Literature DB >> 10313089

Medicare: short-stay hospital services, by leading diagnosis-related groups, 1983 and 1985.

V B Latta, C Helbing.   

Abstract

Assigning a code from any of the diagnosis-related groups to a short-stay hospital discharge covered by Medicare is tantamount to the Medicare payment to the hospital, subject to certain statutory adjustments. Therefore, diagnosis-related groups are the backbone of the prospective payment system implemented October 1, 1983. However, methods employed in the assignment of diagnosis-related groups have changed since the prospective payment system was introduced. The focus of this article is to note some of these changes in methods of assigning diagnosis-related groups, which may have caused some of the migrations, or shifts, from one diagnosis-related group to another during the period 1983-85.

Entities:  

Mesh：

Year:  1988        PMID： 10313089      PMCID： PMC4192922     

Source DB:  PubMed          Journal:  Health Care Financ Rev        ISSN： 0195-8631


Introduction

In this article, we present Medicare program data on diagnosis-related group (DRG) assignment and charges for the 66 most frequently reported (leading) DRG's assigned to short-stay hospital discharges for calendar year (CY) 1985. These are then compared with similar data for CY 1983. The data highlight changes in use and charges for inpatient services—changes that underscore differences in the method of DRG assignment in the year of implementation (1983) of the Medicare prospective payment system (PPS) compared with those in the second full year (1985) of PPS experience. It is important to note that 1983 was a transitional year for PPS because PPS became operational on October 1, 1983, with a phase-in period. Hence, comparisons of 1983 data with 1985 data are not true longitudinal comparisons but rather comparisons of DRG assignments under two different Medicare payment systems. Medicare has the responsibility and the hospital a financial incentive to improve the methods by which the DRG assignment is made because the DRG assignment determines the Medicare payment to hospitals under PPS. The PPS payment is expressed, in its simplest form, by the following formula: where the DRG weight is an index number reflecting the relative use of resources associated with each DRG; and the dollar rate is an average operating cost per discharge determined by the Health Care Financing Administration (HCFA), based on a blend (for 1983-85) of a federally established rate and a hospital-specific rate. Thus, a change in an assignment to a DRG with a higher (lower) DRG weight will result in a higher (lower) PPS payment. The process of assigning DRG's, and the subsequent Medicare payment, begins with the principal diagnosis. Beginning in 1980, reporting was required for the principal diagnosis plus up to four secondary diagnoses and the principal surgical procedure plus up to two secondary procedures. Coupled with the reporting revisions and changes in incentives to report, Medicare peer review organizations (PRO's) were mandated in 1983 to review medical coding for accuracy, to educate hospital providers, and to reinforce stringent adherence to coding guidelines. As illustrated in this article, these and other factors—e.g., changes in DRG definitions, medical practices, and the health care system—have produced notable shifts in the assignment of some DRG's. The most notable shift was the 563-percent increase in the number of discharges recorded for DRG 124—circulatory disorders, excluding acute myocardial infarction, with cardiac catheterization and complex diagnosis. DRG 124 climbed in rank order from 244th in 1983 (7,165 discharges) to 49th in 1985 (47,500 discharges). Prior to PPS, the use of cardiac catheterization was rarely reported, but now that the coding of this procedure affects the hospital payment under PPS, hospitals have learned to identify, code, and report cardiac catheterizations because of the probable financial incentives. Occasionally, medical coding rules and guidelines can artificially inflate and shift the number of discharges for certain DRG's, for instance, DRG 121—circulatory disorders, with acute myocardial infarction and cardiovascular complications, discharged alive. According to HCFA regulations governing the coding of acute myocardial infarction (AMI), if there is a repeat admission within 8 weeks, the principal diagnosis is coded as though the patient had a new AMI. Medicare program data show that there was a 235-percent increase in the assignment of DRG 121 during the 1983-85 period, from 35,095 discharges to 117,475. To rectify this problem with existing coding rules, the ICD-9-CM Coordination and Maintenance Committee has been working for more than 2 years to change the rules to reflect a definitive distinction between a new AMI and a subsequent readmission within 8 weeks for the preceding AMI. In addition, discharges assigned to some DRG's have increased or decreased in response to a focused review of DRG 88 by the PRO's (Office of the Inspector General, 1986). As a result, the PRO's have reinforced coding guidelines and conventions relating to specificity (that is, medical history is reported with a more uniform application of The International Classification of Diseases, 9th Revision, Clinical Modification (ICD-9-CM) (1980). In 1983, for example, there were 273,100 discharges assigned to DRG 88—chronic obstructive pulmonary disease—but only 172,545 discharges in 1985, a decrease of 37 percent. Many of these discharges probably were shifted to DRG 96—bronchitis and asthma, age greater than 69 and/or complications or comorbidity. DRG 96 rose from 143,405 discharges in 1983 to 186,930 in 1985, an increase of 20 percent. Another example of improved coding practices, as related to specificity, is shown in the decline in the number of discharges for DRG 132—atherosclerosis, age greater than 69 and/or complications or comorbidity. Discharges dropped from 212,490 in 1983 to 47,900 in 1985, a reduction of 78 percent. This reflects the fact that both physicians and medical coders, as instructed by the PRO's, are paying closer attention to DRG 132, looking for more specific diagnoses, which could change the DRG assignment. Stricter adherence to coding guidelines (Office of the Inspector General, 1986) probably caused DRG 82—respiratory neoplasms—to decline from 138,370 discharges in 1983 to 102,765 in 1985, a decrease of 26 percent. These discharges probably were shifted to DRG 410—chemotherapy—which increased 169 percent (from 39,590 discharges in 1983 to 106,510 in 1985). According to coding guidelines, if a patient with neoplasm of any kind is admitted to the hospital for the sole purpose of receiving chemotherapy, the treatment, not the condition, must be selected as the principal diagnosis. Finally, advances in medical technology have increased referrals for outpatient treatment, in lieu of inpatient hospital admission. The referrals have changed medical practice patterns and probably triggered the shifts and decreases for the following DRG's: DRG 39—lens procedures. DRG 134—hypertension. DRG 183—esophagitis, gastroenteritis, and miscellaneous digestive disorders, age 18-69, without complications or comorbidity. DRG 294—diabetes, age greater than 35. The decreases between 1983 and 1985 were 75 percent for DRG 39, 59 percent for DRG 134, 63 percent for DRG 183, and 32 percent for DRG 294. It should be noted, however, that there is no definitive explanation for the DRG's that declined or rose dramatically. There is not a direct relationship for most of these shifts; that is, there is no evidence that a particular principal diagnosis shifted to a particular DRG in every instance. Furthermore, because the selection of the principal diagnosis is critical to the assignment of the DRG and the PPS payment rate, HCFA, the PRO's, and the hospitals have been emphasizing improved and more accurate coding practices.

Diagnosis-related group assignment

The principal diagnosis is defined in the Uniform Hospital Discharge Data Set (UHDDS) as the “condition established after study to be chiefly responsible for occasioning the admission of the patient to the hospital for care.” Prior to PPS, this definition was not widely used by physicians, and some physicians were selecting the principal diagnosis based on the most severe, the most life threatening, or the most resource demanding. Upon implementation of PPS, HCFA and the PRO's instructed all physicians to use the UHDDS definition. The aim was to achieve consistency in reporting the principal diagnosis. Under PPS, the principal diagnosis must correspond to the condition that caused the admission of the patient, and this condition must be reported as the principal diagnosis and coded according to the ICD-9-CM. To determine DRG assignment under PPS, each principal diagnosis is first classified into one of the 23 mutually exclusive major diagnostic categories (MDC's). (All MDC's, except MDC 23, are related to the human body systems. MDC 23 includes principal diagnoses for factors influencing health status and other health services, such as ill-defined medical conditions—edema, pallor, debility, etc.—annual physical examinations; or the administration of vaccines). A physician panel developed MDC's to insure that DRG's are clinically coherent; that is, the individual DRG should correspond to a single organ system or etiology and be associated with a particular medical specialty. For example, principal diagnoses denoting heart diseases or conditions are generally assigned to MDC 5, diseases and disorders of the circulatory system, which encompasses DRG's 103-145. An exception to a normal MDC 5 coding classification, however, could be a record showing a principal diagnosis of heart failure and a surgical procedure of cholecystectomy. Because the cholecystectomy is unrelated to the principal diagnosis, the record will be assigned to DRG 468—unrelated operating room procedures. Similarly, any record with a principal diagnosis that is invalid as a discharge diagnosis will be assigned to DRG 469, and ungroupable records will be assigned to DRG 470. Most of the MDC's are partitioned into surgical versus nonsurgical categories because this partition captures significant clinical differences that translate into significant resource use differences. Subsequently, discharges may be classified into separate DRG's on the basis of the following: Age (those under 18 years of age, those 18-69 years of age, and those 70 years of age or over). The presence of secondary diagnoses. Discharge status (living or deceased). After matching these specific patient characteristics, the discharge is partitioned into the appropriate DRG. Although there is some variation among patients within a DRG, there should be an overall similarity across patients in the same DRG. The DRG system, therefore, should provide equitable payments, in that comparable services should be comparably reimbursed (Helbing, 1985). In terms of characteristics and objectives, the DRG system was designed according to the following criteria: Limitation of DRG classification categories to less than 500. Homogeneity of resource intensity within each DRG. Clinical coherence of each DRG. Patient information used in the definition of the DRG's limited to that collected on hospital abstract systems. The set of DRG's representative of the entire range of hospital inpatients. Each DRG large enough to permit comparative analysis across hospitals.

