D -- Grouper Software maintenance and update

The Centers for Medicare and Medicaid Services (CMS) intends to contract with 3M Health Information Systems (HIS) on a sole source basis to provide: software systems maintenance, annual/quarterly updates to the Diagnosis Related Group (DRG) Grouper and to complete the complex conversion from the current International Classification of Diseases Ninth Revision Clinical Modification (ICD-9 CM) to the International Classification of Disease Tenth Revision Procedure Classification System (ICD-10 PCS). (Based on the Conversion Act which indicates the conversion should be adopted by 2007). These system changes will impact the Medicare Code Editor (MCE) and Outpatient Code Editor (OCE) for the Medicare Prospective Payment System (PPS). Under Medicare, payments via PPS are made to participating hospitals for each inpatient discharge based on the related DRGs. The Healthcare Common Procedure Coding System (HCPCS) is used for outpatient surgical services, which are based on Ambulatory Payment Classifications (APC). The Grouper software, which consists of automated classification algorithms that determines DRG assignments based on data elements provided by the hospital, is used to ensure that both inpatient and outpatient Medicare claims are processed systematically, and uniformly. Under the current contract with 3M, the preliminary research, statistical analysis and documentation on the impact of replacing the ICD-9 CM coding system with the ICD-10 PCS has been delivered in first draft. To ensure that the over 180 million Medicare claims processed each year, via the PPS using the MCE, the OCE and the DRG is not interrupted, the ICD-10 PCS conversion is required to be timely and error free. This is not a request for competitive proposals. See government-wide numbered note 22. This contract will be awarded for one (1) year plus four (4) successive one (1) year option periods.