Health patterns as DRG outlier predictors.
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Prior hospitalization experience of DRG outliers versus inliers.
The Diagnosis-Related Group (DRG)-based Medicare Prospective Payment System has raised a number of concerns. One major concern has centered on both the definition of outlier patients and how hospitals are to be paid for their care. The epidemiology of outlier patients, however, has received relatively little attention. Using a retrospective database, we constructed a case control study in which the cases were DRG outliers and the control patients were DRG-matched inlier patients. We then examined both the prior hospitalization experience of outlier patients and inlier controls, and the prior outlier experience of the attending physicians of outlier patients and inlier control patients. We demonstrated that DRG-based outlier patients were more likely to have had prior admissions to the hospital as compared with DRG-matched inlier control patients. Moreover, DRG-matched outlier cases were more likely to have had prior outlier admissions as compared to controls--an effect that was more pronounced when only the subset of patients who actually had a prior admission was evaluated. Finally, physicians of the DRG outlier patients were more likely to have had previous outlier patients than physicians of the DRG-matched inlier control patients. In summary, we were able to demonstrate that DRG-based outlier patients have a different prior admission and outlier experience than DRG-matched inlier control patients. However, because we showed the same relationship when we evaluated the outlier experience of physicians of outlier patients as compared to physicians of DRG-matched inlier controls, we were unable to determine if the effect was patient- or physician-based.(ABSTRACT TRUNCATED AT 250 WORDS)
Diagnosis-Related Groups↗
Insurance aspects of DRG outlier payments.
As part of the prospective payment system, the government pays 'outlier' payments for especially long or expensive cases. These payments can be viewed as insurance for the hospital against excessive losses. They mitigate problems of access and underprovision of care for the sickest patients, and provide additional payments to the hospitals that take care of them, thereby making payments to hospitals more equitable. This paper characterizes the outlier payment formulae that minimize risk for hospitals under any fixed constraints on the sum of outlier payments and minimum hospital coinsurance rate. We then simulate per-case payments for a policy that did not include any outlier payments, the current outlier policy, and several other policies that minimize risk subject to different coinsurance constraints. The current outlier policy achieves each of its goals to at least some extent, but more insurance could be provided without lessening attainment of the other goals. We also discuss some problems with the implementation of the current policy, such as its reliance on day outliers.
Actuarial Analysis↗
Prospective payments in a regional trauma center: the case for recognition of the transfer patient in diagnostic related groups.
BACKGROUND: Transfer patients (TP) differ from patients transported directly from the field (DP) by virtue of their complexity and delays to definitive care, factors that might impact on costs and resource utilization and aggravate the adverse selection that already threatens TC reimbursement. METHODS: This is a retrospective cohort study where patients admitted to a Level I trauma center were classified as a TP or DP. Crude and adjusted total costs, complications, length of stay, and proportion of DRG outliers were compared across the two cohorts. RESULTS: Among 8,665 patients, 40% were transferred. TP were more likely to be DRG outliers (15% versus 10%, p < 0.001). Costs in 65% of the DRGs were higher in the TP. Rates of complications and length of stay were significantly greater in the TP. CONCLUSION: There are systematic differences in resource consumption between transferred patients and patients transported directly from the field. These differences render conventional DRG-based mechanisms of reimbursement inadequate, suggesting a need for recognition of the transfer patient as a distinct entity by payers.
Adult↗
A comparison of diagnostic related group length of stay outliers: motor vehicle crash versus penetrating injuries.
The incidence and degree to which patients injured by motor vehicle crashes (MVCs) and penetrating wounds remain in the hospital beyond the diagnostic related group (DRG) mean length of stay (LOS) are compared. During a 12-month period, records for consecutive patients admitted to eight hospitals (including three trauma centers) were studied. Patients aged 13 or younger, staying less than 48 hours, or with major burns or only distal fractures were excluded. In that time, 2,914 patients were eligible. Twenty percent of injuries were penetrating; 27% were MVC injuries; and, 53% were blunt injuries from other causes. Patients injured in MVCs and with penetrating injuries were compared with respect to mean LOS, incidence of DRG outliers, number of hospital days beyond the DRG mean LOS, and demographic variables. Patients injured in MVCs had a greater proportion of DRG LOS outliers and higher mean numbers of DRG excess days than did patients with penetrating wounds (p less than 0.01, for both). Injuries were distributed among relatively more DRGs for MVC patients. The DRG scheme may lack sufficient attention to factors more likely to affect MVC patients, such as multiplicity of injuries, incidence of CNS injuries, ICU requirements, and older age. In structuring more appropriate reimbursement for trauma care, special attention must be paid to patients injured in MVCs.
Accidents, Traffic↗
Benchmarking hospital lengths of stay using histograms.
