and ACDIS associate director for education. This article is based on a Q&A that originally appeared on the ACDIS website.