If you want a great reference guide, you could get a DRG Desk Reference. For educational purposes, you wouldn't need a new one, so you could see if anyone has one they want to sell, or the DRG Guidebook.


The basics of Diagnosis- Related Groups (DRG's)

History:

Reimbursement for hospitals used to be based upon facility charges. This eventually led to a ton of fraud and abuse of the system. The facility wanted more money...simply up the charges (by the way, this isn't exclusive to hospitals, it happened with physicians too). Hence, the DRG system was introduced in 1983 for Medicare payments. It is a prospective payment system which in an easy nutshell says if your patient has X, we will pay Y. The amount varies per facility (I'll go into that later), but the amount the specific facility recieves for the same types of patients is the same in most cases. DRG payments are standardized by illness and treatment, which allows payers and providers to predict reimbursement before the care is provided (based on previous data).

DRG assignment is based on the following:

1. Principal and secondary diagnoses and procedure codes
2. Sex
3. Age
4. Discharge Status
5. Presence or absence of CC's (Complications or Cormorbidities)
6. Birthweight of neonates

For each inpatient record, the principal diangosis plus 8 additional (so nine diagnoses) and the principal procedure plus up to 5 additional procedures (six total procedures), age, sex, d/c dispo determine the DRG. Only one DRG is assigned to an inpatient stay, regardless of how long the patient was inhouse. If the patient is discharged and readmitted a few hours later, that is a separate admission and will be treated separately. Many facilites coder more than the 9dx/6 px for statistical purposes, so it is important that if they aren't using an encoder and manually determine the DRG or use a grouper only, that they place the significant dx/px that affect the DRG in the first 9 dx spots and first 6 px spots. Below that they don't count. DRG's aren't "sent" to Medicare, they are recalculated there.

What makes up a DRG?

As of 2003, there were 510 DRG's...I believe now for FY 2004 there are 518. A DRG is a grouping that classifies patients into clinically similar groups that have about the same resourse usage and length of stay patterns. These DRG's have a specific weight associated with them, called a DRG relative weight (DRG RW). There are separate surgical and medical DRG's.


How is reimbursement determined?
Each year, each hospital is assigned a case mix index (CMI). This is determined from the data that was submitted the previous fiscal year. The CMI is used to adjust the hospital base rate, which is then multiplied by the DRG relative weight to get the hospital payment.

DRG Reimbursement= DRG RW x Hospital Base Rate

Example:

Sample hospital base rate- $4566

DRG 078 Pulmonary Embolisms RW 1.3022 (FY 2003)

Reimbursement $4566 x 1.3022 = $4567.30


The case mix index is determined by averaging the DRG RW's from the previous year that were submitted. Each facility has a Medicare CMI and an overall CMI. The Medicare CMI is what is used for calculation purposes.

Example:

DRG 180 GI obstruction w/ CC .9443 submitted 30 times
DRG 181 GI obstruction w/o CC .5331 submitted 59 times
DRG 271 Skin Ulcers 1.0303 submitted 12 times

DRG RW sum =

.9443 x 30 = 28.329

.5331 x 59= 31.4529

1.0303 x 12= 12.3636
72.1455

72.1455/101 submitted cases = .7143

National hospital base rate= $4500 (hypothetical only, I haven't checked this years)

$4500 x .7143= $3214.35

The specific hospital base rate for the above facility is $3214.35. That multiplied by the DRG RW determines the reimbursement. This was only hypothetical, as I only used 3 DRG's when all the ones submitted to Medicare would determine the CMI.

Facilities such as transplant centers, trauma centers, or other "high risk" populations will be submitting DRG's with higher relative weights. These facilities will have a higher CMI because they treat sicker patients and have higher resourse consumptions. Therefore, patients going to Facility A, a trauma center, for a heart attack will have a higher reimbursement than patients going to Facility B, a standard non trauma facility because the hospital base rate is higher for hospital A than for hospital B.


This is by no means all inclusive, just the basics in a nutshell. Im sure I forgot something so I'll add it later, as well as APC info. As far as determining DRG's, just concentrate on your IP coding guidelines, and know the basics of DRG's. You won't have to manually assign them, just know about them and how to determine that you have the highest DRG for each case you are coding. The best resource for learning IP Coding Guidelines is Fay Brown's ICD-9-CM Coding Handbook. Although not an official source, it is published in cooperation with the Central Office on ICD-9-CM of the AHA.



Good luck!














Shannon