The authors demonstrated that length of stay histograms can provide considerably more benchmark information concerning hospital lengths of stay than numerical benchmarks. Examples of histograms described the complete distribution of hospital stays, as well as levels of outliers, rather than simple numerical averages. Gathering such data led to a clearer understanding of the significant LOS impact of certain DRG outliers in the two different hospitals in Syracuse, NY. Given that the other two communities represented, Seattle, Washington and San Diego, California, were more influenced by extensive managed care penetration, variations in histogram data were less in evidence there. Histograms were designed with bars to show LOS distributions at the 50th, 75th, and 90th percentiles for each of the above DRGs. The greatest variations could be shown when comparing the 1997 LOS data on the various DRGs at the two Syracuse hospitals. At both hospitals the presence of a large contingent of outliers (for different types of mostly medical patients) could be seen as the major factor in driving up their overall LOS.
Benchmarking↗
Impact of diagnosis-related group-based reimbursement for treatment of rheumatic diseases in a teaching hospital.
The impact of Medicare's diagnosis-related group (DRG)-based reimbursement system was examined for care given to 734 rheumatic disease patients discharged from a teaching hospital during a 2-year period. The analysis accounted for length of stay "outliers" as defined by Medicare and distinguished costs from charges. Excluding outliers, DRG reimbursement would result in net revenues to the hospital of +1,126 per DRG 240 patient and $1,794 per DRG 241 patient. The difference between DRGs in cost per patient was significant, indicating that DRGs clearly identify 2 groups of rheumatic disease patients. After excluding outliers, the coefficients of variation in costs for DRGs 240 and 241 were 72% and 80%, respectively, which although high, were average for DRGs at our institution. Mean total charge per patient was different for groups defined by their primary rheumatologic diagnosis in DRG 240 but not DRG 241. For rheumatoid arthritis and systemic lupus erythematosus patients, the total charge per patient did not differ, but the types of services did. The cost of treating outliers would create an average loss per outlier of $18,400 and $16,500, respectively, in DRGs 240 and 241. Outliers accounted for 34.5% and 21.8% of the 2 DRGs' total costs, respectively, but only 6.4% and 3.6% of the total number of patients. Under current DRG reimbursement rates, the cost of care for rheumatology patients would be adequately reimbursed in our hospital: losses from outliers would be offset by net revenues from inliers as long as current Medicare adjustments for capital and medical education costs were continued.
Costs and Cost Analysis↗
The economic impact of MELD on liver transplant centers.
Adoption of the model for end stage liver disease (MELD) system prioritized patients awaiting liver transplant (LT) by severity of illness including progressive renal dysfunction. Unfortunately, current reimbursement for LT is not adjusted by severity of illness or need for simultaneous liver-kidney transplantation (LKT). This study examines hospital cost and reimbursement for LT and LKT to determine the effect of MELD on transplant center (TC) financial outcomes given current reimbursement practices as well as DRG outlier threshold limits. LT was performed for 86 adults prior to and 127 following the implementation of MELD. Between the eras, there was a substantial increase in the average laboratory MELD score (17.1 to 20.7 p=0.004) and percentage of LKTs performed (5.8% to 17.3% p=0.01). Increasing MELD score was associated with higher costs ($4309 per MELD point p<0.001) and decreasing TC net income ($1512 per MELD point p<0.001). In patients not achieving the Medicare outlier status, predicted net loss was $17,700 for high-MELD patients and $19,133 for those needing LKT. In conclusion, contractual reimbursement agreements that are not indexed by severity of disease may not reflect the increased costs resulting from the MELD system. Even with outlier thresholds, Medicare reimbursement is inadequate resulting in a net loss for the TC.
Aged↗
Psychiatric and substance abuse disorder diagnoses as predictors of length of hospital stay.
The mental health and substance abuse components of AN-DRG 3 were examined using data from all inpatient separations in two Australian States over a two-year period. Assignment to a mental health or a substance abuse diagnosis related group (DRG) predicted about 20 per cent of the variability in average length of stay of patients treated for such conditions. Assignment to a substance abuse DRG was a much less robust predictor of length of hospital stay than assignment to a mental health DRG. There was little variation between years or States. Day-only intent patients were excluded, as were long-stay outliers identified using an inter-quartile range trimming process. Psychiatric DRGs are similar to a number of other non-surgically focused diagnosis related groups in their capacity to predict length of hospital stay. They are likely to remain an important component of casemix classification systems.
Health Services Research↗
Interhospital variations in admission severity-adjusted hospital mortality and morbidity.