Diagnosis-related groups: Legislative background

From July 1, 1966, through September 30, 1983, without regard for diagnosis, hospitals received reimbursement from the Medicare program for the reasonable cost of inpatient services rendered to Medicare beneficiaries. Although hospitals were required to include a principal diagnosis in the bills submitted for Medicare patients, the diagnosis did not directly affect the amounts paid by Medicare. The inflationary character of this retrospective cost-based payment system became apparent during the early years of the Medicare program. No incentives existed for cost containment, and, consequently, Medicare costs were continually escalating. This constant rise in expenditures challenged the fiscal viability of the Medicare program. Congress, thereby, enacted provisions contained in the 1972 amendments to the Social Security Act (Public Law 92-603), which authorized the Secretary to engage in a broad program of experiments and demonstration projects to determine the feasibility of making prospective payments to Medicare providers. In 1975, in accordance with this legislation, the Health Care Financing Administration (HCFA) awarded a contract to Yale University to develop a Medicare-specific DRG patient classification system that could be used to support a hospital inpatient prospective payment system. The DRG system was first designed by Yale University in the late 1960's to create an effective framework for monitoring and evaluating hospital performance and quality of care (Fetter et al., 1980). In 1979, hospitals in the United States began coding all diagnostic and surgical procedure information using the ICD-9-CM; HCFA, as a result, awarded a followup contract to Yale to create a new and improved set of Medicare-specific DRG definitions based on ICD-9-CM (Fetter et al., 1980). The new Medicare-specific DRG patient classification system was subsequently developed by Yale, tested in the early 1980's, and found to be the most viable system for measuring a hospital's output and implementing a prospective payment system. The Tax Equity and Fiscal Responsibility Act of 1982 (Public Law 97-248) required the Secretary of the Department of Health and Human Services (DHHS) to develop, in consultation with Congress, a legislative proposal for Medicare payments to hospitals on a prospective basis. In addition, a network of 54 utilization and quality control PRO's was established to review health care services provided to Medicare patients to assure that such services are reasonable and medically necessary, that the quality meets professionally recognized standards, and to determine if inpatient services could be provided in an appropriate manner and more economically on an outpatient basis. The 1983 amendments to the Social Security Act (Public Law 98-21), enacted April 20, 1983, provided for a prospective payment system, based on DRG's, for short-stay hospitals certified to furnish inpatient care to Medicare beneficiaries. The law also modified the PRO program, extending its functions to include the review of the validity of diagnostic and procedural information, quality of care, appropriateness of admissions, and appropriateness of care for outlier cases. The implementation of the Medicare prospective payment system began on October 1, 1983. In May 1983, an award was made by HCFA to Health Systems International (HSI) to evaluate and modify the Yale DRG product. In June 1983, the revised DRG's were released for use in Medicare PPS beginning October 1, 1983. Because DRG assignment affected program payments to the hospitals, DRG's came under intense investigation by hospitals after PPS became effective. Thus, in July 1984, HCFA again contracted HSI to maintain and update the software and definitions used to classify cases in accordance with HCFA policy. The Secretary was mandated by Congress (Public Law 98-21) to adjust the DRG weighting factors (recalibration) for fiscal year 1986 and for at least 4 years thereafter to reflect changes in treatment patterns, technology, and other factors affecting hospital resource utilization. The Prospective Payment Assessment Commission (ProPAC) was established by Congress to consult with the Secretary and make recommendations on the need for adjustments to the Medicare DRG's or the creation of new DRG categories based on its evaluation of new practices, technologies, and treatment modalities. ProPAC was required to report to Congress on its evaluation of adjustments made by the Secretary. Payments in addition to the DRG rate are made for atypical (outlier) cases that have unusually long stays or exceptionally high costs when compared with most discharges classified in the same DRG. The additional payment approximates the marginal costs of care beyond the outlier cutoff criteria (days or dollar amounts). The total proportion of outlier payments cannot be less than 5 percent or more than 6 percent of total DRG-related payments in any year. The DRG system is, therefore, a fluid system. As more data are collected and as medical technology advances, the DRG's will be reviewed and revised as mandated by Congress. More detailed information on DRG development can be found in DRGs, Diagnosis Related Groups, Fourth Revision, Definitions Manual (1986).

Summary

The PPS placed a price tag on hospital use by Medicare beneficiaries prior to the actual hospitalization and provided an incentive for cost containment. “The change from cost-based reimbursement to prospective payment represents a fundamental change in the role of the Medicare program within the health care system. Rather than reimbursing the hospital for actual costs incurred, the Medicare program now pays a fixed price for a known and defined product—the hospital stay. PPS is designed to change hospital behavior by directly altering the economic incentives facing hospital decision-makers” (Guterman, 1987). It is difficult, however, to analyze or develop meaningful inferences about PPS because of the rapidly changing health care industry. These changes include intensified cost-containment efforts among other public and private payers, the increased supply of physicians, and the increasing availability of alternative arrangements for the provision of and payment for health care. Thus, both desirable and undesirable effects that might be consistent with expectations about PPS may actually be caused by other factors or the joint product of PPS and several other factors (Federal Register, 1985; Guterman, 1987). The PPS environment and the way DRG's are assigned may have influenced hospital behavior in the following ways: Hospitals are probably more careful and selective in the admissions process. The decline in the annual number of short-stay hospital discharges following the implementation of PPS was the first in the history of the Medicare program. The reasons for this decline are not fully understood; admissions for the population as a whole also declined (Guterman, 1987). Hospitals may be more prudent in patient-care practices. The average length of stay declined from 9.8 days in CY 1983 to 8.6 days in CY 1985. Many medical tests, examinations, and treatments that were normally performed after the hospital admission are now being performed on an outpatient basis, prior to admission. Hospitals are changing medical practice patterns by channeling selected surgical procedures to alternative treatment sites; if feasible, the procedures are performed on an outpatient basis. Hospitals may be avoiding unnecessary admissions by referring patients with certain medical conditions to outpatient clinics, where treatment of the condition is judged to be safe, effective, and preferable to inpatient care. Hospitals, in cooperation with HCFA and the PRO's, are improving the reporting and coding of the principal diagnosis. Hospitals are responding quickly to stimuli induced by modifications to DRG weights. In this article, annual rates of use and charges are arrayed by area of provider (Table 1) to give an overview of program exprience during the 1983-85 period. For the 66 leading DRG's, additional data compare the number of discharges, average length of stay, and average total charges (Table 2); length-of-stay statistics—mean, standard deviation, coefficient of variation, and selected percentiles (Table 3); and percent distributions for the types of inpatient accommodation and ancillary services (Table 4). Data relating specifically to hospitals operating under PPS during 1985 are arrayed by the leading DRG's and type of PPS discharges—including day and cost outlier discharges (Table 5).
Table 1

Rates, means, and percent changes for the number of discharges, total days of care, and charges for Medicare beneficiaries discharged from participating short-stay hospitals, by area of provider: 1983-85

Area of provider1Number of dischargesTotal days of careCharges
Per 1,000 enrollees1Percent change 1983-85Per 1,000 enrollees1Percent change 1983-85Per dischargePercent change 1983-85Per enrollee1Percent change 1983-85Per dischargePercent change 1983-85
1983198519831985198319851983198519831985
All areas2390328−15.93,8372,832−26.29.88.6−12.2$1,853$1,748−5.7$4,749$5,33212.3
United States396333−15.93,8992,876−26.29.88.6−12.21,8891,781−5.74,7665,35212.3
Northeast354322−9.04,3093,539−17.912.211.0−9.81,9421,940−0.15,4816,0249.9
North Central411338−17.84,0922,804−31.510.08.3−17.01,9101,698−11.14,6485,0278.2
South438353−19.44,0022,847−28.99.18.1−11.01,8071,702−5.84,1244,81516.8
West351300−14.52,8462,154−24.38.17.2−11.11,9441,845−5.15,5406,15611.1
New England357313−12.33,9443,152−20.111.110.1−9.01,7601,732−1.64,9355,53212.1
 Connecticut309273−11.73,2862,614−20.510.69.6−9.41,4951,5131.24,8455,53514.2
 Maine379339−10.63,3622,982−11.38.98.8−1.11,6541,570−5.14,3704,6326.0
 Massachusetts384329−14.34,6343,595−22.412.110.9−9.92,0742,023−2.55,4066,14413.7
 New Hampshire353319−9.63,2062,58919.29.18.1−11.01,3261,3280.23,7604,16210.7
 Rhode Island322309−4.03,4413,164−8.010.710.2−4.71,4581,5123.74,5324,8887.9
 Vermont361305−15.53,6312,690−25.910.18.8−12.91,3371,255−6.13,7034,11611.2
Middle Atlantic354325−8.24,4313,670−17.212.511.3−9.62,0042,0100.35,6666,1839.1
 New Jersey334295−11.74,1403,434−17.112.411.6−6.51,4741,4850.74,4105,02914.0
 New York333312−6.34,6584,084−12.314.013.1−6.41,9491,9871.95,8576,3738.8
 Pennsylvania389359−7.74,2453,256−23.310.99.1−16.52,3502,333−0.76,0476,4987.5
East North Central398330−17.14,0792,834−30.510.38.6−16.51,9991,752−12.45,0255,3155.8
 Illinois406340−16.34,2973,094−28.010.69.1−14.22,3382,053−12.25,7586,0334.8
 Indiana413325−21.34,1352,700−34.710.08.3−17.01,6061,411−12.13,8934,34911.7
 Michigan394332−15.74,0612,882−29.010.38.7−15.52,2102,019−8.65,6086,0808.4
 Ohio398328−17.64,1522,778−33.110.48.5−18.31,9431,626−16.34,8854,9641.6
 Wisconsin371311−16.23,4282,447−28.69.27.9−14.11,4411,270−11.93,8844,0775.0
West North Central439355−19.14,1192,740−33.59.47.7−18.11,7221,582−8.13,9254,45513.5
 Iowa409321−21.53,5772,408−32.78.77.5−13.81,4201,263−11.13,4693,93813.5
 Kansas436353−19.04,7682,579−45.910.97.3−33.01,6201,440−11.13,7194,0769.6
 Minnesota414309−25.43,6552,234−38.98.87.2−18.21,5511,305−15.93,7434,22312.8
 Missouri447396−11.44,4133,377−23.59.98.5−14.12,0892,075−0.74,6715,23812.1
 Nebraska478354−25.94,1442,633−36.58.77.4−14.91,7031,475−13.43,5644,16716.9
 North Dakota537432−19.64,6493,178−31.68.77.4−14.91,9281,868−3.13,5914,32620.5
 South Dakota468395−15.64,0982,659−35.18.86.7−23.91,4801,352−8.63,1633,4228.2
South Atlantic405318−21.53,8582,686−30.49.58.5−10.51,8041,644−8.94,4495,17816.4
 Delaware334310−7.23,7992,795−26.411.49.0−21.11,5921,567−1.64,7635,0536.1
 Dist. of Columbia475444−6.56,3535,267−17.113.411.9−11.24,2174,2500.88,8809,5757.8
 Florida402325−19.23,6962,651−28.39.28.2−10.92,0991,985−5.45,2266,11517.0
 Georgia458406−11.43,7153,057−17.78.17.5−7.41,6251,7215.93,5524,24319.5
 Maryland371328−11.64,1673,203−23.111.29.8−12.51,6321,525−6.64,3934,6505.9
 North Carolina2396253−36.13,8752,252−41.99.88.9−9.21,3971,078−22.83,5304,26220.7
 South Carolina366329−10.13,4902,861−18.09.58.7−8.41,3841,4696.13,7764,46118.1
 Virginia2393224−43.03,9782,015−49.310.19.0−10.91,6941,085−36.04,3114,85312.6
 West Virginia471387−17.84,2662,946−30.99.17.6−16.51,7481,634−6.53,7114,22113.7
East South Central482416−13.74,3333,316−23.59.08.0−11.1$1,831$1,8742.3$3,796$4,50218.6
 Alabama480388−19.24,1403,068−25.98.67.9−8.12,0251,981−2.24,2175,11121.2
 Kentucky431399−7.43,8983,129−19.79.07.8−13.31,4561,60310.13,3784,01318.8
 Mississippi495438−11.54,3453,212−26.18.87.3−17.01,5221,457−4.33,0713,3288.4
 Tennessee518442−14.74,8333,729−22.89.38.4−9.72,1342,2224.14,1215,02722.0
West South Central467377−19.34,0342,823−30.08.67.5−12.81,7951,688−6.03,8414,48216.7
 Arkansas485401−17.33,8432,787−27.57.97.0−11.41,4751,477−3.93,0433,53416.1
 Louisiana462427−7.64,0103,232−19.48.77.6−12.61,9312,0455.94,1764,79014.7
 Oklahoma439339−22.83,7242,541−31.88.57.5−11.81,7561,517−13.64,0004,47411.9
 Texas472366−22.54,1692,784−33.28.87.6−13.61,8391,690−8.13,8954,61618.5
Mountain362313−13.52,9362,199−25.18.17.0−13.61,5981,569−1.84,4145,01713.7
 Arizona348321−7.82,9632,412−18.68.57.5−11.81,7161,7562.34,9385,47410.9
 Colorado387311−19.63,3242,230−32.98.67.2−16.31,7181,528−11.14,4404,90510.5
 Idaho341292−14.42,3971,787−25.47.06.1−12.91,0721,028−4.13,1463,52612.1
 Montana400339−15.32,9892,143−28.37.56.3−16.01,3571,228−9.53,3933,6186.6
 Nevada393326−17.03,1642,488−21.48.07.6−5.02,7112,8525.26,8988,75226.9
 New Mexico362318−12.22,8742,155−25.07.96.8−13.91,4471,4661.33,9924,60715.4
 Utah317263−17.02,3601,721−27.17.46.5−12.21,2001,129−5.93,7804,29113.5
 Wyoming359341−5.02,8572,232−21.98.06.5−18.81,1551,1953.53,2153,5059.0
Pacific347295−15.02,8152,138−24.08.17.2−11.12,0631,941−5.95,9426,57610.7
 Alaska320296−7.52,6382,214−16.18.27.5−8.51,5721,6333.94,9155,51412.2
 California348298−14.42,8992,227−23.28.37.5−9.62,3082,174−5.86,6317,2859.9
 Hawaii262246−6.12,5082,062−17.89.68.4−12.51,3671,3740.55,2105,5917.3
 Oregon355295−16.92,5831,815−29.77.36.1−16.41,4481,314−9.34,0774,4499.1
 Washington352287−18.52,5801,898−26.47.36.6−9.61,3031,247−4.33,6994,34617.5
Residence unknown396333−15.93,8992,876−26.29.88.6−12.21,8891,781−5.74,7665,35212.3
Other areas188178−5.31,7001,459−14.29.08.2−8.939143511.32,0772,44617.8
Puerto Rico189179−5.31,6931,458−13.99.08.2−8.939043511.52,0702,43417.5

Rates are based on area of residence of the enrollees.

ln 1985, data for some States, especially Virginia and North Carolina, are understated because of discharge bills returned to the intermediary.

