An All-Payor Prospective Payment System (PPS) Based on Diagnosis-Related-Groups (DRG)

Abstract

To assess the financial impact of the new all-payor prospective payment system (PPS), data for 430 patients admitted to a Level I Trauma Center were compared to all hospital discharges (n = 35,309). Trauma patients had a LOS of 13.1 days, average Trauma Score of 15, and operating loss for trauma patients totalled $1,310,625. Trauma as compared to all patients showed a greater variance in LOS (6.3 vs. 2.0 days), a higher case mix index (CMI) (1.93 vs. 1.40), and a greater loss per case (-$3,404 vs. -$979), respectively. The trauma group DRG weights correlated with revenue (r = 0.89; p less than 0.0001); however, there was no relation to profit/loss. Review of trauma patients' records revealed inaccurate coding. Corrections led to an increase in reimbursement of $132,000. Five DRGs were added in 1989 for multiple significant trauma (MST). Using the 1989 grouper, 30 patients were reassigned, with an increase in reimbursement of $250,000. Although these strategies reduce operating deficit by 29%, reimbursement for trauma care must be addressed further.