Once in a while, even the DC cronies should let facts get in the way of the "truth" – The "truth" in Medicare payment policy has been that the DRG system (also known somewhat incorrectly as the prospective payment system – incorrectly because DRGs are assigned AFTER the patient is discharged, not at the intake) reflects the activity of hospitals and determines correctly the payment required for the services provided to patients during an inpatient stay. When patients are admitted to the hospital, it can be for elective surgeries, in which case the stay is planned, or for unexpected events. There are many instances when patients are admitted with an uncertain diagnosis (Dx in healthcare lingo), but as the examination continues, the diagnosis is established and the treatments are delivered. That diagnosis, which is the Principal Diagnosis (PDx) on the inpatient stay claim, has proven to be quite reliable when it identifies an actual condition. There are also many procedures (Px in our lingo) performed during a hospital stay, some major and some minor, and these are often the principal indicator of the underlying condition when the "diagnosis" is actually a symptom. Every hospital in the country uses software to churn all of the Dx and Px codes on the inpatient stay, once the stay is over, to come up with the assignment of a DRG….yes folks, it is as crazy as it sounds. And guess what, the DRG assigned is, wait for it, "optimized" to the highest reimbursement. As Gomer Pile would say: Surprise, surprise, surprise. It does, however, get worse. When all is said and done, and these inpatient stays are used to compare hospitals by grouping them according to the DRG, you end up with massive heterogeneity of patients that renders comparisons meaningless. And you occult the real truth.
What this means to you – let's focus on the facts. We have now performed many analyses looking at the potential misclassification of inpatient stays and these slides are a small summary of these observations. The first shows how a symptom – Chest Pain – is widely used as a DRG assignment, even when the treatments performed in the facility indicate something else is going on. For example, chest pain can be caused by excess gas buildup, which then prompts the physicians to perform a colonoscopy. Classifying that stay into a colonoscopy episode would then lead to a further assignment into a gastro-intestinal related episode, which is more likely the truth than the bland assignment into the amorphous Chest Pain symptom. The second slide shows how patients admitted with a heart attack are then classified as a CABG DRG. That's not wrong because the patient did have a bypass, but there's a difference between an elective bypass and one caused by a heart attack. Classifying all CABGs together, irrespective of whether it's elective or not, doesn't make much sense. So let's be clear. DRGs were instituted several decades ago as a mechanism to control inpatient costs (room and board and ancillary services, not professional services), not as a mechanism to measure the performance of hospitals and associated physicians in the management of a condition or the treatment of a procedure. And yet that's what many are using them for now, including CMMI as part of the BPCI. The facts are actually pretty clear and increasingly getting in the way of the "truth" held by the agents of the status quo. But they'll keep clinging to it until hospitals finally realize that they're being hurt more than helped by false truths.