SOURCE: Health Care Financing Administration, Bureau of Data Management and Strategy: Data are from the Medicare Statistical System; data development by the Office of Research and Demonstrations.

Table 2

Medicare short-stay hospital discharges, average length of stay, and average charge per discharge, by the 66 leading diagnosis-related groups (DRG's): 1983 and 1985

DRG code numberDischargesRank orderAverage length of stayAverage charge per discharge
NumberPercent change 1983-8519831985Percent change 1983-8519831985Percent change 1983-85
1983198519831985
Total, all DRG's11,547,30010,027,010−13.2——9.88.6−12.2$4,749$5,33212.3
Leading DRG's7,045,3957,079,3600.5——9.88.5−13.34,6735,0718.5
005143,88056,53528.8544210.98.5−22.07,1757,124−0.7
01263,94543,830−31.5355513.913.1−5.05,0465,73913.7
014299,445312,2854.34515.011.1−24.76,0465,674−6.2
015158,820167,9755.814117.15.7−19.72,7672,719−1.7
02441,62058,66040.960417.96.6−16.53,4833,6544.9
0391438,680108,270−75.32232.52.1−16.02,2202,4068.4
07925,76569,945171.5993614.512.6−13.18,2869,18610.9
082138,370102,765−25.7172510.99.4−12.85,0075,2695.2
08763,53598,19054.5362611.29.6−13.47,6058,2578.6
088273,100172,545−36.8699.78.2−15.54,8455,0524.3
089262,795347,27532.17310.99.0−17.45,0545,1772.4
096143,405186,93030.41688.17.0−13.63,4353,83811.7
09936,07043,28020.071577.75.8−23.43,8823,406−12.3
110135,01059,99571.4753917.415.4−11.514,36215,90710.8
112135,26036,9054.7736414.011.3−18.610,4889,834−6.2
116148,12552,4959.1514410.58.4−19.011,93312,0891.3
12135,095117,475234.7742112.911.5−10.97,3267,5362.9
122195,375142,820−26.9111611.99.2−21.85,9015,299−10.2
12356,26070,73525.743356.15.5−9.85,5826,0839.0
1247,16547,500562.9243499.16.5−28.66,8155,773−15.3
12531,16080,840159.486295.43.3−38.94,4373,132−29.4
127457,470498,3058.91110.18.1−18.84,5594,502−1.3
12837,91040,1355.9676110.79.2−14.03,4863,6203.8
13097,65580,640−17.4263010.07.6−24.04,0893,646−10.8
132212,49047,900−77.59488.56.4−23.53,6343,516−3.2
134118,71048,665−59.021467.66.1−19.72,8922,762−4.5
138179,280209,55516.91267.55.9−20.03,7943,464−8.7
140273,360348,94027.6526.55.2−20.03,0492,884−5.4
14170,41592,69031.632276.55.3−18.52,7502,732−0.7
14388,37077,595−12.229325.53.9−29.12,7162,380−12.4
14415,69542,280169.4151599.38.1−12.95,1915,118−1.4
148174,520116,97057.0312218.816.5−12.2$12,062$13,40111.1
154137,05546,34525.1695116.616.4−0.611,22715,41437.3
157127,29040,48048.395607.46.0−17.63,3123,5727.9
161169,54575,3858.433336.24.7−24.22,9152,857−2.0
17265,26043,420−33.5345612.29.9−18.95,3134,956−6.7
174110,005150,94037.224158.76.9−20.74,2274,000−5.4
18052,17568,96032.246378.87.1−19.33,7303,439−7.8
182371,795313,140−15.8347.05.9−15.72,6362,7775.3
183130,92548,290−63.118476.14.6−24.62,4352,141−12.1
18858,99547,475−19.540507.96.2−20.53,5963,503−2.6
197162,65572,79016.2383413.410.7−19.47,2877,3721.2
20751,83549,380−4.747458.36.6−20.53,5903,446−4.0
2091117,460164,80040.3221217.514.2−18.99,85510,6418.0
210196,570121,10025.4271918.615.1−18.38,5638,7912.7
23652,58044,095−16.1455416.611.8−28.35,5574,616−16.9
23943,88061,27539.6553812.210.0−18.04,2764,230−1.1
243208,935169,155−19.010109.27.3−19.82,9972,897−3.3
25342,78535,950−16.057659.57.3−22.13,0852,847−7.7
257124,23035,85048.0106669.77.5−22.74,5324,479−1.2
27747,73559,61524.9524010.88.6−19.44,0063,957−1.2
294177,220119.765−32.413209.78.0−17.53,4693,4930.7
296125,515208,12065.819710.07.7−23.03,9093,663−6.3
310141,39555,02032.961436.45.3−17.23,1743,3435.3
31655,23543,030−22.1445811.19.3−16.26,4715,750−11.1
320124,600140,45012.720179.38.0−14.03,6193,9539.2
3361115,725160,85539.023138.97.0−20.24,1744,109−1.6
39599,69584,385−15.425288.26.3−23.23,3253,223−3.1
40357,25045,730−20.1425211.411.40.05,7457,22325.7
41039,590106,510169.063243.73.2−10.81,9182,22215.0
41642,02580,07090.5593113.410.6−20.17,5986,995−7.9
42963,18044,195−30.0375313.612.0−8.83,7154,34617.0
43095,755130,87036.7281817.216.3−4.15,0205,57911.1
442121,37539,41084.41126313.09.6−25.48,6428,471−2.0
44932,84039,55520.485627.46.1−17.63,0623,2987.7
468223,530152,025−32.081416.715.1−7.810,04310,9298.8
All other DRG's4,501,9052,947,650−34.5——9.98.9−9.14,8685,95822.4

Indicates surgical DRG's.

NOTE: Definitions of DRG code numbers are given in “Technical note.”

SOURCE: Health Care Financing Administration, Bureau of Data Management and Strategy: Data are from the Medicare Statistical System; data development by the Office of Research and Demonstrations.

Table 3

Length-of-stay statistics and selected length-of-stay percentiles for Medicare beneficiaries discharged from short-stay hospitals, by the 66 leading diagnosis-related groups (DRG's): 1983 and 1985

DRG code number1Length-of-stay statisticsSelected length-of-stay percentiles
MeanStandard deviationCV210th25th50th75th90th
All DRG's39.811.31.152.03.66.812.120.0
All DRG&s8.69.71.131.93.46.210.516.9
005110.98.90.824.15.58.313.020.1
0058.56.90.813.64.66.510.115.3
01213.916.51.182.95.09.016.228.7
01213.116.31.252.64.58.315.328.8
01415.017.41.162.65.410.218.230.8
01411.113.31.202.54.78.113.121.3
0157.18.01.121.93.15.38.513.4
0155.77.11.251.72.74.46.910.3
0247.99.41.191.93.25.59.315.3
0246.67.41.131.82.94.87.812.6
03912.51.80.701.51.62.22.83.6
0392.11.90.910.91.62.02.43.1
07914.513.50.933.26.411.218.428.5
07912.611.20.893.46.19.915.523.8
08210.911.51.051.83.67.714.223.3
0829.49.61.021.83.67.012.119.4
08711.213.61.221.84.27.913.521.8
0879.610.41.082.04.17.211.718.5
0889.79.81.092.94.57.311.518.2
0888.28.41.022.74.26.49.614.7
08910.910.10.933.35.58.513.220.2
0899.07.90.883.14.97.410.915.9
0968.16.70.832.94.36.69.814.4
0967.05.40.772.73.95.88.512.3
0997.78.81.151.72.95.19.115.1
0995.86.31.091.62.64.47.211.2
110117.413.30.777.010.114.120.731.3
11015.412.50.816.28.912.217.927.9
112114.012.70.913.06.410.817.527.7
11211.311.31.002.04.48.414.023.1
116110.58.20.783.65.58.613.219.1
1168.47.00.842.94.46.910.415.3
12112.98.40.653.77.811.716.122.7
12111.57.30.644.67.410.314.019.1
12211.98.00.673.77.410.814.619.9
1229.26.40.703.26.18.811.414.5
1236.19.81.600.51.32.67.415.2
1235.58.81.600.51.32.66.713.2
1249.19.00.981.82.96.711.919.0
1246.56.91.051.52.34.98.613.4
1255.46.21.161.61.92.76.612.5
1253.33.10.941.01.62.23.77.0
12710.110.00.992.84.77.612.319.4
1278.17.90.982.64.16.49.915.1
12810.76.90.654.66.79.312.917.5
1289.25.30.584.36.28.311.014.6
13010.012.51.251.83.57.112.119.5
1307.68.91.181.82.75.99.614.3
1328.58.81.042.13.76.310.216.1
1326.47.31.141.83.04.87.611.7
1347.67.50.992.23.55.79.214.4
1346.18.11.341.92.94.67.211.0
1387.57.81.041.93.35.69.114.3
1385.95.71.181.72.84.67.311.1
14036.55.70.882.13.35.28.011.9
1405.24.30.831.92.94.36.49.1
1416.56.51.001.82.94.98.012.3
1415.35.81.101.72.64.26.49.5
1435.55.91.091.62.44.06.610.4
1433.93.30.851.62.13.24.87.1
1449.39.20.982.03.86.911.918.6
1448.17.80.972.03.76.310.115.4
148118.812.00.649.011.515.722.332.3
14816.511.70.717.910.013.319.128.2
154116.613.20.794.98.313.220.831.7
15416.413.40.825.38.512.920.230.8
15717.47.20.972.03.25.49.214.6
1576.06.61.101.62.74.57.411.6
16116.25.10.832.63.54.97.311.0
1614.74.30.911.52.53.85.58.4
17212.213.71.122.03.98.015.626.6
1729.911.21.131.83.66.712.220.8
1748.79.51.082.44.16.610.316.4
1746.96.30.912.23.65.68.312.4
1808.810.61.201.93.56.210.417.5
1807.17.41.041.93.35.48.413.2
1827.07.11.012.03.35.38.413.1
1825.95.50.941.93.04.67.210.7
1836.16.11.001.82.94.77.311.1
1834.63.60.791.52.43.85.88.2
1887.910.91.391.82.55.09.215.7
1886.27.41.181.52.34.47.712.7
197113.48.20.616.58.311.316.022.3
19710.77.40.695.36.78.812.417.5
2078.38.10.972.33.86.310.216.0
2076.66.10.921.93.35.28.112.3
209117.510.00.579.612.015.419.827.2
20914.28.20.577.99.912.616.021.3
210118.612.00.648.911.915.821.830.6
21015.111.60.777.09.512.717.024.3
23616.618.51.122.86.712.419.731.5
23611.814.51.232.44.98.413.422.3
23912.211.60.952.95.29.115.423.8
23910.09.10.912.94.87.812.319.2
2439.28.10.882.64.47.411.517.1
2437.36.30.871.93.56.09.213.5
2539.510.71.131.93.66.611.419.2
2537.310.31.411.62.95.18.513.8
25719.76.30.664.96.48.411.115.2
2577.54.60.613.74.96.78.811.9
27710.810.20.953.45.38.112.819.7
2778.68.10.943.24.77.010.215.0
29439.79.91.023.14.87.511.417.5
2948.08.01.002.84.26.49.313.9
29610.011.91.192.54.16.911.719.6
2967.78.81.142.23.55.89.014.2
31016.46.71.041.82.84.67.712.8
3105.35.61.041.52.43.96.410.3
31611.114.51.301.53.47.213.723.6
3169.39.81.051.63.66.911.718.7
3209.38.70.942.84.57.211.116.7
3208.08.01.002.94.36.59.513.8
33618.96.10.694.35.47.210.215.1
3367.05.10.733.54.55.98.011.6
3958.29.21.121.63.26.010.015.8
3956.37.61.201.72.54.77.812.0
40311.412.71.111.63.57.514.625.6
40311.412.61.111.73.77.514.525.2
4103.74.41.190.71.82.44.56.7
4103.23.41.050.71.82.44.36.0
41613.414.21.062.35.910.316.226.2
41610.69.40.892.45.48.713.119.5
42913.617.31.272.84.98.414.824.9
42912.016.11.342.64.57.714.123.9
43017.217.10.993.26.412.722.535.6
43016.315.70.963.06.312.521.733.4
442113.014.71.131.83.48.416.829.0
4429.612.41.291.72.55.712.021.5
4497.47.61.021.73.15.59.114.5
4496.16.81.121.92.64.47.411.7
46816.716.71.002.96.312.321.334.3
46815.117.81.182.45.510.718.730.8
All other9.911.81.201.93.46.611.920.4
All other8.910.71.201.73.16.010.818.5