In this study hospital admissions are categorized into admission severity groups based on key clinical findings. Severity of illness is determined again later in the hospital stay after treatment has been initiated. High severity on this second review is labeled major morbidity or morbidity, depending on the severity level, and these rates serve as a health outcome indicator along with in-hospital mortality. This study's findings show, for ten hospitals randomly selected from MedisGroups users, considerable interhospital variation in standardized mortality and morbidity ratios for ten frequently occurring DRGs on the adult medical service. After adjusting for admission severity and case mix, three of the ten study hospitals have a statistically significant (p less than .01) difference between the hospital's standardized mortality ratio and 1.0. Such a significant difference exists for the standardized major morbidity ratio of four hospitals and for the standardized morbidity ratio of three hospitals. At the DRG-specific level, our results show that 8.9 percent, 4.4 percent, and 15.0 percent of the hospital-specific mortality, major morbidity, and morbidity ratios, respectively, are statistically significant. Most hospital outliers have fewer deaths or morbid cases than expected. We caution that the study hospitals may not be representative of a larger group of U.S. hospitals.
Adult↗
Medicare program; prospective payment system for long-term care hospitals: annual payment rate updates and policy changes. Final rule.
This final rule establishes the annual update of the payment rates for the Medicare prospective payment system (PPS) for inpatient hospital services provided by long-term care hospitals (LTCHs). It also changes the annual period for which the rates are effective. The rates will be effective from July 1 to June 30 instead of from October 1 through September 30, establishing a "long-term care hospital rate year" (LTCH PPS rate year). We also change the publication schedule for these updates to allow for an effective date of July 1. The payment amounts and factors used to determine the updated Federal rates that are described in this final rule have been determined based on this revised LTCH PPS rate year. The annual update of the long-term care diagnosis-related groups (LTC-DRG) classifications and relative weights remains linked to the annual adjustments of the acute care hospital inpatient diagnosis-related group system, and will continue to be effective each October 1. The outlier threshold for July 1, 2003, through June 30, 2004, is also derived from the LTCH PPS rate year calculations. In addition, we are making an adjustment to the short-stay outlier policy for certain LTCHs and a policy change eliminating bed-number restrictions for pre-1997 LTCHs that have established satellite facilities and elect to be paid 100 percent of the Federal rate or when the LTCH is fully phased-in to 100 percent of the Federal prospective rate after the transition period.
Diagnosis-Related Groups↗
Innovations in case flow analysis: using midlier variance analysis.
This article presents the use of midlier and case flow analysis during a retrospective chart review to study the costs of hospital length of stay. The results showed that considerable savings can be realized by using these methods for one group of patients with the same diagnosis. We were able to redefine and track patients during their pre-, peri-, and postoperative period and estimated the time and cost opportunities for work flow improvement. We concluded that considerable savings are possible by extending the analysis to patients in other DRG groups.
Analysis of Variance↗
[DRG and gastrointestinal surgery].
The diagnosis-related-groups (DRG) is the cost-based system for hospital reimbursement. However, the proceeds does not coincide with the costs. Aim of the study was to identify the profit, which we could gained with 147, 155, 158, 162, 165, 198 gastrointestinal surgery DRG. 30 consecutive patients, undergone to surgery in Clinica Chirurgica of L'Aquila University, had been studied. We had calculated the daily costs of medical and nursing practice, diagnostic tests, drugs, hospitalization, surgical instruments for every patient's therapy. The DRG-proceeds had been correlated with the DRG-costs. The "major gastrointestinal surgery" had not profit (147 DRG: anterior resection of rectum = -354428 Pounds, Miles = -94020 Pounds; 155 DRG: total gastrectomy = -1920641 Pounds). On the contrary, "minimal surgery" had good profits (158 DRG: hemorroidectomy with local anestesia = 1469605 Pounds;162 DRG: sutureless groin hernioplasty = 1561200 Pounds; 198 DRG: videolaparochole-cystectomy: 1208807 Pounds). The study seems to demonstrate the disparity of the reimbursement system related to DRG. However, the surgeons, as managers, must employ warily the resources for producing DRG.
Gastrectomy↗
Hospital financial performance under the prospective payment system by type of admission: psychiatric versus medical/surgical.
We performed detailed simulations of DRG-based payments to general hospitals for treatment of nonexempt psychiatric and medical/surgical patients under Medicare's prospective payment system (PPS). We then compared these results to calculated costs for the same patients. Hospitals without specialized psychiatric units tend to fare better financially on their psychiatric than on their medical/surgical caseloads, although the levels of gain for these two types of patients are correlated. Hospitals with nonexempt psychiatric units generally have similar rates of gain on psychiatric and medical/surgical patients. Comparing psychiatric treatment in "scatter-bed" sites with that provided in nonexempt units, the higher rate of gain under PPS for treatment in scatter beds results largely from shorter lengths of stay. We discuss hospital behavior and the relationships between treatment of psychiatric illness under DRG-based payment and its treatment in exempt psychiatric units, which are excluded from DRG-based payment.
Computer Simulation↗
Financial implications of noninvasive positive pressure ventilation (NPPV).
