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This approach is alien to the way physicians are taught to approach clinical problems. Furthermore, to concentrate 15,000 ICD codes and 7,000 CPT codes into 527 DRGs results in a lack of precision in accurately reflecting the severity of each case.

The DRG system is rule-based. The concepts of complexity, severity, complication or comorbid condition (CC) and case mix index are utilized. There are thousands of potential combinations for DRGs that can only be appropriately sorted by a computer. However, the critical choices must be made based upon the patient's medical record as documented by physicians.

Complexity is based upon the resources utilized in treating a case measured by the principal diagnosis or procedure, and a relative weight (RW) is pre-assigned. For example, a newborn has a relative weight of 0.1524 and a heart transplant has a relative weight of 20.2413.

Severity is measured by the secondary diagnoses (number and complexity up to 15 for a given case). The case mix index is measured by adding the relative weights of all the cases treated by a physician or a hospital divided by the total number of cases treated over a given period of time.

Each year on October 1 the relative weight for each DRG is recalculated for Medicare, based on the previous 12 months' data. This is obtained by adding the costs of treating all the cases in a given DRG in the preceding year and by dividing the number of cases in that DRG during the preceding year to obtain the average cost for the DRG translated in relative weights to the fourth digit.

Comorbidity is a condition that exists on admission and increases the length of stay one or more days in 75 percent of the cases. A complication is a condition that develops in the hospital and increases the length of stay one or more days in 75 percent of the cases.

The length of stay allowed by Medicare is based on the average length of stay for a patient with a DRG with a given severity and given comorbidities and complications during the preceding year.

Importance of understanding the DRG system

Using DRG databases, it is possible to compare resource utilization by physicians and hospitals within the constraints of the system. In addition, it is possible to determine expected mortality and morbidity rates. The large size of the Medicare database results in accurate information because of regression to the mean.

The medical record coding staff can only use physician documentation for selecting the DRG for a case. Because of poor documentation in the clinical record, many properly treated cases are coded as less complex and less severe than they actually are. This introduces a significant error in many physician and hospital profiles.

There is a disparity between the proper care actually delivered and the morbidity, mortality and resource usage expected for the reported DRG that is of lesser complexity and severity.

As a result, some physicians and hospitals that are effectively treating patients are misrepresented by the data they generate. They are considered inappropriate utilizers of resources because of low severity levels resulting in high utilization of resources and high mortality and morbidity rates.

It is important to improve the accuracy of the information submitted to the data banks so that correct decisions are made about compliance, reimbursement, pay-for-performance and managed care contracting.

Information in the Medicare data bank is a matter of public record. There are companies that refine and sell these data. With the movement toward the release of physician-specific and hospital-specific information, it is vitally important to ensure that the information is accurate.

Improving data

The data from each encounter a physician has each day with any patient (private pay, managed care, insurance, Medicaid or Medicare) are placed in the Centers for Medicare and Medicaid Services (CMS) databank in Baltimore, Md., under the uniform physician's identification number (UPIN) at billing.

The data allow comparison of clinical efficiency, severity and complexity by ICD 9 codes, CPT codes for diagnoses and procedures, length of stay, resources utilized (cost per discharge) and morbidity and mortality rates.

As the severity and complexity of a case are accurately represented, the resources to care for that case and the length of stay (LOS) are properly accounted for in each group. If documentation does not reflect the severity and complexly correctly and completely, resources used are higher than the average allowed for that case.

This makes the physician appear to be inefficient in appropriately managing a case where the actual data documented reflect that the patient is not severely ill.

This raises the contradiction that the physician is billing for a high-level evaluation and management (E/M) code (and possibly giving a high level of care) but documenting only a low level of care.

Since medical record audits are now becoming more routine, it is essential that physicians become aware of the data accumulated daily in their practices. When audits are done in the hospital or office setting the following simple questions must be answered:

* What did the physician do (CPT or ICD 9 CM procedure code)?

* Why did the physician do it (ICD 9 CM code)?

* Was the service reasonable and necessary?

* Is the medical record legible?

Resolving the DRG dilemma

Physicians must learn a new language essential for documenting clinical efficiency that reflects the service actually provided the patient, and to do so they need assistance with education, educated case managers and educated coders.

In addition, a worksheet (Figure 1) is attached to each record, but not part of the medical record, and is an important tool for teaching each specialty group.

Based upon limited documentation the medical record coder is required to list DRG 143, atypical chest pain with an average E & M level of 1, RW of 0.5391 and a LOS of 1.7 days as the principal diagnosis.

Review of the worksheet shortly after admission--together with the orders, X-rays and lab work--suggest that the case being treated is DRG 127, heart failure and shock with an E & M level of 3, RW of 1.0037 and LOS of 4.1 days. This can then be appropriately documented in the medical record resulting in an improved E & M level, relative weight and length of stay.

In conjunction with physician executives, a concerted program of education including presentations to medical staff departments, record review and individual physician profile review is instituted.

Regular meetings with physicians, case managers and medical record personnel are held. These are combined with systematic data quality audit of medical records to reinforce the educational program. In addition, physician-specific and department-specific profiles are shared with appropriate individuals.

The importance of a physician's profile is emphasized in all meetings. In our experience, after formal presentations and individual conferences with key physicians selected by the physician executive, a few physicians grasp the significance of complete documentation for an accurate representation of their clinical management.

This number increases with time and a core of knowledgeable members of the medical staff is developed who can work with the hospital's medical executives to continually reinforce and expand the program.

DRG worksheets contain information about possible DRGs to be considered if there is appropriate documentation in the record that more accurately represents the clinical condition being treated.

This enables productive collaboration between physicians and case managers. Also information about the evaluation and management level, relative weight and allowed length of stay is included. Retain the worksheets to be used in audits.

Through education of physicians, case managers and medical record personnel, together with record review and information sharing, documentation in the medical record is improved. DRG accuracy is increased and steps toward resolving the DRG dilemma can be made. The complexity and severity of the case is accurately represented so that the use of resources and length of stay are appropriate for the case as actually treated.

By C.C. Moreland, MD and David Bloom, MD, CPE, FACPE

C.C. Moreland, MD, is the founder and president of The Moreland Group, Inc., formally known as Hospital Reimbursement Systems, Inc., in Monroe, Ga.. He can be reached at 800-343-1209 or cmoreland@themorelandgroupinc.com.

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David M. Bloom, MD, CPE, FACPE, is a consultant with The Moreland Group, Inc. He can be reached at 941-377-1445 or dbloom2@earthlink.net.

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RELATED ARTICLE: IN THIS ARTICLE ...

Government agencies and insurance companies are increasingly utilizing diagnosis-related group databases to evaluate physician and hospital practices. However, the average practicing physician and physician executive has little or no knowledge of his own or his institution's profile.

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