Indicates surgical DRG's.

CV Indicates coefficient of variation and is equal to the standard deviation divided by the mean.

Data in the first row of each set of DRG numbers are for 1983; the second row shows data for 1985.

NOTE: Definitions of DRG code numbers are given in “Technical note.”

SOURCE: Health Care Financing Administration, Bureau of Data Management and Strategy: Data are from the Medicare Statistical System; data development by the Office of Research and Demonstrations.

Table 4

Total charges and percent distribution of charges incurred for Medicare beneficiaries discharged from short-stay hospitals, by type of service and the 66 leading diagnosis-related groups (DRG's): 1983 and 1985

DRG code number1Total charges in millionsAll services2Type of service
AccommodationAncillary
Routine careIntensive or coronary careTotalOperating roomPharmacyLaboratoryRadiologySuppliesAnesthesiaInhalation therapyPhysical therapyOccupational therapySpeech pathologyOther
Percent distribution
All DRG's3 1983$54,835100.035.96.855.96.111.311.64.77.51.05.31.20.20.16.9
All DRG's 198553,462100.031.97.959.96.213.011.55.48.31.06.01.20.20.16.9
Leading DRG's32,920100.036.17.555.25.011.111.74.77.50.85.81.30.20.17.0
Leading DRG's35,899100.032.58.458.84.713.011.95.58.10.76.61.10.20.17.0
0051315100.025.511.062.715.88.68.88.08.02.93.80.70.20.15.9
005403100.021.211.767.017.49.68.18.99.43.13.90.50.10.15.7
012323100.052.43.442.60.57.28.44.24.70.13.35.12.60.95.7
012252100.052.53.043.90.46.37.55.13.80.12.66.74.61.75.0
0141,811100.043.86.448.50.39.79.54.46.10.15.44.01.40.76.8
0141,772100.039.77.552.40.210.810.27.55.90.15.93.31.10.76.8
015439100.045.34.049.91.35.911.311.24.10.22.31.40.30.111.7
015457100.041.04.554.40.56.412.015.64.10.12.51.20.20.111.6
024145100.041.17.450.90.38.713.66.25.20.14.91.20.20.110.4
024214100.035.98.355.30.210.014.28.75.50.15.90.90.10.19.7
0391974100.021.90.377.733.211.04.91.619.14.40.5(4)(4)(4)3.1
039260100.019.60.479.934.511.34.51.420.53.90.6(4)(4)(4)3.1
079213100.031.26.960.20.717.712.03.57.70.212.80.70.1(4)4.7
079643100.026.77.865.20.621.712.13.77.50.114.90.6(4)(4)3.8
082693100.040.73.355.02.213.511.07.15.30.48.90.50.1(4)6.0
082542100.038.73.457.61.714.011.510.04.90.39.70.4(4)(4)5.0
087$483100.020.116.461.30.313.313.13.37.20.116.80.50.1(4)6.5
087811100.017.316.566.00.316.112.43.57.00.120.00.4(4)(4)6.0
0881,323100.032.66.958.60.313.211.03.24.80.119.90.70.1(4)5.3
088872100.031.37.361.10.314.911.53.54.60.120.80.50.1(4)4.9
0891,328100.036.05.057.90.317.112.03.96.10.112.50.70.10.15.0
0891,798100.033.35.161.30.319.712.34.25.70.113.80.5(4)(4)4.6
096493100.039.23.856.10.313.811.23.34.50.116.90.6(4)(4)5.4
096717100.034.64.560.70.217.011.53.44.50.118.60.5(4)(4)5.0
099140100.032.09.456.61.210.613.35.25.30.213.00.60.1(4)7.1
099147100.031.78.159.90.811.913.36.44.70.214.30.40.1(4)7.9
1101503100.020.311.766.912.912.211.84.610.12.26.20.70.1(4)6.2
110954100.017.012.070.713.514.010.84.711.52.37.10.7(4)(4)6.1
1121370100.022.111.465.612.611.311.75.39.72.15.00.70.1(4)7.0
112363100.021.411.267.312.112.211.06.610.12.04.90.70.1(4)7.7
1161574100.012.710.576.017.64.15.23.531.70.81.90.2(4)(4)10.9
116635100.010.410.479.112.04.34.84.140.60.71.90.2(4)(4)10.5
121257100.022.326.450.50.29.413.43.86.2(4)7.70.60.10.18.9
121885100.020.526.652.80.210.113.74.45.8(4)8.00.60.1(4)10.0
1221,153100.025.726.946.50.37.913.13.65.2(4)5.80.70.2(4)9.6
122757100.024.427.548.00.27.813.04.14.5(4)5.30.60.1(4)12.3
123$314100.010.923.964.30.613.815.54.210.10.210.80.2(4)(4)8.8
123430100.08.623.767.50.315.615.54.69.90.112.20.2(4)(4)9.1
12449100.022.915.460.76.07.312.16.97.30.44.70.3(4)(4)15.7
124274100.019.117.063.91.27.710.87.66.80.15.00.2(4)(4)24.7
125138100.020.99.369.011.56.211.29.08.20.73.00.2(4)(4)18.9
125253100.019.88.371.82.04.98.510.56.50.11.80.1(4)(4)37.3
1272,086100.036.910.951.10.29.514.34.35.20.19.20.60.1(4)7.5
1272,243100.032.912.654.30.210.514.85.05.2(4)10.30.5(4)(4)7.7
128132100.054.61.343.50.211.313.65.15.7(4)1.71.1(4)(4)4.6
128145100.051.61.546.90.213.414.36.16.0(4)2.21.0(4)(4)3.8
130399100.042.64.950.62.410.711.77.66.60.53.51.50.1(4)5.8
130294100.044.13.751.81.112.012.610.35.80.22.81.30.1(4)5.6
132772100.034.711.951.90.98.613.45.35.90.16.20.80.10.110.6
132168100.031.015.453.50.78.214.86.05.00.16.20.50.1(4)11.8
134343100.043.77.348.00.77.913.96.74.40.13.71.20.20.19.2
134134100.042.08.449.20.58.214.78.54.10.13.30.80.1(4)9.1
138680100.030.915.952.21.16.813.24.68.20.14.80.50.10.112.7
138726100.028.818.552.50.47.714.65.45.90.15.40.4(4)(4)12.6
140833100.031.818.848.40.46.414.75.04.20.14.80.40.1(4)12.2
1401,006100.027.820.951.20.27.116.15.54.2(4)5.40.3(4)(4)12.4
141$194100.041.58.948.60.35.313.66.84.70.12.80.90.1(4)14.0
141253100.037.310.152.50.25.814.39.44.4(4)2.90.80.1(4)14.4
143240100.028.118.052.60.36.815.66.74.80.14.80.50.1(4)13.0
143185100.025.518.955.60.26.517.58.14.2(4)4.80.3(4)(4)13.9
14481100.030.212.555.60.510.414.44.75.80.19.10.40.10.110.0
144216100.0028.114.557.30.311.514.95.75.50.19.70.4(4)(4)9.2
1481899100.026.88.064.29.418.111.73.49.21.95.10.3(4)(4)4.9
1481,567100.023.48.567.89.820.811.23.69.91.95.80.3(4)(4)4.5
1541416100.024.710.264.07.417.013.03.98.41.46.30.4(4)(4)6.1
154714100.019.011.868.97.820.312.33.89.41.57.60.3(4)(4)6.0
157190100.041.12.456.013.810.410.64.17.22.72.10.4(4)(4)4.8
157145100.035.42.658.112.011.511.14.86.62.32.30.4(4)(4)7.1
1611203100.039.32.058.421.17.68.23.07.34.42.70.2(4)(4)3.8
161215100.033.12.264.724.38.97.93.08.75.02.90.2(4)(4)3.8
172347100.042.53.252.43.515.311.25.36.80.73.70.4(4)(4)5.6
172215100.043.52.653.52.716.211.77.65.70.43.60.3(4)(4)5.3
174465100.035.77.755.01.611.717.05.36.10.23.90.5(4)(4)8.7
174604100.033.57.658.31.613.417.35.95.80.13.80.4(4)(4)10.0
180195100.042.73.451.51.214.812.17.16.80.23.80.50.1(4)4.9
180237100.042.42.754.60.717.412.78.86.50.13.00.4(4)(4)4.8
182$980100.045.22.851.01.611.813.68.65.00.22.60.60.1(4)6.9
182870100.041.63.255.01.514.714.29.44.80.22.70.5(4)(4)7.0
183319100.041.63.353.92.112.313.99.94.70.32.50.5(4)(4)7.7
183103100.041.02.955.81.914.113.812.64.00.21.20.3(4)(4)7.7
188212100.038.34.355.34.413.513.06.06.60.83.50.50.1(4)6.8
188166100.037.33.758.33.016.413.77.16.10.43.10.3(4)(4)8.1
1971457100.031.25.862.510.715.611.34.87.92.54.80.3(4)(4)4.6
197537100.027.56.166.311.817.610.95.18.72.65.20.3(4)(4)4.1
207186100.039.63.855.41.914.414.19.25.30.42.90.4(4)(4)6.9
207170100.037.43.858.81.116.615.011.54.60.13.00.3(4)(4)6.6
20911,158100.033.81.564.118.08.16.92.416.32.02.14.60.3(4)3.6
2091,754100.028.61.669.617.78.36.32.422.92.02.24.40.2(4)3.2
2101827100.039.62.757.010.99.08.64.310.22.03.43.80.2(4)4.5
2101,065100.036.12.960.711.99.98.55.111.22.13.63.60.1(4)4.6
236292100.051.62.542.73.07.88.14.56.60.63.24.10.4(4)4.2
236204100.054.72.541.91.37.58.46.05.50.23.44.30.6(4)4.6
239188100.054.31.143.40.99.59.08.34.40.22.72.70.2(4)5.5
239259100.051.31.147.40.510.99.211.14.60.13.12.80.1(4)5.0
243626100.055.01.242.70.96.67.88.84.00.21.66.80.30.15.6
243490100.051.61.247.10.67.38.112.64.40.11.66.90.3(4)5.2
253$132100.055.51.640.92.36.38.06.35.40.52.24.00.4(4)5.4
253102100.055.51.542.52.16.48.37.75.20.52.23.90.4(4)5.8
2571110100.040.91.257.619.25.412.04.06.83.91.80.4(4)(4)4.1
257161100.036.31.462.222.16.510.94.28.54.41.80.3(4)(4)3.3
277191100.049.91.247.40.818.410.23.16.90.11.62.10.1(4)4.2
277236100.047.01.251.50.622.111.23.86.10.11.81.8(4)(4)4.0
294615100.049.63.745.50.69.816.04.74.40.12.71.40.1(4)5.7
294418100.046.54.348.80.411.617.55.14.60.12.81.20.1(4)5.4
296491100.046.13.449.60.512.114.44.66.60.14.11.00.1(4)6.0
296762100.043.03.553.30.514.415.25.56.30.14.40.80.1(4)5.9
3101131100.038.91.559.316.29.311.35.07.53.21.50.2(4)(4)5.2
310184100.034.51.463.917.511.210.86.48.13.41.60.2(4)(4)4.6
316357100.029.98.159.31.411.915.63.86.70.24.90.60.10.114.1
316247100.032.68.059.00.713.616.64.86.60.15.60.60.1(4)10.4
320451100.044.11.952.91.517.513.34.56.80.33.10.80.1(4)5.0
320555100.041.22.056.41.021.214.15.06.40.23.30.60.1(4)4.5
3361483100.039.21.858.615.410.111.13.98.72.91.70.3(4)(4)4.5
336661100.035.71.762.617.811.710.64.09.33.31.60.2(4)(4)3.9
395332100.044.72.351.30.99.218.26.04.60.12.80.60.1(4)8.8
395272100.040.22.555.60.910.618.96.54.60.13.00.5(4)(4)10.4
403$329100.039.62.456.61.316.616.84.85.20.23.10.6(4)(4)7.9
403330100.035.23.161.11.419.516.56.05.10.33.40.6(4)(4)8.5
41076100.040.40.558.50.633.110.44.64.10.10.70.20.1(4)4.6
410237100.034.40.764.71.039.69.05.35.10.10.80.2(4)(4)3.5
416319100.032.16.359.80.520.614.63.67.60.15.70.70.1(4)6.3
416560100.030.86.162.80.424.014.94.37.00.16.20.6(4)(4)5.4
429235100.060.62.434.70.36.59.24.64.00.11.81.20.50.16.3
429192100.063.22.732.40.35.58.85.92.9(4)1.51.00.60.15.9
430481100.075.32.021.10.34.45.82.21.20.20.60.61.2(4)4.5
430730100.075.52.521.80.44.65.32.51.00.20.60.71.5(4)4.9
4421185100.028.15.864.414.112.39.63.011.22.02.91.40.1(4)7.8
442334100.024.65.769.415.113.49.83.412.12.32.80.90.1(4)9.5
449101100.040.610.348.50.38.85.04.45.40.15.30.90.1(4)8.0
449130100.035.211.653.00.310.115.95.45.40.16.80.70.1(4)8.3
4682,245100.029.67.461.68.812.911.84.38.91.65.31.00.10.16.8
4681,662100.027.49.062.96.914.011.75.28.91.27.01.00.20.16.8
All other21,915100.035.75.857.07.711.711.54.77.51.44.51.10.2(4)6.7
All other17,562100.030.76.862.29.413.110.95.28.81.64.81.20.30.16.8