Noninvasive positive pressure ventilation (NPPV) is effective in the treatment of acute and chronic respiratory failure. However, the costs and financial balance between costs and diagnosis-related group (DRG) reimbursement for patients with moderate to severe respiratory failure treated with NPPV are unknown. We examined the costs and DRG reimbursement for 27 patients receiving Medicare referred with moderately severe respiratory failure for NPPV to the ventilator rehabilitation unit (VRU) at Temple University Hospital. This unit is one of four Health Care Financing Administration chronic ventilator-dependent demonstration sites that evaluates patients for NPPV, instructs them in home NPPV use, emphasizes rehabilitation, and uses strict cost accounting methods. Nineteen patients were treated with NPPV in the ICU and then referred to the VRU, and 8 patients were directly admitted for NPPV to the VRU. Patients were (mean +/- SE) 69 +/- 9 years age, 14 had severe COPD, and 13 had various restrictive disorders. All were hypercapneic at the time of hospital admission (restrictive 60 +/- 15; obstructive 67 +/- 3 mm Hg, PaCO2) with impaired lung mechanics and limited functional status. Patients averaged 8 +/- 15 days in the ICU, or 8 +/- 4.7 days on the medical floor prior to VRU transfer. The VRU length of stay averaged 20 +/- 18 days, for a total length of stay of 29 +/- 21 days. After implementation of NPPV, all patients had an improvement in gas exchange while spontaneously breathing and functional status that was maintained in follow-up. At 1 and 2 years of follow-up, 74% and 63% of patients were alive, respectively. Eleven patients were admitted with DRG 475 (respiratory system diagnosis with ventilator support); however, 16 of 27 patients were admitted across five different non-475 DRG codes with reimbursement rates ranging from $2,673 to $4,215. After DRG and outlier reimbursement, a total deficit of $261,948 remained (average deficit $9,701 per patient). However, individual patient deficits ranged from $1,113 to $32,892. Eighty-two percent of patients treated with NPPV incurred substantial financial losses that were underreimbursed across all assigned DRGs, including DRG 475, the highest-weighted DRG. We conclude that patients with moderate to severe respiratory failure receiving NPPV demonstrate an improvement in functional status and gas exchange that is maintained in follow-up. In addition, patients treated with NPPV incur high costs that are currently underreimbursed by the present DRG system. Newer DRG payment scales that recognize NPPV as specific treatment should be implemented.
Aged↗
The effect of the new trauma DRGs on reimbursement.
Reimbursement for trauma care based on prospective payment has not been satisfactory. The Health Care Financing Administration introduced four new Multiple Significant Trauma (MST) DRGs in 1991 with the intention of covering patients who have had at least two body sites injured. To determine the effect if any on reimbursement, a sample of patients who were assigned the new DRGs over a 5-month period were analyzed. The analysis compared the calculated reimbursement for these 49 patients based on their total accumulated charges, DRG weights, and the average Medicare dollar blend along with the additional weight factor specific for the study facility. This analysis was compared with an additional analysis determining the reimbursement performed on the same patient sample but with DRG weights determined from DRGs derived from the 1989 DRG GROUPER/FINDER. During the 5-month study period, 5.5% of the patients discharged from the hospital has sustained at least one injury covered by ICD-9-CM codes. Of these, 49 (3.9%) were classified into one of the four new MST DRGs. The majority of patients were male (75.5%), the mean age was 31.8 years, and the total charges accumulated were $1,809,192.23. The calculated DRG-based reimbursement was $1,183,495.40, or 65.5% of the total charges. In the second part of the study, using the DRGs available in 1989 for the same sample of patients, the DRG-based reimbursement was $691,437.72, or only 38.2% of the accumulated charges.(ABSTRACT TRUNCATED AT 250 WORDS)
Diagnosis-Related Groups↗
Civilian Health and Medical Program of the Uniformed Services (CHAMPUS); FY97 DRG updates--DoD. Notice of DRG revised rates.
This notice provides the updated adjusted standardized amounts, DRG relative weights, outlier thresholds, and beneficiary cost-share per diem rates to be used for FY 1997 under the CHAMPUS DRG-based payment system. It also describes the changes made to the CHAMPUS DRG-based payment system in order to conform to changes made to the Medicare Prospective Payment System (PPS).
Diagnosis-Related Groups↗
Civilian Health and Medical Program of the Uniformed Services (CHAMPUS); DRG revised rates--DoD. Notice of DRG revised rates.
This notice provides the updated adjusted standardized amounts, DRG relative weights, outlier thresholds, and beneficiary cost-share per diem rates to be used for FY 1994 under the CHAMPUS DRG-based payment system. It also describes the non-regulatory changes made to the CHAMPUS DRG-based payment system in order to conform to changes made to the Medicare Prospective Payment System (PPS).
Diagnosis-Related Groups↗