DRG Prospective, “All Payor Systems,” Financial Risk, and Hospital Cost in Pulmonary Medicine Non CC Stratified DRGs

Abstract

Previous work by our group had suggested that some pulmonary medicine diagnosis-related group (DRGs) did not adequately compensate for patients with multiple complications and comorbidities. Congress has recommended no major changes to pulmonary medicine DRGs along these lines. The purpose of this study was to analyze resource consumption in any of the seven noncomplicating conditions (CC), stratified pulmonary medicine DRGs using the new DRG prospective "all payor system" in effect at our hospital. Analysis of 858 pulmonary medicine patients by payor (Medicare, Medicaid, Blue Cross, and commercial insurance) in these non-CC stratified pulmonary medicine DRGs for a three-year period demonstrated that patients with more CCs per DRG for each payor generated higher total hospital costs, a longer hospital length of stay, a greater percentage of procedures per patient, financial risk under DRG payment, more outliers, and a higher mortality, compared to patients in these same DRGs with fewer CCs. Both hospital length of stay and total cost per patient (adjusted for DRG weight index) increased with CCs. Financial risk per patient under DRGs also increased as CCs accumulated. These findings suggest that new prospective DRG "all payor systems" may be inequitable to certain groups of patients or types of hospitals vis-a-vis the non-CC stratified pulmonary medicine DRGs. Many pulmonary medicine DRGs should be stratified by the numbers and types of CCs to more equitably reimburse hospitals under DRG all-payor systems.