Indicates surgical DRG's.

Detail may not add to total because of rounding.

Data in the first row of each set of DRG numbers are for 1983; the second row shows data for 1985.

Less than 0.01 percent.

NOTE: Definitions of DRG code numbers are given in “Technical note.”

SOURCE: Health Care Financing Administration, Bureau of Data Management and Strategy: Data are from the Medicare Statistical System; data development by the Office of Research and Demonstrations.

Table 5

Number and type of discharges, average length of stay per discharge, and average charge per discharge for Medicare beneficiaries discharged from short-stay hospitals operating under the prospective payment system (PPS), by the 66 leading diagnosis-related groups (DRG's): 1985

DRG code number1Number and type of dischargesAverage length of stayAverage charge per discharge
Total-PPS2PPS outliersOutliers as percent of total PPSTotal PPSPPS outliersTotal PPSPPS outliers
TotalCostDayTotalCostDayTotalCostDay
All DRG's8,363,920172,74064,275108,4652.17.936.023.143.7$5,232$33,528$31,848$34,523
Leading DRG's5,946,275110,92043,93066,9901.97.834.522.342.54,95631,78130,16232,842
005150,8959305104201.88.232.021.644.77.14133,00528,04039,034
01229,305535854501.88.743.620.947.93,97227,64425,17728,110
014263,4756,5151,8204,6952.59.740.422.947.15,25527,27527,32327,256
015143,225605655400.45.129.417.230.92,62217,60921,47517,144
02450,6956051654401.26.132.519.737.33,57623,82228,36222,119
039164,81560556000.92.010.88.010.92,5218,1812,9078,225
07962,1603,5301,8301,7005.711.933.622.146.19,03036,21830,22042,676
08283,2452,0754901,5852.58.735.121.739.35,12225,92229,11024,936
08787,8804,6502,6452,0055.39.332.020.247.68,34340,55129,74454,807
088145,5452,3151,1451,1701.67.632.321.343.24,96134,13328,28239,859
089300,5704,7152,3152,4001.68.532.021.242.55,06629,79128,16731,358
096163,0851,4602651,1950.96.730.417.433.33,82824,29924,14124,334
09937,9303251451800.95.430.817.741.13,33027,41225,42829,010
110151,5354,4952,4252,0708.714.936.222.552.116,24447,11038,80856,835
112131,9151,8808451,0355.910.634.621.345.39,74136,71231,88140,656
116144,9608155202951.88.026.919.739.512,17831,47129,01835,793
121101,0702,3201,5457752.311.129.222.642.27,55329,01727,17032,699
122116,9755152802350.48.629.722.638.25,19425,12624,58425,772
12358,7552,0001,0001,0003.45.025.716.135.36,12632,43728,98235,891
12443,5506103352751.46.429.522.338.35,82036,42534,39538,899
12574,3057545300.13.322.119.326.23,17426,99431,02018,454
127419,1555,2652,1203,1451.37.632.120.739.84,40827,27026,80027,587
12834,410220152050.68.834.022.334.83,56420,21327,33519,692
13068,085490953950.76.832.719.036.13,41021,23826,31220,018
13238,810225951300.65.826.819.332.23,33927,25024,55329,221
13440,645250452050.65.429.014.332.22,60718,99114,15720,052
138179,0701,0652508150.65.534.319.438.93,32526,00725,80626,069
140289,3151,115751,0400.44.926.414.527.32,84215,38619,83815,065
14180,505385153700.54.929.017.029.52,64716,10828,76315,595
14369,690190151750.33.824.53.326.32,36910,8711,75911,652
14437,3307002504501.97.730.819.737.05,00527,59329,81626,359
148199,1258,4155,4252,9908.516.035.524.854.813,68242,05033,24658,023
154139,4754,6752,6801,99511.816.136.624.053.615,80946,11236,80158,620
157134,225355403151.05.835.721.137.63,48728,21030,18927,958
161162,850820208001.34.523.010.523.42,84416,51924,18116,327
17234,1908951257702.68.739.521.342.54,65725,01731,56923,953
174131,8101,1254107150.96.632.120.238.93,93127,79127,19928,130
18059,5306301105201.16.633.322.335.73,33522,90224,23722,620
182271,4652,3301502,1800.95.529.016.429.92,69817,66921,72517,390
18341,86010001000.24.325.20.025.22,09010,697010,697
18838,9804401452951.15.832.721.238.43,43829,73530,84729,188
197163,0901,9308501,0803.110.432.020.541.17,39433,40927,25138,256
20741,965225751500.56.131.022.635.13,31021,34223,83920,093
2091145,5353,4602,2851,1752.413.533.324.450.610,57229,79726,15336,883
2101104,0802,6951,4401,2552.613.840.127.254.98,50731,91028,65835,642
23635,8306401355051.89.441.923.846.83,84021,46327,21119,914
23952,590860558051.69.440.921.442.24,05420,06722,86419,876
243149,155595555400.46.836.721.538.22,78319,56723,59119,157
25330,670230202100.76.437.819.839.62,54416,99718,29016,874
257130,225245202250.87.330.217.531.44,45018,42824,78117,863
27748,400360652950.77.935.621.538.73,81321,71031,22519,613
294100,4007901955950.87.336.721.341.73,32925,38028,73724,280
296185,1352,0104001,6101.17.137.419.441.93,52623,92426,15923,368
310145.005605305751.35.128.918.829.53,32019,12521,18019,018
31636,4701,1803907903.28.733.420.139.95,58928,01431,29326,396
320122,9958901557350.77.435.823.238.53,82221,21726,27320,151
3361139,3851,2751451,1300.96.730.01.931.34,06219,90924,01919,382
39570,235530954350.85.735.317.739.23,10525,94527,27225,655
40337,2952,3155151,8006.210.639.123.843.47,03133,11330,37633,896
41090,5451,10001,1001.23.121.90.021.92,22715,365015,365
41670,5652,2601,0251,2353.210.132.120.641.86,97729,21028,23030,024
42929,385455504051.58.743.624.346.03,32717,65927,58916,433
43049,2551,705351,6703.511.644.221.444.73,68613,87525,37413,634
442134,1852,0457501,2956.09.136.921.345.98,48436,95032,41039,579
44934,6703551402151.05.629.419.036.23,16027,53829,99025,942
468122,79510,9004,4456.4558.913.439.723.351.110,61540,30730,53447,038
All Other DRG's2,417,64561,82020,34541,4752.68.238.724.845.65,91036,66335,49037,238

Indicates surgical DRG's.

Excludes non-PPS data for sole community hospitals, cancer hospitals, specialty units of short-stay hospitals (SSH's) and all participating SSH's in the four waiver States.

NOTE: Definition of DRG code numbers are given in “Technical note.”

SOURCE: Health Care Financing Administration, Bureau of Data Management and Strategy: Data are from the Medicare Statistical System; data development by the Office of Research and Demonstrations.

Selected data highlights

Area of provider, 1983-85

For short-stay hospital inpatient services rendered to Medicare beneficiaries, data presented in Table 1 provide a means of comparing changes between 1983 and 1985 in discharge and days-of-care rates, average length of stay, and average charges per enrollee and per discharge. Data are arrayed by area of provider (region, and State within division). The data, therefore, provide a basis for measuring and analyzing the impact of the Medicare PPS during the period 1983-85.

