Trends in Diagnosis Related Groups for Inpatient Admissions and Associated Changes in Payment From 2012 to 2016

Ty J Gluckman,Amir Yazdani,Kateri J Spinelli,Andrew Oseran,Karen E Joynt Maddox,Jason H Wasfy,Steven M Bradley,Abhinav Goyal,Gary Grunkemeier,Mansen Wang

doi:10.1001/jamanetworkopen.2020.28470

Abstract

Hospitals are reimbursed based on Diagnosis Related Groups (DRGs), which are defined, in part, by patients having 1 or more complications or comorbidities within a given DRG family. Hospitals have made substantial investment in efforts to document these complications and comorbidities. To examine temporal trends in DRGs with a major complication or comorbidity, compare these findings with 2 alternative measures of disease severity, and estimate associated changes in payment. This retrospective cohort study used data from the all-payer National Inpatient Sample for admissions assigned to 1 of the top 20 reimbursed DRG families at US acute care hospitals from January 1, 2012, to December 31, 2016. Data were analyzed from July 10, 2018, to May 29, 2019. Quarter year of hospitalization. The primary outcome was the proportion of DRGs with a major complication or comorbidity. Secondary outcomes were comorbidity scores, risk-adjusted mortality rates, and estimated payment. Changes in assigned DRGs, comorbidity scores, and risk-adjusted mortality rates were analyzed by linear regression. Payment changes were estimated for each DRG by calculating the Centers for Medicare & Medicaid Services weighted payment using 2012 and 2016 case mix and hospitalization counts. Between 2012 and 2016, there were 62 167 976 hospitalizations for the 20 highest-reimbursed DRG families; the sample was 32.9% male and 66.8% White, with a median age of 57 years (interquartile range, 31-73 years). Within 15 of these DRG families (75%), the proportion of DRGs with a major complication or comorbidity increased significantly over time. Over the same period, comorbidity scores were largely stable, with a decrease in 6 DRG families (30%), no change in 10 (50%), and an increase in 4 (20%). Among 19 DRG families with a calculable mortality rate, the risk-adjusted mortality rate significantly decreased in 8 (42%), did not change in 9 (47%), and increased in 2 (11%). The observed DRG shifts were associated with at least $1.2 billion in increased payment. In this cohort study, between 2012 and 2016, the proportion of admissions assigned to a DRG with major complication or comorbidity increased for 15 of the top 20 reimbursed DRG families. This change was not accompanied by commensurate increases in disease severity but was associated with increased payment.

Highlights

Per capita, the US spends more on health care than any other country worldwide,[1] and hospitals receive the largest share of these dollars.[2]
Within 15 of these Diagnosis Related Group (DRG) families (75%), the proportion of DRGs with a major complication or comorbidity increased significantly over time
The observed DRG shifts were associated with at least $1.2 billion in increased payment. In this cohort study, between 2012 and 2016, the proportion of admissions assigned to a DRG with major complication or comorbidity increased for 15 of the top 20 reimbursed DRG families

Summary

Introduction

The US spends more on health care than any other country worldwide,[1] and hospitals receive the largest share of these dollars.[2] In the US, hospitals are paid under the Inpatient Prospective Payment System, which was introduced in 1983 to reduce health care spending by predefining hospital reimbursement for given diagnoses and procedures.[3,4] The Inpatient Prospective Payment System categorizes each discharged patient into a Diagnosis Related Group (DRG) with an assigned payment weight that reflects the average resources used to treat that condition.[5] Payment weights for each DRG are updated annually to account for changes in operating and capital costs, labor and nonlabor inflation, hospital variability (eg, geography, presence or absence of quality programs, disproportionate share status), medical education, and potential upcoding.[6,7]. Hospital payment for DRGs with CCs or MCCs is often substantially greater. Payment for DRG 291 (heart failure and shock with MCC) is approximately twice that for DRG 293 (heart failure and shock without CC or MCC)

Methods

Results

Discussion

Conclusion