Prospective pricing model for neonatologists and obstetricians in tertiary care centers

According to the new federal diagnosis-related group (DRG) system, hospitals are reimbursed fixed sums based on discharge diagnoses, rather than variable sums that depend on specific goods and services consumed and number of days hospitalized. The government is now exploring DRGs as a potential mechanism for reimbursing physicians. In Florida, two DRG-type reimbursement systems were developed for neonatal and obstetrical hospitalizations in tertiary care settings, as departures from the federal DRG system. Called neonatal care groups (NCGs) and obstetrical care groups (OBCGs), both classification systems predicted hospital charges in these settings more accurately than did federal DRGs. The feasibility of a prospective pricing system for neonatologists and obstetricians based on NCGs and OBCGs was investigated. The data showed that neonatologists' charges had a high correlation with hospital charges (r = .90) and that increasing levels of intensity of care as defined by the NCGs were reflected by consistent increases in reimbursement to neonatologists. If the NCG system were to be applied, neonatologists would receive compensation equivalent to that which they currently earn according to the fee-for-service system. In contrast, obstetricians' charges bore almost no relationship to hospital charges. However, modest differences in obstetrician's charges did emerge as a reflection of number of complications, which are incorporated into the OBCG categories; this suggests that a reimbursement system based on hospital OBCG categories might be applied to obstetricians.