Discharge rates per 1,000 enrollees

Subsequent to the implementation of PPS, and for the first time in the history, short-stay hospital discharges declined. Therefore, between 1983 and 1985, the annual discharge rates declined 15.9 percent for all areas (390 to 328) and the United States (396 to 333). The decline in the number of discharges during 1985, however, reflects a substantial number of missing discharge records, especially for Virginia and North Carolina, that were returned to the intermediary. Therefore, the data for these States were eliminated from analysis in this article. Similarly, the national decrease in the number of discharges is probably overstated. Among the regions, discharge rates were lowest in the West, decreasing from 351 to 300 during the 1983-85 period. In contrast, the highest discharge rates were recorded for the South Region (438 in 1983 and 353 in 1985); however, the South also showed the greatest percent change, decreasing 19.4 percent during this period. Although there was no change in the rank order among the regions, the ratio of the discharge rates between regions with the highest and lowest rates decreased from 1.25 in 1983 to 1.18 in 1985. For the individual States, Hawaii's discharge rate (262) was lowest in 1983, and North Dakota's (537) was highest. Data for 1985 showed the lowest discharge rate in Hawaii (246) and the highest in the District of Columbia (444). Among the States, Nebraska had the highest decrease in the discharge rate between 1983 and 1985, 25.9 percent; Rhode Island had the lowest rate of decrease, 4.0 percent. With two exceptions—Montana (in 1983 and 1985) and Wyoming (in 1985)—all States in the Mountain and Pacific divisions were below the national discharge rate for 1983 (396) and 1985 (333). In 1983, 28 of the States (55 percent) were below the national discharge rate; in 1985, 30 States (59 percent) were below the national rate.

Days of care rates

The combination of the declining discharge rate and the accelerated decline in the average length of stay resulted in a substantial decrease in the rate for total days of care (TDOC). For all areas and the United States, TDOC rates decreased 26.2 percent during the 1983-85 period. However, TDOC rates for the United States were slightly higher (3,899 and 2,876 for 1983 and 1985, respectively) than the rates for all areas (3,837 and 2,832, respectively). The West Region recorded the lowest TDOC rates in 1983 and 1985 (2,846 and 2,154, respectively, a decrease of 24.3 percent). The Northeast Region recorded the highest (4,309 and 3,539 for 1983 and 1985, respectively, a decrease of 17.9 percent). Of all the regions, the North Central Region showed the greatest decrease in TDOC rates (31.5 percent) between 1983 and 1985. Unlike the convergence among the regions noted in the discharge rates, the ratio of TDOC rates between regions with the highest and the lowest rates widened from 1.51 in 1983 to 1.64 in 1985. This reflects the relatively lower rate of decrease in the average length of stay and the discharge rate for the Northeast Region. Among the States, Utah had the lowest TDOC rate for both 1983 (2,360) and 1985 (1,721); the District of Columbia had the highest TDOC rate for both 1983 (6,353) and 1985 (5,267). Rhode Island had the lowest percent decrease in TDOC rates (8.0 percent) for the 1983-85 period, and Kansas had the highest decrease, 45.9 percent. Every State in the Mountain and Pacific Divisions had TDOC rates below the national average. Of all the States, 28 (55 percent) were below the national TDOC rate in 1983 (3,899); the figure climbed to 32 States (63 percent) in 1985.

Average length of stay

The average length of stay (ALOS) per discharge for all areas and the United States declined from 9.8 days in 1983 to 8.6 days in 1985, a decrease of 12.2 percent. Although Medicare ALOS has continually fallen since the program began, this represented the largest 2-year decrease in the program's history. The West Region had the shortest ALOS among the regions, with 8.1 days in 1983 and 7.2 days in 1985, a decrease of 11.1 percent. The Northeast Region had the longest ALOS for 1983 (12.2 days) and 1985 (11.0 days), a decrease of 9.8 percent. The North Central Region showed the highest percent decrease in ALOS, declining 17.0 percent, from 10.0 days in 1983 to 8.3 days in 1985. Among the States, Idaho had the shortest ALOS during the 1983-85 period, declining from 7.0 days to 6.1 days, a decrease of 12.9 percent. New York's ALOS, the longest, declined from 14.0 days in 1983 to 13.1 days in 1985, a decrease of 6.4 percent. Kansas showed a significant decrease, 33.0 percent, by lowering the ALOS from 10.9 days to 7.3 days. Maine, which already had a low ALOS in 1983 (8.9 days), reduced it further in 1985 (8.8 days), a decrease of 1.1 percent. There were 34 States (67 percent) at or below the national ALOS for 1983; in 1985, there were 35 (69 percent).

Average charge per enrollee

The amount of charges for short-stay hospital inpatient services appears to have leveled off with the inception of PPS ($54.8 billion in 1983 and $53.5 billion in 1985) (Table 4). In fact, average charge per enrollee (ACPE) showed a decrease of 5.7 percent for all areas and the United States between 1983 and 1985, reflecting an increase in the number of Medicare enrollees. In all areas, ACPE decreased from $1,853 to $1,748 from 1983 through 1985; for the United States as a whole, it decreased from $1,889 to $1,781. In 1983, ACPE ranged from $1,807 in the South Region to $1,944 in the West. In 1985, the lowest and highest ACPE were reported, respectively, for the North Central Region ($1,698) and the Northeast Region ($1,940). The largest decrease in ACPE (11.1 percent) was seen in the North Central Region; conversely, ACPE in the Northeast Region remained constant during 1983-85. Data for individual States showed that Idaho had the lowest ACPE for 1983 ($1,072) and 1985 ($1,028), a decrease of 4.1 percent. In contrast, the District of Columbia had the highest in 1983 and 1985 ($4,217 and $4,250, respectively), an increase of 0.8 percent. Of all the States, 17 States (33 percent) showed increases in ACPE. The lowest percent increase in ACPE was for New Hampshire (0.2 percent); the highest was for Kentucky (10.1 percent). Decreases in ACPE ranged from 0.7 percent in Pennsylvania and Missouri to 16.3 percent in Ohio.

Average charge per discharge

There were identical increases of 12.3 percent in the average charge per discharge (ACPD) for all areas and the United States between 1983 and 1985. ACPD rose from $4,749 to $5,332 in all areas and from $4,766 to $5,352 in the United States as a whole. The increase in ACPD (as compared with the decrease in ACPE) reflects the decline in the number of Medicare discharges from 1983 through 1985. The South Region, although lowest in ACPD for 1983 ($4,124) and 1985 ($4,815), showed the largest percent increase (16.8 percent). Conversely, the West Region had the highest ACPD for 1983 ($5,540) and 1985 ($6,156), an increase of 11.1 percent. The North Central Region had the lowest increase (8.2 percent). All States showed increases in ACPD for the 1983-85 period. The lowest ACPD was recorded for Arkansas in 1983 ($3,043) and for Mississippi in 1985 ($3,328). The District of Columbia had the highest ACPD in 1983 ($8,880) and 1985 ($9,575). The lowest percent increase between 1983 and 1985 was for Ohio (1.6 percent); the highest, for Nevada (26.9 percent).

Leading diagnosis-related groups

To measure the effects of PPS on DRG assignment, the 66 leading DRG's assigned to short-stay hospital (SSH) discharges in 1985 are compared with similar data for 1983 (Table 2). Data are shown for the number and rank order of discharges, average length of stay, average charge per discharge, and corresponding percent changes. Most of the significant increases and decreases in the data are probably attributable to changes in the method of reporting principal diagnosis or surgical procedure, changes in reinforcement of coding guidelines or conventions, and changes in medical practice patterns, rather than real changes in the diagnoses or procedures (which determine the DRG). Some of the increases and decreases cannot be explained easily, if at all.

Discharges and rank order

In 1983, the number of discharges attributed to the 66 leading DRG's (7,045,395) accounted for 61 percent of all discharges (11,547,300). However, in 1985, discharges for the 66 leading DRG's (7,079,360) totaled 71 percent of all discharges (10,027,010). The number of discharges for the top 20 DRG's is shown for CY's 1983 and 1985 in Figure 1.
Figure 1

Number of Medicare discharges for the top 20 diagnosis-related groups (DRG'S): 1983 and 1985

The number of discharges in 1983 ranged from a low of 7,165 for DRG 124—circulatory disorders, excluding acute myocardial infarction, with cardiac catheterization and complex diagnosis—to a high of 457,470 for DRG 127—heart failure and shock. DRG 39—lens procedures—had the second highest number of discharges (438,680) in 1983. Of the 66 leading DRG's in 1985, the number of discharges (498,305) for DRG 127 remained the highest. DRG 140—angina pectoris—had the second highest number of discharges (348,940). DRG 39—lens procedures—rank order position 2 in 1983, dropped to position 23 in 1985. However, the largest relative change was shown for DRG 124, which increased 563 percent (from 7,165 to 47,500 discharges) during the 1983-85 period and rose in rank order from position 243 to position 49. Among the 66 leading DRG's, the lowest number of discharges in 1985 was for DRG 257—total mastectomy for malignancy, age greater than 69 and/or complications or comorbidity—however, DRG 257 increased 48 percent from 1983 (24,230 discharges) through 1985 (35,850) and climbed in rank order position from 106 to 66. For some of the more significant changes no ready explanation is available. For example, DRG 144—other circulatory system diagnoses with complications or comorbidity—increased from 15,695 (1983) discharges to 42,280 (1985), a rise of 169 percent, and ascended in rank order from 151 to 59. In addition, DRG 79—respiratory infections and inflammations, age greater than 69 and/or complications or comorbidity—showed an increase of 172 percent, going from 25,765 to 69,945 discharges during the period 1983-85 and moving up in rank order position from 99 to 36. For all DRG's assigned in both 1983 and 1985, the ALOS was 9.8 days and 8.6 days, respectively, a decrease of 12.2 percent. The ALOS for the 66 leading DRG's decreased from 9.8 to 8.5 days of care, a drop of 13.3 percent. Among the 66 leading DRG's, the shortest ALOS (2.5 days in 1983 and 2.1 days in 1985, a decrease of 16.0 percent) was recorded for DRG 39—lens procedures. DRG 146—major small and large bowel procedures, age greater than 69 and/or complications or comorbidity—accounted for the longest ALOS (18.8 days in 1983 and 16.5 days in 1985, a decrease of 12.2 percent). The ALOS for the top 20 DRG's is shown in Figure 2.
Figure 2

Average length of stay and average charge per Medicare discharge for the top 20 diagnosis-related groups (DRG's): 1985

The smallest percent decrease (0.6) in ALOS from 1983 through 1985 was shown for DRG 154—stomach, esophageal, and duodenal procedures, age greater than 69 and/or complications or comorbidity. However, there was no change for DRG 403—lymphoma and leukemia, age greater than 69 and/or complications or comorbidity. The largest relative decrease (38.9 percent) was for DRG 125—circulatory disorders except acute myocardial infarction, with cardiac catheterization without complex diagnosis. The ALOS for DRG 125 went from 5.4 days to 3.3 days during the period 1983-85. For all DRG's assigned during 1983 and 1985, the ACPD rose from $4,749 to $5,332, an increase of 12.3 percent. The increase was somewhat lower (8.5 percent) for the 66 leading DRG's, whose corresponding ACPD was $4,673 and $5,071, respectively. Of the 66 leading DRG's, the lowest ACPD ($1,918 in 1983) was for DRG 410—chemotherapy—and ($2,141 in 1985) for DRG 183—esophagitis, gastroenteritis, and miscellaneous disorders, age 18-69, without complications or comorbidity. The highest ACPD ($14,362 in 1983 and $15,907 in 1985) was for DRG 110—major reconstructive vascular procedure, without pump, age greater than 69 and/or complications or comorbidity. In 1985, nearly 61 percent of the individual DRG's had ACPD's less than those of the ACPD for the 66 leading DRG's, contrasted with 56 percent in 1983. The ACPD for the top 20 DRG's is shown in Figure 2.

