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Association of the position of a hospital-acquired condition diagnosis code with changes in medicare severity
Tricia Johnson1, Jason M Kane, Richard Odwazny
1Department of Health Systems Management, Rush University Medical Center, Chicago, Illinois.
Insights
The position of hospital-acquired conditions (HACs) in patient diagnosis codes significantly impacts Medicare Severity Diagnosis-Related Group (MS-DRG) assignment and potential reimbursement changes. An HAC in the second position drastically increases the likelihood of MS-DRG alteration.
Area of Science:
- Healthcare Policy
- Medical Coding
- Health Services Research
Background:
- Centers for Medicare and Medicaid Services (CMS) policy incentivizes quality by reducing payments for hospital-acquired conditions (HACs).
- The classification and impact of HACs on Medicare Severity Diagnosis-Related Group (MS-DRG) assignment are debated due to variable hospital coding practices.
Purpose of the Study:
- To assess how HACs influence MS-DRG assignment.
- To determine if the placement of an HAC within the International Classification of Diseases, 9th Revision (ICD-9) diagnosis code list affects MS-DRG changes.
Main Methods:
- Retrospective analysis of patient data from the University HealthSystem Consortium's Clinical Data Base (October 2007-April 2008).
- Comparison of MS-DRG assignments with and without the inclusion of HAC codes in the diagnosis list.
Main Results:
- 13.8% of patients with an HAC experienced a change in MS-DRG assignment when the HAC code was excluded.
- An HAC listed in the second position, compared to third or lower, increased the odds of an MS-DRG change by 40-fold.
Conclusions:
- The position of an HAC in diagnosis codes, not merely its presence, is the primary driver of MS-DRG assignment changes.
- HACs minimally impact reimbursement unless positioned second and associated with minor patient illness severity.
Context:
Incentives to improve quality include paying less for adverse events, including the Centers for Medicare and Medicaid Services' policy to not pay additionally for events classified as hospital-acquired conditions (HACs). This policy is controversial, as variable coding practices at hospitals may lead to differences in the inclusion and position of HACs in the list of codes used for Medicare Severity Diagnosis-Related Group (MS-DRG) assignment.
Objective:
Evaluate changes in MS-DRG assignment for patients with an HAC and test the association of the position of an HAC in the list of International Classification of Diseases, 9th Revision (ICD-9) diagnosis codes with change in MS-DRG assignment.
Design And Setting:
Retrospective analysis of patients discharged from hospital members of the University HealthSystem Consortium's Clinical Data Base between October 2007 and April 2008. Comparisons were made between the MS-DRG assigned when the HAC was not included in the list of ICD-9 diagnosis codes and the MS-DRG that would have been assigned had the HAC code been included in the assignment.
Results:
Of the 7027 patients with an HAC, 13.8% changed MS-DRG assignment when the HAC was removed. An HAC in the second position versus third position or lower was associated with a 40-fold increase in the likelihood of MS-DRG change.
Conclusions:
The position of an HAC in the list of diagnosis codes, rather than the presence of an HAC, is associated with a change in MS-DRG assignment. HACs have little effect on reimbursement unless the HAC is in the second position and patients have minor severity of illness.
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