Length of stay

To compare changes in the length of stay for 1983 and 1985, mean, standard deviation, coefficient of variation, and selected percentiles are shown in Table 3. Data are arrayed by the 66 leading DRG's of 1985. The standard deviation (SD) provides a statistic for measuring the dispersion of the data around the ALOS. The coefficient of variation is a statistic used to provide a measure of relative variation; that is, a measure that expresses the magnitude of the variation (SD) relative to the size of the quantity that is being measured (ALOS). In both statistics, the greater the value, the greater the dispersion of the data around the ALOS. The ALOS for Medicare beneficiaries discharged from short-stay hospitals (SSH's) declined from 9.8 days in 1983 to 8.6 days in 1985, a decrease of 12 percent. This was the largest 2-year decrease in the history of the Medicare program. For both 1983 and 1985, the shortest ALOS was for DRG 39—lens procedures (2.5 days and 2.1 days, respectively). In 1983, the longest ALOS (18.8 days) was for DRG 148—major small and large bowel procedures, age greater than 69 and/or complications or comorbidity. In 1985, the longest ALOS (16.5 and 16.4 days, respectively) was registered for both DRG 148 and DRG 154—stomach, esophageal, and duodenal procedures, age greater than 69 and/or complications or comorbidity.

Standard deviation

There was a corresponding decline (14 percent) in the standard deviation of length of stay, from 11.3 days in 1983 to 9.7 days in 1985. For individual DRG's assigned in 1983, the standard deviation ranged from 1.8 days for DRG 39—lens procedures (with an ALOS of 2.5 days)—to 18.5 days for DRG 236—fractures of hip and pelvis (with an ALOS of 16.6 days). In 1985, DRG 39 again had the lowest standard deviation (1.9 days); DRG 468—unrelated operating room procedures—had the highest (17.8 days).

Coefficient of variation

The coefficient of variation (CV) (the ratio of the standard deviation to the ALOS) for all DRG's declined from 1.15 in 1983 to 1.13 in 1985, reflecting a larger relative decrease in the standard deviation of length of stay (14 percent) than in the ALOS (12 percent) during the study period. Among the leading DRG's in 1985, the CV ranged from 0.57 days for DRG 209—major joint and limb reattachment procedures—to 1.60 days for DRG 123—circulatory disorders with acute myocardial infarction, expired.

Percentiles

Based on the length-of-stay percentiles, the decrease in the length of stay between 1983 and 1985 appears to be concentrated in the higher percentiles; that is, the longer stays. For example, the drop in length of stay from 1983 through 1985 was only about 6 percent for the 25th percentile (from 3.6 days to 3.4 days). For the 75th percentile, the decline in length of stay was 13 percent (from 12.1 to 10.5 days). For the 90th percentile, the decrease in length of stay was 16 percent (from 20.0 to 16.9 days). In 1983, the ALOS (9.8 days) was 44 percent higher than the median length of stay (6.8 days); and in 1985, the ALOS (8.6 days) was 39 percent higher than the median length of stay (6.2 days). Among the leading DRG's in 1985, the median length of stay ranged from 2.0 for DRG 39—lens procedures—to 13.3 for DRG 148—major small and large bowel procedures, age 18-69, without complications or comorbidity.

Distribution of charges

Data in Table 4 are the distribution of charges (for the leading DRG's) incurred by Medicare beneficiaries discharged from SSH's, by type of service, for calendar years 1983 and 1985. Hospital charges for accommodation services (routine room and board, and intensive or coronary care) and ancillary services (operating room, laboratory, etc.) were recorded on the billing form (HCFA 1453 for 1983 and HCFA 1450 for 1985).

Distribution of total charges

Of the total inpatient charges for services rendered to Medicare beneficiaries in participating SSH's, routine room and board accommodations declined from 36 percent in 1983 to 32 percent in 1985. On the other hand, total ancillary charges rose from 56 to 60 percent of charges for all services during the same period. The proportion of charges for intensive or coronary care increased from 7 to 8 percent.

Distribution of ancillary charges

Of the individual ancillary charges, pharmacy and laboratory charges combined accounted for over two-fifths of all ancillary charges. More than any other ancillary service, pharmacy charges increased the most from 1983 through 1985, rising from 11.3 percent to 13.0 percent. Laboratory charges remained about the same (11.6 to 11.5 percent). Among the leading DRG's, substantial changes were noted, as shown below, in the distribution of ancillary charges between 1983 and 1985. For operating room services, there was a large relative decline in charges for the following: DRG 116—permanent cardiac pacemaker implant, without acute myocardial infarction, heart failure, or shock (from 17.6 percent to 12.0 percent). DRG 124—circulatory disorders except AMI, with cardiac catheterization and complex diagnosis (from 6.0 to 1.2 percent). DRG 125—same as DRG 124, except without complex diagnosis (from 11.5 to 2.0 percent). For pharmacy services, there were large relative increases between 1983 and 1985 in charges for the following: DRG 79—respiratory infections and inflammations, age greater than 69 and/or complications or comorbidity (17.7 to 21.7 percent). DRG 96—bronchitis and asthma, age greater than 69 and/or complications or comorbidity (13.8 to 17.0 percent). DRG 277—cellulitis, age greater than 69 and/or complications or comorbidity (18.4 to 22.1 percent). DRG 320—kidney and urinary tract infections, age greater than 69 and/or complications or comorbidity (17.5 to 21.2 percent). DRG 410—chemotherapy (33.1 to 39.6 percent). For laboratory services, there was a significant increase between 1983 and 1985 in the proportion of charges for the following: DRG 449—poisoning and toxic effects of drugs, age greater than 69 and/or complications or comorbidity (5.0 to 15.9 percent). For supply services, there was a substantial increase between 1983 and 1985 in the proportion of charges for the following: DRG 116—permanent pacemaker implant, without acute myocardial infarction, heart failure, or shock (31.7 to 40.6 percent). DRG 209—major joint and limb reattachment procedures (16.3 to 22.9 percent).

Outlier discharges

The type of PPS outlier discharges and associated ALOS and ACPD, arrayed by the 66 leading DRG's, are shown in Table 5 for Medicare beneficiaries discharged from short-stay hospitals operating under PPS in 1985. Because the DRG classification system was not designed to handle uncommon cases, Congress instructed DHHS to set aside 5-6 percent of the total PPS payments to pay for the marginal cost of uncommon discharges defined as outliers. Outliers include either unusually long hospital stays (day outliers) or exceptionally high costs (cost outliers). For PPS discharges identified as outliers, Medicare will pay hospitals a reimbursement amount above the fixed DRG payment.

Number and type of discharges

Of all the SSH discharges (10.0 million) recorded in 1985, 83.4 percent (8.4 million) were from SSH's operating under PPS. The PPS discharges included 172,740 outliers, comprised of 64,275 (37 percent) cost outliers and 108,465 (63 percent) day outliers. Outlier discharges are a small proportion (2.1 percent) of all PPS discharges, but these cases accounted for 13.2 percent ($5.8 billion) of all PPS, SSH inpatient charges ($43.8 billion). Discharges for the 66 leading DRG's (5,946,275) accounted for 71 percent of all PPS discharges, 64 percent of all outlier discharges (110,920), 68 percent of all cost outliers (43,930), and 62 percent of all day outliers (66,990). As a proportion of all discharges for the leading DRG's, outliers were 1.9 percent. Among the DRG's, the one with the largest proportion of PPS outliers as a percent of discharges was DRG 154—stomach, esophageal, and duodenal procedures, age greater than 69 and/or complications or comorbidity. DRG 154 was assigned to 39,475 PPS discharges, of which 4,675 (11.8 percent) were outlier discharges; 7 percent (2,680) were cost outliers. In contrast, the smallest proportion (0.1 percent) of outlier cases (75) was registered for DRG 125—circulatory disorders except acute myocardial infarction, with cardiac catheterization, without complex diagnosis. DRG 125 had 74,305 PPS discharges. For nearly one-third of the 66 leading DRG's, nearly all of the PPS outlier cases were day outlier discharges. For DRG 183 and DRG 410—chemotherapy—all of the outlier cases were day outliers. On the other hand, the following DRG's had an unusually high proportion (about two-thirds) of cost outlier discharges: DRG 116—permanent cardiac pacemaker implant, without AMI, heart failure, or shock. DRG 121—circulatory disorders, with AMI and cardiovascular complications, discharged alive. DRG 148—major small and large bowel procedures, age greater than 69 and/or complications or comorbidity. DRG 209—major joint and limb reattachment procedures. For 1985, a day outlier was required to exceed the geometric mean length of stay for the DRG the lesser of 17 days, or 1.94 standard deviations. The ALOS for all PPS day outliers was 43.7 days, or about 5.5 times greater than the ALOS (7.9 days) for all PPS discharges. Among the 66 leading DRG's, the highest ALOS (54.9 days) for day outliers was shown for DRG 210—hip and femur procedures except major joint, age greater than 69 and/or complications or comorbidity. A similar ALOS (54.8 days) for day outliers was recorded for DRG 148—major small and large bowel procedures, age greater than 69 and/or complications and comorbidity. In contrast, the ALOS for all PPS discharges for DRG 39—lens procedures—was only 2.0 days; the ALOS for the 600 day outlier discharges (0.9 percent of all PPS discharges) was 10.9 days. To qualify as a cost outlier during 1985, the discharge must have failed the criteria for length of stay, and the covered charges (adjusted to cost) were required to exceed the greater of $13,500, or twice the Federal rate for the DRG. The ACPD for all PPS cost outliers ($31,848) was 6.1 times greater than the APCD for all PPS discharges. For cost outliers among the 66 leading DRG's, the highest ACPD ($38,808) was incurred for DRG 110—major reconstructive vascular procedures, without pump, age greater than 69, and/or complications or comorbidity. The second highest ($36,801) was for DRG 154—stomach, esophageal, and duodenal procedures, age greater than 69 and/or complications or comorbidity. For both of these DRG's, slightly less than one-half of the outlier cases were cost outliers. Among the ACPD's for day outliers, the highest were noted for DRG 154 ($58,620), DRG 148 ($58,023), and DRG 110 ($56,835). The ALOS and ACPD for all PPS discharges were 7.9 days and $5,232, respectively; for all outliers, 36.0 days and $33,528; for all cost outliers, 23.1 days and $31,848; and for all day outliers, 43.7 days and $34,523. The largest ACPD was shown for DRG 110 for total PPS ($16,244), total PPS outliers ($47,110), and total PPS cost outliers ($38,808). DRG 110 is a major reconstructive vascular procedure, without pump, age greater than 69 and/or complications or comorbidity. DRG 110 was third highest in ACPD for day outliers ($56,835). However, DRG 110 ranked eighth in the number of discharges for total PPS outliers (4,495) and third in the ALOS for total PPS (14.9 days). Only two other DRG's had a larger proportion of outliers as a percent of the total PPS discharges than did DRG 110 (8.7 percent).

Sources and limitations of data

The data shown in this article were derived from the Health Care Financing Administration (HCFA) short-stay hospital inpatient stay record file. This file is generated by linking information from three HCFA master program files. Thus, the statistical stay record provides information on the patient, the hospital, and the hospitalization. The DRG code is assigned by GROUPER software, maintained by HCFA, and implemented by the fiscal intermediaries, based on variables contained on the discharge bill record: the principal and secondary diagnoses; the principal and secondary procedures; complications or comorbidities; and the age, sex, and discharge status of the patient. Each individual stay record is processed through GROUPER, and the appropriate DRG code is then added to the short-stay hospital inpatient stay record. The data shown by geographic division were summarized by the location of the provider. Data for other areas (not shown separately) include the Virgin Islands and all other areas outside the 50 States and the District of Columbia. Annual use and charge rates (based on the number of enrollees) were summarized by the location of the residence of the beneficiary. The hospital's charges for services rendered are entered on the hospital inpatient billing form. For the purpose of this study, charges are used rather than reimbursements because charge data are readily available and provide a better basis for measuring the relative differences in the resouces used for services rendered. Data shown in Table 5 represent discharges from hospitals participating in the Medicare prospective payment system (PPS). The PPS legislation categorically excludes specified specialty units of short-stay hospitals (e.g., psychiatric and rehabilitation units). In addition, data are excluded for SSH's exempt from participating in PPS in the waiver States—Maryland, Massachusetts, New Jersey, and New York. Sole community hospitals as well as cancer hospitals are also excluded. Three types of limitations should be considered when analyzing the data shown in this report: sampling variability, incompleteness of files due to administrative time lag, and diagnostic and DRG coding. Each of these data limitations is described below.

Sampling variability

The data presented in this article are based on short-stay hospital stay records contained in the 20-percent MEDPAR inpatient stay record file. Therefore, the data are subject to sampling variability. Sample counts were multiplied by a factor of 5 to estimate population totals.

Incompleteness of data files

The incompleteness of the MEDPAR stay record files used to prepare the report is a result of the inherent administrative time lag between the time when a bill (HCFA-1450) is submitted for payment and when it is posted to the central records. In addition, for 1985, a substantial number of discharge records for Virginia and North Carolina were missing from the MEDPAR file used to prepare this article. The processing cut-off dates for the data in this article were December 1984 for 1983 data and December 1986 for 1985 data. Therefore, discharges recorded after those dates were not included. A complete count of Medicare discharges from short-stay hospitals in 1983 and 1985 will probably total about 3 percent and 5 percent more, respectively, than the total figures used in this study.

Diagnostic and diagnosis-related group coding

This limitation is associated with coding the principal and secondary diagnoses, surgical procedures, and the eventual assignment of the DRG code. The diagnostic information used to generate the DRG codes was classified according to the International Classification of Diseases, Ninth Revision, Clinical Modification (ICD-9-CM). For each sample bill record, a unique three-, four-, or five-digit code was assigned for the principal and secondary diagnoses. Similarly, a unique two-, three-, or four-digit code was assigned for each surgical procedure. DRG assignment errors, essentially, result from errors in selecting and coding the diagnoses and procedures; precision and understanding of the DRG definitions; and comprehending and adhering to HCFA coding guidelines and regulations. Based on a report in the New England Journal of Medicine concerning the accuracy of diagnostic coding, an error rate of 20.8 percent in DRG coding was reported for the period October 1984 through March 1985. Errors were distributed equally between physicians and hospitals. Small hospitals had significantly higher error rates. Previous studies had found that errors occurred randomly, so that one-half the errors benefited the hospital financially and one-half penalized the hospital. The present study found that a statistically significant 61.7 percent of coding errors favored the hospital. The study concluded that “creep” does occur in the coding of DRG's, resulting in overpayment to hospitals for patients covered by Medicare (Hsia et al., 1988). As a result of this study and other related studies, the data in this article should be used with caution.

Technical note

The following are definitions of the leading diagnosis-related groups (DRG's) within the major diagnostic classifications (MDC's): Surgical DRG code.
MDC 1Diseases and disorders of the nervous system (DRG's 1-35)
0051Extracranial vascular procedures
012Degenerative nervous system disorders
014Specific cerebrovascular disorders except transient ischemic attack
015Transient ischemic attacks
024Seizure and headache, age greater than 69 and/or complication or comorbidity
MDC 2Diseases and disorders of the eye (DRG's 36-48)
0391Lens procedures
MDC 4Diseases and disorders of the respiratory system (DRG's 75-102)
079Respiratory infections and inflammations, age greater than 69 and/or complication or comorbidity
082Respiratory neoplasms
087Pulmonary edema and respiratory failure
088Chronic obstructive pulmonary disease
089Simple pneumonia and pleurisy, age greater than 69 and/or complication or comorbidity
096Bronchitis and asthma, age greater than 69 and/or complication or comorbidity
099Respiratory signs and symptoms, age greater than 69 and/or complication or comorbidity
MDC 5Diseases and disorders of the circulatory system (DRG's 103-145)
1101Major reconstructive vascular procedures, without pump, age greater than 69 and/or complication or comorbidity
1121Vascular procedures except major reconstruction
1161Permanent cardiac pacemaker implant, without acute myocardial infarction or congestive heart failure
121Combined with 122
122Circulatory disorders, with acute myocardial infarction, with or without cardiovascular complications discharged alive
121Circulatory disorders, with acute myocardial infarction and cardiovascular complications, discharged alive (Federal Register, September 1, 1983)
122Circulatory disorders, with acute myocardial infarction, without cardiovascular complications, discharged alive (Federal Register, September 1, 1983)
123Circulatory disorders, with acute myocardial infarction, expired
124Circulatory disorders except acute myocardial infarction, with cardiac catheterization and complex diagnosis
125Circulatory disorders except acute myocardial infarction, with cardiac catheterization, without complex diagnosis
127Heart failure and shock
128Deep vein thrombophlebitis
130Peripheral vascular disorders, age greater than 69 and/or complication or comorbidity
132Atherosclerosis, age greater than 69 and/or complication or comorbidity
134Hypertension
138Cardiac arrhythmia and conduction disorders, age greater than 69 and/or complication or comorbidity
140Angina pectoris
141Syncope and collapse age, greater than 69 and/or complication or comorbidity
143Chest pain
144Other circulatory diagnoses, with complication and/or comorbidity
MDC 6Diseases and disorders of the digestive system (DRG's 146-190)
1481Major small and large bowel procedures, age greater than 69 and/or complication or comorbidity
1541Stomach, esophageal, and duodenal procedures, age greater than 69 and/or complication or comorbidity
1571Anal procedures, age greater than 69 and/or complication or comorbidity
1611Inguinal and femoral hernia procedures, age greater than 69 and/or complication or comorbidity
172Digestive malignancy, age greater than 69 and/or complication or comorbidity
174Gastrointestinal hemorrhage, age greater than 69 and/or complication or comorbidity
180Gastrointestinal obstruction, age greater than 69 and/or complication or comorbidity
182Esophagitis, gastroenteritis, and miscellaneous digestive disease, age greater than 69 and/or complication or comorbidity
183Esophagitis, gastroenteritis, and miscellaneous digestive disease, age 18-69 without complication or comorbidity
188Other digestive system diagnoses, age greater than 69 and/or complication or comorbidity
MDC 7Diseases and disorders of the hepatobiliary system and pancreas (DRG's 191-208)
1971Total cholecystectomy, with and without common bile duct exploration, age greater than 69 and/or complication or comorbidity
1971Total cholecystectomy, without common bile duct exploration age greater than 69 and/or complication or comorbidity (Federal Register, September 1, 1983)
207Disorders of the biliary tract, age greater than 69 and/or complication or comorbidity
MDC 8Diseases and disorders of the musculoskeletal system and connective tissue (DRG's 209-256, 471)
2091Major joint and limb reattachment procedures
2101Hip and femur procedures except major joint, age greater than 69 and/or complication or comorbidity
236Fractures of hip and pelvis
239Pathological fractures and musculoskeletal and connective tissue malignancy
243Medical back problems
253Fractures, sprains, strains, and dislocation of upper arm, lower leg except foot, age greater than 69 and/or complication or comorbidity
MDC 9Diseases and disorders of the skin, subcutaneous tissue and breast (DRG's 257-284)
2571Total mastectomy for malignancy, age greater than 69 and/or complication or comorbidity
277Cellulitis, age greater than 69 and/or complication or comorbidity
MDC 10Endocrine, nutritional, and metabolic diseases and disorders (DRG's 285-301)
294Diabetes, age greater than 35
296Nutritional and miscellaneous metabolic disorders, age greater than 69 and/or complication or comorbidity
MDC 11Diseases and disorders of the kidney and urinary tract (DRG's 302-333)
3101Transurethral procedures, age greater than 69 and/or complication or comorbidity
316Renal failure without dialysis
316Renal failure (Federal Register, August 31, 1984)
320Kidney and urinary tract infections, age greater than 69 and/or complication or comorbidity
MDC 12Diseases and disorders of the male reproductive system (DRG's 334-352)
3361Transurethral prostatectomy, age greater than 69 and/or complication or comorbidity
MDC 16Diseases and disorders of the blood and blood forming organs and immunological disorders (DRG's 392-399)
395Red blood cell disorders, age greater than 17
MDC 17Myeloproliferative diseases and disorders, and poorly differentiated neoplasms (DRG's 400-414, 473)
403Lymphoma or leukemia, age greater than 69 and/or complication or comorbidity
410Chemotherapy
MDC 18Infections and parasitic diseases (systemic or unspecified sites) (DRG's 415-423)
416Septecemia, age greater than 17
MDC 19Mental diseases and disorders (DRG's 424-432)
429Organic disturbances and mental retardation
430Psychoses
MDC 21Injuries, poisonings, and toxic effect of drugs (DRG's 439-455)
4421Other operating room procedures for injuries, age greater than 69 and/or complication or comorbidity
449Toxic effects of drugs, age greater than 69 and/or complication or comorbidity
Not an MDC
468Unrelated operating room procedure
469Principal diagnosis invalid as discharge diagnosis
470Ungroupable

Surgical DRG code.

  2 in total

1.  Accuracy of diagnostic coding for Medicare patients under the prospective-payment system.

Authors:  D C Hsia; W M Krushat; A B Fagan; J A Tebbutt; R P Kusserow
Journal:  N Engl J Med       Date:  1988-02-11       Impact factor: 91.245

2.  Case mix definition by diagnosis-related groups.

Authors:  R B Fetter; Y Shin; J L Freeman; R F Averill; J D Thompson
Journal:  Med Care       Date:  1980-02       Impact factor: 2.983
  2 in total
  4 in total

Review 1.  CDC's first 50 years: lessons learned and relearned.

Authors:  D Satcher
Journal:  Am J Public Health       Date:  1996-12       Impact factor: 9.308

2.  Medicare's prospective payment system: A critical appraisal.

Authors:  Robert F Coulam; Gary L Gaumer
Journal:  Health Care Financ Rev       Date:  1992-03

3.  What affects rural beneficiaries use of urban and rural hospitals?

Authors:  W Buczko
Journal:  Health Care Financ Rev       Date:  1992

4.  Characteristics and related factors of emergency department visits, readmission, and hospital transfers of inpatients under a DRG-based payment system: A nationwide cohort study.

Authors:  Pei-Fang Huang; Pei-Tseng Kung; Wen-Yu Chou; Wen-Chen Tsai
Journal:  PLoS One       Date:  2020-12-09       Impact factor: 3.240
  4 in total

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